Tribunal allows appeal, deems trust's activities charitable. Importance of genuine activities and charitable objects highlighted.

The tribunal overturned the DIT(E)'s decision to decline registration under Section 12A for the Assessment Year 2012-2013. The tribunal determined that the trust's objects were charitable, and its activities were genuine, emphasizing the importance of verifying these aspects during registration. It highlighted that if a trust deviates from its charitable objects or lacks genuine activities, appropriate actions can be taken during assessment. The tribunal concluded that the trust's clauses related to education and medical relief did not constitute conducting a business, leading to the allowance of the assessee's appeal.

---

---

Issues:
Appeal against DIT(E) order declining registration u/s.12A for Assessment Year 2012-2013.

Analysis:
The appeal was filed by the assessee against the order of DIT(E) declining registration u/s.12A of the Act for the Assessment Year 2012-2013. The DIT(E) observed that for registration under Section 12AA(l)(b), both the charitable objects of the trust and the genuineness of its activities must be satisfied. The DIT(E) noted that the trust's deed contained both charitable and non-charitable/business objects. The trustees had full discretion to apply the income of the trust towards any of its objects, including non-charitable ones. However, the trustees argued that there was no commercial element involved in the activities, and the beneficiaries were the general public without any distinction. The DIT(E) declined the registration based on the discretionary nature of income application towards non-charitable objects.

Upon careful consideration, the tribunal found that none of the trust's objects were non-charitable as highlighted by the DIT(E). The tribunal noted that the objects were charitable in nature, and the genuineness of the trust's activities was not in doubt. The tribunal emphasized that the CIT, during registration u/s.12A, must verify the charitable objects and genuine activities of the trust. If the objects are charitable and activities genuine, registration should be granted. The tribunal highlighted that during assessment, if it is found that the trust is not following its charitable objects or its activities are not genuine, the AO has the authority to tax non-charitable receipts or apply Section 13 of the Act to exclude properties held for private religious purposes. The tribunal concluded that the trust's clauses promoting education and medical relief did not amount to carrying on a business to deny registration u/s.12AA.

In light of the above analysis, the tribunal found no merit in the DIT(E)'s order declining registration u/s.12A and allowed the appeal of the assessee.

---