Trust registration turns on objects and application requirements; section 13(1)(b) issues are for assessment, not refusal of registration.

For registration under section 12AA, the enquiry is confined to the trust's objects and compliance with the prescribed application requirements; issues relating to section 13(1)(b) and denial of exemption under sections 11 and 12 arise at the assessment stage and do not control registration. On the facts, the trust had both charitable and religious objects and was treated as a composite trust, so section 13(1)(b) was not applied to refuse registration on the assumed ground of benefit to a particular community or alleged defects in donation accounting. Denial of registration was therefore not sustainable, and registration was directed to be granted.

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Issues: Whether registration under section 12AA of the Income-tax Act, 1961 could be denied on the ground that the trust was for the benefit of a particular community and that donations were not properly accounted for.

Analysis: For deciding an application for registration, the relevant enquiry is confined to the objects of the trust and the compliance of the prescribed application requirements. The applicability of section 13(1)(b) and the consequent denial of exemption under sections 11 and 12 are matters for assessment and do not govern the grant of registration. On the facts, the trust had both charitable and religious objects and was therefore a composite trust, so section 13(1)(b) was not attracted in the manner assumed by the revenue authority for refusing registration.

Conclusion: Denial of registration under section 12AA was not sustainable, and registration was directed to be granted to the assessee.

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