International Society of Divine Vs ITO (ITAT Agra)
The ITAT, Agra Bench held that bhandara expenses incurred by a registered charitable trust constitute valid application of income, once it is established that food was distributed to the needy.
The AO had denied application on the ground that bhandara expenses were not specifically mentioned in the trust objects and allegedly had a religious / cultural flavour. While CIT(A) (NFAC) allowed relief-to-poor expenses, it sustained disallowance of bhandara expenses citing lack of evidence that food distribution was confined to the poor.
The Tribunal rejected this approach and held that distribution of food to needy persons squarely falls within “relief of the poor” u/s 2(15). Mere suspicion that the activity had religious or cultural overtones is not sufficient to deny charitable character, especially when the fact of food distribution to the needy is not disputed. The place or manner of distribution is irrelevant once the charitable purpose is established.
Accordingly, bhandara expenses were directed to be treated as application of income for charitable purposes, and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT AGRA
1. The appeal in ITA No. 527/AGR/2025 for AY 2018-19, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 25.09.2025 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 08.03.2021 by the Assessing Officer, NeAC, Delhi (hereinafter referred to as ‘ld. AO’).
