Section 12AB registration depends on statutory compliance and proof of genuine charitable ies; refusal was upheld on both grounds.

Registration under section 12AB requires compliance with the applicable statutory regime governing the assessee and proof of genuineness of activities. Non-registration under the Rajasthan Public Trust Act, 1959 was treated as a valid ground to refuse income-tax registration, because state-law compliance was a mandatory consideration in the exemption process. The authority also noted that the assessee failed to furnish requested records, including financial statements, vouchers, bank details, and activity particulars, so genuineness of activities could not be verified. On both grounds, rejection of the registration application was upheld.

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Issues: (i) whether non-registration under the Rajasthan Public Trust Act, 1959 could justify of registration under section 12AB of the Income-tax Act, 1961; (ii) whether failure to furnish the required details and documents justified the finding that the genuineness of the activities was not established.

Issue (i): whether non-registration under the Rajasthan Public Trust Act, 1959 could justify refusal of registration under section 12AB of the Income-tax Act, 1961.

Analysis: Section 12AB requires compliance with applicable laws governing the assessee. The record showed that the assessee was not registered under the Rajasthan Public Trust Act, 1959, and section 17 of that Act makes registration mandatory for a public trust within the prescribed time. The decision in the Supreme Court in New Noble Education Society was applied to hold that compliance with relevant state regulatory law is a legitimate and mandatory consideration while examining an application for registration under the income-tax exemption regime.

Conclusion: The refusal of registration on the ground of non-compliance with the Rajasthan Public Trust Act, 1959 was upheld, against the assessee.

Issue (ii): whether failure to furnish the required details and documents justified the finding that the genuineness of the activities was not established.

Analysis: The assessee did not furnish the material called for by the Commissioner (Exemption), including details necessary to verify the actual functioning, expenditure, bank accounts, financial statements, vouchers, and activity-wise particulars. At the stage of permanent registration, the authority is required to verify the genuineness of activities. In the absence of the relevant material, that verification could not be undertaken and the claim of genuineness remained unproved.

Conclusion: The finding that the assessee failed to establish genuineness of activities was upheld, against the assessee.

Final Conclusion: The assessee's application for registration under section 12AB was rightly rejected and the appeal failed.

Ratio Decidendi: For registration under section 12AB, compliance with applicable statutory regime and proof of genuineness of activities are mandatory prerequisites, and failure on either count can lawfully justify of registration.

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