Trust registration cannot be denied for absence of a formal deed where creation is otherwise evidenced under income-tax rules.

Rule 17A permits trust or institution creation either under an instrument or otherwise than under an instrument, and where creation is otherwise than by deed, the evidentiary document of creation is required rather than a formal trust deed. Registration under Section 12AA cannot be refused merely because the trust was not created by written instrument or because no formal deed exists; an oral trust may also qualify if creation is evidenced. The Rajasthan Public Trust Act, 1959 does not override the income-tax registration framework on this point. The text notes that the Tribunal's non-interference was consistent with the earlier settled view, and the Revenue's challenge failed.

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Issues: Whether registration under Section 12AA could be refused on the ground that the trust was not created under an instrument and on the basis of the Rajasthan Public Trust Act, 1959.

Analysis: Rule 17A of the Income-tax Rules, 1962 recognises two modes of creation of a trust or institution, namely under an instrument and otherwise than under an instrument. Where the trust is created otherwise than under an instrument, the rule requires production of the document evidencing creation, and it does not insist on a formal deed. The Court followed the earlier view that a trust may be created even orally and that registration cannot be denied merely because no formal trust deed exists. The objection founded on the Rajasthan Public Trust Act, 1959 did not displace the position under the income-tax registration provisions, and the Tribunal's view that the matter required no interference was consistent with the settled law already applied in the earlier connected decision.

Conclusion: The refusal to interfere was upheld and the appeal failed; the issue was answered against the Revenue and in favour of the assessee.

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