Charitable registration evidence must be properly examined before denying section 12AA relief; dependent section 80G approval was premature.

Denial of charitable registration under section 12AA was set aside where the trust had placed activity details, photographs, bills, vouchers and evidence of charitable work, but the material was not properly examined; the matter was remanded for de novo adjudication. Registration approval under section 80G was treated as premature because it depended on the outcome of the section 12AA proceedings, so that challenge was dismissed without merits and left open to be pursued after the foundational registration issue was decided.

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Issues: (i) Whether the denial of registration under section 12AA of the Income-tax Act, 1961 was sustainable when the material placed by the trust was not properly examined. (ii) Whether the challenge to rejection of registration under section 80G of the Income-tax Act, 1961 could be entertained when the issue of registration under section 12AA was remanded for fresh consideration.

Issue (i): Whether the denial of registration under section 12AA of the Income-tax Act, 1961 was sustainable when the material placed by the trust was not properly examined.

Analysis: The material showed that the trust had produced activity details, photographs, bills and vouchers, and also pointed to charitable activities such as free medical camps and concessional treatment from the relevant financial year onward. The denial order had proceeded mainly on earlier transactions and on alleged non-verification of receipts and expenditure, but the supporting material filed by the trust was not properly considered. The return filed before the Charity Commissioner was also not doubted. In these circumstances, the examination of the application was found to be incomplete and the matter required fresh adjudication.

Conclusion: The denial of registration under section 12AA was set aside and the matter was remanded to the Commissioner for de novo adjudication; the issue was decided in favour of the assessee.

Issue (ii): Whether the challenge to rejection of registration under section 80G of the Income-tax Act, 1961 could be entertained when the issue of registration under section 12AA was remanded for fresh consideration.

Analysis: The request for approval under section 80G depended upon the outcome of the registration under section 12AA. Since the registration issue was sent back for fresh decision, the approval question did not arise for final adjudication at that stage and the fresh application route was left open after the registration question was determined.

Conclusion: The appeal relating to section 80G was held to be premature and was dismissed; this issue was decided against the assessee.

Final Conclusion: The trust obtained remand on the registration issue, while the approval issue was not examined on merits and was left to be pursued afresh after the registration proceedings.

Ratio Decidendi: Where the record suggests charitable activity but the material was not properly evaluated, denial of registration cannot stand and the matter must be reconsidered de novo; a claim dependent on such registration may be treated as premature until the foundational issue is decided.

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