Charitable registration cannot be denied when funds are used to advance trust objects and charitable activity has begun.

Registration under section 12AB and approval under section 80G(5) could not be refused merely because the trust had not yet carried out substantial charitable activity, where the record showed limited contributions and deployment of funds for construction of Satsang Bhawan in line with its objects. The commencement of charitable activity, including Satsang, and the completion of the construction supported the genuineness of the trust's operations. On those facts, the adverse finding that the activities were not genuine was unsustainable, and the denial of registration and approval was set aside in favour of the assessee.

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Issues: Whether the rejection of the assessee's applications for registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961, on the ground that no substantial charitable activity had been carried out and the genuineness of the activities was not established, was justified.

Analysis: The applications were rejected because the trust was said not to have carried on substantial charitable activity and the genuineness of its activities was doubted. The record showed that the trust had received limited contributions and the available funds were largely utilised for construction of Satsang Bhawan, which was consistent with its charitable objects. The completion of the construction and commencement of charitable activities, including Satsang, also supported the assessee's case. On these facts, the adverse finding of the lower authority could not be sustained.

Conclusion: The rejection was not justified. The applications under section 12AB and section 80G(5) were to be accepted, and the relief was in favour of the assessee.

Final Conclusion: The denial of registration and approval was set aside and the assessee was granted the benefit sought in both appeals.

Ratio Decidendi: A trust's registration and approval cannot be denied merely because its charitable work is at an stage where the available funds have been legitimately used to further its objects and the charitable activity has commenced.

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