Public charitable Trust not required to register locally for Income Tax Act; High Court affirms.

The High Court upheld the Tribunal's decision that a public charitable Trust does not need to be mandatorily registered under the local law (MP Public Trust Act 1951) before seeking registration under Section 12AA(1) of the Income Tax Act. The Court found no statutory requirement for such registration under the Act and dismissed the appeal, affirming that compliance with the local law was not a prerequisite for registration under the Income Tax Act.

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Issues:
1. Whether a public charitable Trust needs to comply with local law of MP requiring registration under MP Public Trust Act 1951Rs.
2. Whether genuineness of the activities of the trust includes compliance with the requirement of local law namely MP Public Trust ActRs.

Analysis:
1. The appeal was filed challenging the order passed by the Income Tax Appellate Tribunal (the Tribunal) which allowed the appeal filed by the assessee Trust and set aside the order passed by the CIT(E), Bhopal. The appellant claimed that the Tribunal erred in holding that a public charitable Trust does not need to comply with the local law of MP requiring registration under MP Public Trust Act 1951.
2. The respondent Trust applied for registration under Section 12AA(1)(b)(i) of the Income Tax Act before the CIT(E), Bhopal, which was rejected on the ground that the Trust was not registered as a public Charitable Trust. The Tribunal, however, set aside this order and allowed the appeal, stating that denying registration based solely on the lack of registration as a Public Charitable Trust was not justified.
3. The appellant argued that the Trust was required to produce a copy of registration as a Public Charitable Trust during the application process under Section 12AA of the Act, but failed to do so. The Tribunal's decision was challenged on the grounds that the genuineness of the Trust's activities should include compliance with the local law, namely the M.P. Public Trust Act.
4. The High Court, after hearing the arguments, upheld the Tribunal's decision. It was noted that there is no statutory requirement under the Act for a Trust to be registered under any law before applying for registration under Section 12AA(1) of the Act. Therefore, the Tribunal's decision was found to be in accordance with the law, and no substantial question of law arose for consideration.
5. Consequently, the High Court dismissed the appeal, affirming the Tribunal's decision that there was no need for the Trust to be mandatorily registered as a Public Charitable Trust under the local law before seeking registration under Section 12AA(1) of the Act.

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