Political activity exclusion: registration can be refused where trust objects expressly include electoral canvassing and no contrary material exists.

Determination of tax-exempt registration requires examining the trust's objects to apply the charitable purpose test; political activity, including canvassing for a candidate, is excluded from charitable activity and may justify refusal. At the registration stage the Commissioner may form a prima facie assessment from the recorded objects; where those objects expressly include electoral canvassing and the applicant fails to produce material showing predominance of charitable activities, refusal of registration is sustainable. The appeal against rejection of registration is dismissed in favour of the revenue.

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Issues: Whether the Commissioner of Income Tax (Exemption) was justified in rejecting the applicant's registration under section 12AB of the Income-tax Act, 1961 on the ground that the trust's objects include political activity (canvassing for a candidate), and whether the rejection was sustainable in law.

Analysis: The determination for grant of registration under section 12AB requires examination of the objects of the trust to ascertain whether it is established for charitable purposes as defined by section 2(15) of the Income-tax Act, 1961. Political activity, including canvassing for a candidate in elections, falls outside the scope of charitable activity under section 2(15). At the stage of registration the Commissioner is to form a prima facie view from the trust's objects; where the objects on record expressly include political canvassing and the appellant has not placed material showing that other activities are predominantly charitable, the Commissioner is entitled to refuse registration. The Explanation to section 12AB(10) and the statutory framework for registration/cancellation inform the scope of permissible activities; absence of specific material to counter the recorded object of political activity is decisive at the registration stage.

Conclusion: The rejection of the application for registration under section 12AB is upheld and the appeal is dismissed; decision is in favour of the revenue.

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