In the month of Muharram, providing free water and feeding people with milk or Sharbat is Haraam. (Fataawa Rashidiyya part 3 pg. 113)
To feed the poor and needy and to distribute water free to quench their thirst as 'Isaale Sawaab' is no sin. Neither did Moulana Rashid Ahmad Gangohi nor anyone else say it is Haraam.
The Barelvis belief is this, that on the plains of Karbala the martyrs sacrificed their life in thirst. Therefore, the water that is given here as a drink, reaches them.
It is common sense, that this water does not reach them, nor are they in need of it. They are in Jannat. If the whole idea is to convey the reward (Isaale Sawaab), the whole year is available for that. No question arises then whether to make 'Isaale Sawaab' or not. The practice mentioned above similitudes the practices of the Rawaafidh; therefore it is Haraam.' (Fataawa Rashidiyya pg. 147/148)