Section 12AB registration requires object-based scrutiny; state-law non-registration and genuineness objections could not bar relief, with foreign contribution compliance curable.

At the registration stage under section 12AB, denial cannot rest solely on the trust's lack of registration under the Rajasthan Public Trust Act, 1959 unless that state-law compliance is material to achieving the trust's objects; that objection was rejected. The genuineness of activities must be assessed with reference to the trust's objects and proposed activities, not as a full examination of completed operations; on the materials filed, registration could not be denied on genuineness grounds. The foreign-contribution objection was treated as curable: the trust deed required clarificatory amendment so any foreign remittance would be subject to prior approval under the foreign contribution law, and the matter was restored for verification of compliance.

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Issues: (i) Whether registration under the Income-tax Act could be denied solely for want of registration under the Rajasthan Public Trust Act, 1959; (ii) whether the objection regarding possible receipt of foreign contributions required rejection of the registration application or only corrective compliance; and (iii) whether the genuineness of activities was disproved so as to justify ing registration.

Issue (i): Whether registration under the Income-tax Act could be denied solely for want of registration under the Rajasthan Public Trust Act, 1959.

Analysis: The requirement under section 12AB(1)(b)(ii)(B) of the Income-tax Act, 1961 is confined to compliance with another law only where such compliance is material for achieving the objects of the trust. The absence of registration under the Rajasthan Public Trust Act, 1959 did not, by itself, show any legal bar on carrying out the trust's objects. The provision under the state law requiring registration was treated as a separate compliance issue, not a condition precedent to income-tax registration.

Conclusion: The objection based on non-registration under the Rajasthan Public Trust Act, 1959 was rejected, and registration could not be denied on that ground.

Issue (ii): Whether the objection regarding possible receipt of foreign contributions required rejection of the registration application or only corrective compliance.

Analysis: The trust deed permitted receipt of donations, including from foreign sources, but the matter was viewed as requiring a clarificatory amendment to ensure that any foreign remittance would be accepted only after prior approval under the foreign contribution law. The defect was treated as curable, and the matter was restored for verification of the amended trust deed.

Conclusion: The issue was remitted for compliance and verification, and the assessee was directed to incorporate the necessary amendment in the trust deed.

Issue (iii): Whether the genuineness of activities was disproved so as to justify rejection of registration.

Analysis: At the stage of registration, the authority was required to examine the objects and the genuineness of the proposed activities, not to conduct an assessment of completed operations. The materials already filed by the trust, including financial details and activity-related information, were sufficient for the registration stage. The objections raised did not show that the objects were not genuine or that the activities were not in line with those objects.

Conclusion: The objection on genuineness of activities was rejected and registration could not be denied on that basis.

Final Conclusion: The appeal succeeded on the main objections relating to state-law registration and genuineness of activities, while the foreign-contribution issue was restored only for limited compliance and verification, resulting in partial relief to the assessee.

Ratio Decidendi: At the stage of registration under section 12AB, denial cannot rest on a state-law registration requirement unless that requirement is shown to be material for achieving the trust's objects, and genuineness must be judged with reference to the objects and proposed activities rather than by a full assessment of income application.

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