Charitable trust registration and 80G approval cannot be denied merely for nominal fee recovery when activities are genuine.

A trust does not lose eligibility for registration merely because it charges nominal fees to recover expenses, where its objects and activities are charitable and there is no material showing that the activities are not genuine. Activities falling within general public utility may satisfy the charitable purpose requirement even if they do not strictly constitute education. Approval under section 80G(5) cannot be refused where the sole basis for rejection is an unsustainable denial of registration under section 12AB; once registration is to be granted, the ancillary approval must follow from the date of application.

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Issues: (i) Whether denial of registration under section 12AB was justified on the ground that the trust's activities were not charitable or genuine. (ii) Whether denial of approval under section 80G(5) was sustainable once registration under section 12AB was directed to be granted.

Issue (i): Whether denial of registration under section 12AB was justified on the ground that the trust's activities were not charitable or genuine.

Analysis: The trust's objects and activities were examined in the context of charitable purpose. Even if the activities did not fall strictly within education, they were held to fall within the wider category of general public utility. Receipt of nominal fees to meet expenses was not treated as commercial activity. No material was found to show that the activities were not genuine.

Conclusion: Denial of registration under section 12AB was not justified and the trust was entitled to registration from the date of application.

Issue (ii): Whether denial of approval under section 80G(5) was sustainable once registration under section 12AB was directed to be granted.

Analysis: The rejection of approval under section 80G(5) was based only on the refusal of registration under section 12AB. Once the refusal of registration was set aside, the basis for denial of approval no longer survived.

Conclusion: Denial of approval under section 80G(5) was not sustainable and approval was directed to be granted from the date of application.

Final Conclusion: The assessee succeeded in both appeals, with registration under section 12AB and approval under section 80G(5) directed to be granted.

Ratio Decidendi: A trust engaged in activities for a charitable object does not lose eligibility for registration merely because it charges nominal fees to recover expenses, and denial of ancillary approval cannot survive when it rests solely on an unsustainable refusal of registration.

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