Trust registration cannot be refused solely for missing dissolution clause where objects and genuineness meet section 12AA requirements.

Registration under section 12A cannot be refused merely because the trust deed omits a dissolution clause. The enquiry under section 12AA is limited to the objects of the trust and the genuineness of its activities, and a refusal must rest on adverse findings on those statutory requirements. As no such adverse finding was recorded and the rejection was based only on the absence of a dissolution clause, that ground was outside the permissible scope of enquiry. The refusal was therefore unsustainable and the trust was entitled to registration.

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Issues: Whether registration under section 12A could be refused on the ground that the trust deed did not contain a dissolution clause.

Analysis: The scope of enquiry under section 12AA is confined to satisfaction about the objects of the trust and the genuineness of its activities. The rejection order did not record any adverse finding on either of these statutory requirements and instead rested solely on the absence of a dissolution clause in the trust deed. That ground was held to be outside the permissible scope of enquiry for registration.

Conclusion: The refusal to grant registration under section 12A was unsustainable and the assessee was entitled to registration.

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