Rithwik Foundation for Performing Arts Vs CIT (Exemptions) (ITAT Mumbai)
Assessee, a Section 8 company engaged in promoting western classical & Indian classical performing arts, applied u/s 80G(5). CIT(E) rejected the application solely on the ground that certain ancillary clauses in the memorandum—such as power to refer disputes to arbitration outside India or to enter into arrangements with authorities “otherwise”—allegedly indicated intention to utilize income outside India, which CIT(E) treated as violative of section 11.
Assessee argued that its main charitable activities are entirely in India, clause 4 specifically restricts objects to India, no expenditure was ever incurred outside India, & even incidental overseas expenses (if any) do not amount to violation of section 11. Reliance was placed on M.K. Nambyar SAARC Law Charitable Trust, Associated Chambers of Commerce & Industry, & the Mumbai Bench ruling in Dedhia Music Foundation.
Tribunal examined in detail the scheme of sections 11, 12AB & 80G. It held that existence of an enabling object that may permit incidental expenditure outside India does not constitute a “specified violation”, nor is it a valid reason to reject 80G approval. ITAT noted that CIT(E) has already granted registration u/s 12AB on the very same objects, which demonstrates satisfaction regarding genuineness of objects & activities. When 12AB registration is in force without cancellation, denial of 80G on identical facts is unjustified.
