Section 12AB registration requires prior compliance with applicable state trust law before charitable registration can be granted

Registration under section 12AB requires compliance with all applicable laws before a charitable trust can be granted permanent registration. Where the trust was not registered under the Rajasthan Public Trust Act and had not met the mandatory state-law requirement within the prescribed time, the rejection of its application was sustained. The ruling treats compliance with relevant state trust legislation as a prerequisite for consideration under the Income-tax Act, and no interference was warranted once that condition remained unsatisfied.

---

---

Issues: Whether the assessee was entitled to registration under section 12AB despite not being registered under the Rajasthan Public Trust Act and not complying with the applicable state law.

Analysis: The application for permanent registration was rejected because the assessee was not registered under the Rajasthan Public Trust Act and had not complied with the mandatory statutory requirement of registration within the prescribed time. Section 12AB(1) requires compliance with all applicable laws before registration can be granted. The Tribunal relied on the principle that charitable institutions governed by state regulatory laws must comply with those laws, and treated the state trust legislation as a relevant and mandatory condition for consideration of registration under the Income-tax Act. Since the assessee had not satisfied that requirement, the Tribunal found no basis to interfere with the rejection order.

Conclusion: The assessee was not entitled to registration under section 12AB, and the rejection of the application was upheld.

Ratio Decidendi: Compliance with applicable state law is a mandatory prerequisite for grant of registration under section 12AB to a charitable trust.

---