Provisional trust registration cannot be cancelled for a curable procedural lapse that does not affect genuineness of activities.

Cancellation of provisional registration under the Income-tax Act was treated as unsustainable where the alleged non-compliance under the Maharashtra Public Trusts Act was only a procedural lapse. The omission to obtain prior sanction for temporary trustee deposits was considered a curable breach, not a substantive defect affecting the genuineness of the trust's activities or the achievement of its objects. Later approval and repayment of the amount were also relevant, and the facts did not disclose a specified violation justifying refusal of final registration. Final registration was therefore directed to be granted and consequential relief followed.

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Issues: Whether cancellation of provisional registration and refusal to grant final registration were justified on the ground of non-compliance with the sanction requirement under the Maharashtra Public Trusts Act, 1950.

Analysis: The requirement under the other law was treated as relevant only if the non-compliance was material for achieving the objects of the trust. The omission to obtain prior sanction for temporary trustee deposits was viewed as a venial and curable procedural breach, not a substantive defect going to the genuineness of activities. The later application for approval and the repayment of the amount were also considered, and it was held that the facts did not disclose a specified violation warranting cancellation of provisional registration under the Income-tax Act, 1961.

Conclusion: The cancellation of provisional registration was not sustainable and final registration was directed to be granted in favour of the assessee.

Final Conclusion: The assessee succeeded, and the impugned order was set aside with consequential relief.

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