Charitable trust registration upheld where genuine activities and charitable objects supported eligibility under section 12AA.

A trust was found entitled to registration under section 12AA because its objects were charitable and its activities were genuine. The record showed operation of a bhawan, dharmshala, homeopathy dispensary, blood donation camps, yoga classes and similar charitable work, while nominal receipts from halls and rooms were consistent with those objects. Limited activity in earlier years was explained by lack of funds before development of assets and did not negate charitable character. Objections about a supplementary trust deed and appointment of new trustees were rejected, as such appointment was permissible under the Indian Trusts Act and registration of the supplementary deed was governed by the Registration Act. Refusal of registration was therefore unsustainable.

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Issues: Whether the assessee trust was entitled to registration under section 12AA of the Income-tax Act, 1961, on the basis that its objects were charitable and its activities were genuine.

Analysis: The stated objects of the trust included running and aiding educational, medical, religious and public utility institutions, and the material on record showed that the trust was operating a bhawan, dharmshala, homeopathy dispensary, blood donation camps, yoga classes and other charitable activities. The nominal receipts from halls and rooms were consistent with the trust objects. The objection that there had been little or no activity in earlier years was explained by paucity of funds before the assets were developed, and this did not negate the charitable character of the trust. The objections regarding the supplementary trust deed and appointment of new trustees were also rejected, as the appointment of new trustees was held to be permissible under sections 73 and 74 of the Indian Trusts Act, 1882, and registration of the supplementary trust deed was held to be governed by section 17(1)(b) of the Indian Registration Act, 1908.

Conclusion: The assessee trust satisfied the statutory requirements for registration under section 12AA and the refusal of registration was not sustainable.

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