Income Tax Query.. Please help!!

There is an Informal group of people (within community), in which our family is also a member. We have contributed a sum (about Rs. 2 lakhs). This money is invested in Fixed Deposits (FD) or Monthly Income Scheme (MIS) in Bank and Post Office, the interest of which is utilised for awarding scholarship to deserving (poor) and meritious students in the community annually.

Problem is that since the Group is unregistered, we have to invest the money in the name of the members, mostly senior citizens as it yields higher interest. My question is that, whether this is correct? Will any query be raised from the Income Tax Department to the person in whose name the Investments are made regarding source of the money invested?? Can the explanation stated above be accepted by the ITO. Please explain with relevant IT provisions!!

Thanks in Advance!!