Indian Kanoon - Search engine for Indian Law

7. It was argued by the Ld. Counsel of the Assessee that the corpus donation have been given to the three educational trusts and which is one of the object of the assessee as per the Memorandum of Association and the other three trusts are also engaged in the providing education and they all are registered u/s 12A.The AO has not doubted the charitable objects of the assessee trust as well as the Donee Trust. There was no findings of the AO about the direct or indirect benefits being given to the persons covered u/s 13(3) and the main reason for donation was to contribute money to the another charitable organization. It was further brought to our notice about the CBDT Instruction No. 1132 dated 05.01.1978 wherein, it has been said that payment of a sum by one Charitable trust to another, for 26-Chd-2020 M/s Indo Global Education Foundation, Tehsil Kharar utilization by the Donee Trust towards its charitable Objects is proper application of income for charitable purposes in the hands of the Donor Trust and the Donor trust will not lose exemption. Further, it was also brought to our notice another Instruction No. 1582 dated 19.10.1984, where the CBDT has modified its directions that it is not necessary for Donee trust to utilize the donation in the same year. It was further argued by Ld. Counsel that there was no provision in the act about the related sister trust no adverse view has been taken by the Assessing Officer and further, registration u/s 12AA have not been withdrawn. Such donations have been accepted in the hands of the Donee for the AY 2012-13 & 2014-15.Donations was made to the some of the same trusts, as in the year under consideration and no adverse view have been taken in either of the cases by the Assessing Officer.

f) DCIT v. Divya Yog Mandir Trust in ITA No. 5612/Del/2015 order dated30.04.2019 We are of the considered view that inter-trust donation by one charitable trust to another for utilization by the Donee trust towards charitable objects is proper application of income for charitable purpose in the hands of donee trust and it will not affect the exemption claimed by the assessee u/s 11 of the Act in any manner whatsoever nor inter-trust donation can be termed as deviation from its objects as it is nowhere the case of the Department that the donee trust has not applied such sums for charitable purpose by deviating its funds, hence relief granted by Id. CIT (A) needs no interference at the ends of the Tribunal being based upon the findings of the Tribunal pertaining to AY 2009-10. (Pg 22)