Trust's Registration Denied Due to Non-Compliance with Income Tax Act

The tribunal upheld the CIT(E)'s decision to deny registration under section 12AA of the Income Tax Act to a trust due to non-compliance with section 11(1)(c) requirements for international activities and lack of evidence supporting charitable endeavors. The trust's engagement in international projects necessitated approval under section 11(1)(c), despite its claims of solely operating within India. Failure to prove the genuineness of activities and adhere to statutory provisions led to the dismissal of the appeal, emphasizing the importance of compliance and authenticity for registration under the Act.

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Issues:
The appeal concerns the denial of registration under section 12AA of the Income Tax Act by the CIT(Exemptions) due to the failure of the assessee to comply with the provisions of section 11(1)(c) and prove the genuineness of its activities.

Issue 1: Applicability of Section 11(1)(c) and Registration under Section 12AA:
The assessee, a trust registered under the Indian Trusts Act, filed for registration under section 12AA. The CIT(Exemptions) rejected the application as the assessee did not obtain necessary approval under section 11(1)(c) for conducting activities outside India. The trust argued that section 11(1)(c) was not applicable as it had not engaged in activities outside India. However, the tribunal found that the trust had indeed conducted international projects, necessitating permission under section 11(1)(c). The tribunal upheld the CIT(E)'s decision, emphasizing the importance of complying with the Act's provisions and proving the genuineness of charitable activities.

Issue 2: Compliance with Trust Deed and Activities Undertaken:
The trust deed outlined charitable objectives, including poverty reduction projects at national and international levels. Despite the trust's claims of only operating within India, evidence showed international projects such as studies in Nepal, Bangladesh, and India, as well as rehabilitation projects for Nepali women. The tribunal noted the contradiction between the preamble stating income application for Indian objectives and the trust's allowance for work in other countries. The lack of documentation to substantiate the genuineness of charitable activities further weakened the assessee's case.

Decision:
The tribunal dismissed the appeal, affirming the CIT(E)'s decision to reject the registration application under section 12AA. The failure to obtain necessary approval for international activities under section 11(1)(c) and the lack of evidence regarding the trust's charitable endeavors led to the denial of registration. The tribunal stressed the need for trusts to adhere to statutory requirements and demonstrate the authenticity of their activities to qualify for registration under the Income Tax Act.

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