Section 12AA registration cannot be conditioned on State endowments registration when the statute does not authorise it.

Registration under section 12AA of the Income-tax Act must be considered strictly within that statutory framework, and the income-tax authority cannot require prior registration under the A.P. Charitable & Hindu Religious Institutions & Endowments Act, 1987 as a condition for granting income-tax registration. A condition imposed outside the scope of section 12AA was therefore unsustainable, particularly where an earlier Tribunal direction had already required registration to be granted and could not be varied by adding a fresh inconsistent qualification. The condition linked to section 43 of the State endowments law was expunged, and the assessee succeeded.

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Issues: Whether the Director of Income-tax (Exemptions) could, while granting registration under section 12AA, insist that the assessee first obtain registration from the competent authority under the A.P. Charitable & Hindu Religious Institutions & Endowments Act, 1987, and whether such a condition could survive in the face of the Tribunal's earlier direction to grant registration.

Analysis: Registration under section 12AA is governed by the Income-tax Act, 1961, and the power to grant or refuse registration has to be exercised within that statutory framework. No requirement in section 12AA authorises the income-tax authority to compel the assessee to obtain registration under the State endowments law as a precondition for income-tax registration. The condition inserted by the Director was therefore outside the scope of section 12AA and was not supported by the decision relied upon. In addition, the earlier Tribunal order had directed grant of registration, and the Director could not add a fresh condition inconsistent with that direction while giving effect to the order.

Conclusion: The condition requiring registration under section 43 of the A.P. Charitable & Hindu Religious Institutions & Endowments Act, 1987 was unjustified and was expunged; the assessee succeeded.

Ratio Decidendi: An authority granting registration under section 12AA of the Income-tax Act, 1961 cannot impose a condition not authorised by that provision, particularly where it would add a fresh qualification contrary to an earlier binding appellate direction.

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