ITAT directs registration of trust under 12AA without income proof

The Appellate Tribunal ITAT Lucknow allowed the appeal, directing the Commissioner to grant registration to the trust under section 12AA of the Income Tax Act. The Tribunal emphasized that registration should be granted once the genuineness of the trust's activities is established, without requiring proof of income spent on charitable purposes. The Tribunal found that the trust had submitted all relevant documents and met the necessary criteria for registration, despite not completing its first accounting year. The order was pronounced on December 7, 2017.

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Issues: Rejection of application for registration under section 12AA of the Income Tax Act

In this case, the Appellate Tribunal ITAT Lucknow dealt with an appeal regarding the rejection of an application for registration under section 12AA of the Income Tax Act. The assessee's grievance stemmed from the rejection of their application for registration, as the Commissioner of Income-tax (Exemptions) found that no charitable activity had taken place within the trust. The Commissioner observed that the trust failed to produce necessary evidence such as books, bank statements, and vouchers to verify their claimed expenses and charitable activities. The Tribunal noted that the trust, formed in 2015, had not yet completed its first accounting year and had submitted all relevant documents, including the trust deed and details of the trust's objectives. The Tribunal referred to judicial precedents emphasizing that registration under section 12AA should be granted once the genuineness of the trust's activities is established, without requiring proof of income spent on charitable purposes. Consequently, the Tribunal directed the Commissioner to grant registration to the trust under section 12AA of the Act, as compliance with the necessary criteria had been met. The appeal of the assessee was allowed, and the order was pronounced on December 7, 2017.

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