Section 12AA registration requires scrutiny of charitable objects, and mere non-commencement of activities cannot by itself deny genuineness.

At the stage of registration under Section 12AA, the Commissioner must examine whether the trust's objects are charitable and whether any existing activities are contrary to those objects. Mere non-commencement of charitable activity, by itself, is not enough to treat the trust as not genuine or to refuse registration on that ground. Applying that scope of inquiry, refusal based solely on the absence of commenced activities was held unjustified, and the assessee's challenge succeeded.

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Issues: Whether, while considering registration of a trust under Section 12AA, the Commissioner could refuse registration solely because the trust had not yet commenced activities and was not shown to be genuine on that ground.

Analysis: The Trust was in existence, its deed was registered, and the application for registration had been made under Section 12AA. The refusal was founded on the absence of commenced charitable activity and doubts about genuineness. The decision was tested against the Supreme Court rulings on the scope of Section 12AA, which clarify that the enquiry at the registration stage is whether the trust's objects are charitable and whether the activities, if any, are shown to be contrary to those objects. Mere non-commencement of activities, by itself, does not establish lack of genuineness of the trust's activities for registration purposes.

Conclusion: The refusal of registration on the stated ground was not justified, and the substantial question of law was answered in favour of the assessee.

Final Conclusion: The order under challenge was upheld and the tax appeal did not succeed.

Ratio Decidendi: At the stage of registration under Section 12AA, the Commissioner must examine the charitable nature of the objects and whether any existing activities are contrary to those objects; absence of commenced activity, by itself, is not a sufficient ground to deny registration on the basis of lack of genuineness.

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