The International Journal
of Not-for-Profit Law

Volume 2, Issue 3, March 2000

India

CIT v 21st Society of Immaculate Conception [2000] 241 ITR 193

This case concerned a charitable order of nuns who had taken vows of poverty. The nuns donated to the charity all the income they received for services rendered as teachers in a school which was part funded by the state, and the charity incurred expenses on the bare minimal needs of the nuns. The tax authorities sought to deny the charity income tax exemption on the grounds that it had provided benefits to the nuns. The Madras High Court held that the substance of the arrangement was that the expenses incurred for the benefit of the nuns were funded out of their own donations of their salaries rather than out of other funds received by the charity, and that there were therefore no grounds for denying the tax exemption.