Charitable trust registration: one-time fund-raising for charitable objects was not business activity, and section 13 could not block registration.

A one-time fund-raising programme of a charitable trust, where the surplus was applied wholly to charitable objects, was not treated as organised business activity or a specified violation under section 12AB(4). Applying the dominant object and profit motive tests, the Court accepted that the activity did not lose its charitable character merely because it was organised and generated funds, and the trust remained entitled to registration. The Court also held that section 13 operates at the assessment stage and cannot be used to refuse registration while considering an application under section 12AB. No substantial question of law arose, and the Revenue's challenge failed.

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Issues: Whether the assessee trust's one-time fund-raising programme constituted business activity so as to amount to a specified violation under section 12AB(4) of the Income-tax Act, 1961, and whether the Commissioner could deny final registration by invoking section 13 of the Income-tax Act, 1961.

Analysis: The Court accepted the Tribunal's view that the fund-raising programme was a one-time activity and, on the facts found, was not an organised business activity akin to commercial trading. The surplus was applied towards the charitable objects of the trust, and the dominant object and profit motive tests, as applied in the earlier jurisdictional precedent, showed that the activity did not lose its charitable character merely because it was organised and generated funds. The Court also agreed that section 13 of the Income-tax Act, 1961 operates at the assessment stage and cannot be used to refuse registration at the stage of considering an application for registration under section 12AB.

Conclusion: The assessee trust was entitled to registration, and the Revenue's challenge failed.

Final Conclusion: No substantial question of law arose from the Tribunal's order, and the Revenue's appeal was dismissed.

Ratio Decidendi: A one-time fund-raising activity applied wholly towards charitable objects does not, by itself, constitute business activity or a specified violation for denying registration, and section 13 cannot be invoked to refuse registration at the threshold stage.

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