Donations to other Charitable Institutions meets Test of Application of Income for Charitable Purposes: Delhi HC upholds Decision of ITAT

The Delhi High Court affirmed the Income Tax Appellate Tribunal's decision, stating donations to other charitable institutions meet the test of income application for charitable purposes. \r

The respondent, registered under Section 12-A and benefiting from Section 80G(5)(vi), claimed exemption under Sections 11 and 12 of the Income Tax Act. They filed a revised return, allocating INR 20 crore as accumulated income utilized for donations. The dispute centered on whether such donations fell under Section 11(1)(a). \r

Justices Purushaindra Kumar Kaurav and Yashwant Varma noted that donations to charitable institutions fulfill the income application test, while Sections 11(3)(c) and (d) address situations where accumulated income isn't utilized for charity, risking exemption loss. \r

They emphasized that donations generally maintain exemption under Section 11.