Registration under Sections 12A and 12AB cannot be denied on Section 13(1)(b) grounds meant for exemption assessment.

Eligibility for registration of a trust under Sections 12A and 12AB is distinct from entitlement to exemption at assessment. Section 13(1)(b) cannot be used to refuse registration merely because the trust is said to benefit a particular religious community; that provision is relevant only when exemption is considered on assessment, based on material on record. The text notes that the Tribunal had directed de novo consideration and that registration should not be denied solely on this ground, and that the point was covered by binding precedent with no contrary legal basis to interfere.

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Issues: Whether, while considering registration of a trust under Sections 12A and 12AB of the Income-tax Act, 1961, the Commissioner can invoke Section 13(1)(b) of the Income-tax Act, 1961 on the ground that the trust is for the benefit of a particular religious community.

Analysis: The appeal turned on the settled position that the eligibility for registration and the entitlement to exemption operate at different stages. The provisions of Section 13(1)(b) of the Income-tax Act, 1961 govern denial of exemption at the stage of assessment, on the basis of material brought on record, and are not to be used to refuse registration under Sections 12A and 12AB. The Tribunal had restored the matter for de novo consideration and directed that registration not be denied solely on the basis of the stated ground. The Court noted that the issue stood covered by binding precedent and that no contrary legal basis existed to interfere with the Tribunal's view.

Conclusion: Section 13(1)(b) of the Income-tax Act, 1961 cannot be invoked at the stage of granting registration under Sections 12A and 12AB; it is relevant only at the stage of assessment for exemption claims. The appeal was therefore not maintainable on any substantial question of law.

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