TaxTMI 
TaxTMI 
2025 (2) TMI 716
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....the question of law in favour of the assessee and against the revenue. 3. The short point that falls for our consideration in the present petition is relating to the true and correct interpretation of Section 12-AA of the Income Tax Act, 1961 (for short the "Act 1961"). 4. The respondent herein assessee claims to be a charitable trust engaged in activities like education, medical aid etc. It is not in dispute that the trust has been registered under the Indian Trusts, 1882 Act. However, for the purpose of claiming exemption under Sections 10 and 11 respectively of the Act, 1961 they applied for being registered under Section 12-AA of the Act, 1961. 5. It appears that the registration was declined by the Commissioner on the ground that there was nothing on record to indicate that the Trust was undertaking any charitable activities. Being dissatisfied with the order passed by the Commissioner declining registration under Section 12-AA of the Act, 1961, the assessee went before the Appellate Tribunal, The Tribunal allowed the appeal observing as under:- "3. We have heard the parties. The brief facts of the case as appearing from the order of the Id. CIT are as under:....
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.... Court in the case of Self Employers Service Society Vs. CIT (247 ITR 118), the request/application for registration is at a premature stage and the trust should come up for registration if it had I actually done any work. Head note of the judgment read as under:- "In-the present case, admittedly, the society has not done any charitable work during the relevant period, on the other hand, the activities which they have carried on during the period were only for the purpose of generating income for its members. There were no materials before the Commissioner to be satisfied of the genuineness of the activities of the trust or institution. Under these circumstances rejection of the application cannot be termed as illegal or arbitrary." From the above facts as discussed in forgoing paragraphs, it may be observed that in absence of any genuine activity carried by the trust the activities of the trust cannot be said to be of charitable nature as of now. It may be noted that Section 12AA(1) (b) speak as under:- "(b) after satisfied himself above the objects of the trust or institution and the genuineness of its activities, hei) Shall pass an order in writing reg....
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....as under: "We have heard the rival contentions and perused the facts of the case. The trust was carried on 1.1.2008 and the application in form no. 10A was filed on 18.2.2008 for seeking registration u/s 12A(a) of the Act. As per Section. 12AA(1), there is a procedure for registration where the Commissioner on receipt of such application call for such documents or information to satisfy himself about the genuineness of the activities of the trust or may make such enquiries as he deems necessary in this behalf and after satisfying himself about the objects of the trust and genuineness of the activities, shall pass an order accordingly. In the present case on the date of registration and upto 31.3.2008, no activity has been carried out by the assessee. Therefore, it will be premature for the Id. CIT to take a decision that the activities are not of charitable in nature. Therefore, in such circumstances and facts of the case, the Id, CIT cannot comment on the genuineness of the its activities. As regards the object of the trust, the ld.. CIT has not pointed out any defect in the clauses of the trust deed. The application, therefore, appears to be in accordance with the requir....
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....t. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a trust under sub-section (3) of Section 12-AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the trust are not genuine being not in accordance with the objects of the trust. Similarly, the situation would be different where the trust has before applying for registration been found to have undertaken activities contrary to the objects of the trust." 10. The learned ASG would submit that the statement of law contained in para 12 that the terms "activities" in the provision includes "proposed activities" is prima facie not correct. According to him at the time of seeking registration under Section 12-AA, the authority must be subjectively satisfied as regards the objects and activities of the Trust. In other words, the objects and activities should be found to be genuine. 11. In such circumstances, referred to above, the learned ASG prayed that appropriate order be passed. 12. On the other hand Mr. Sanjai Pathak, the learned counsel appearing for the respondent assessee submitted that no e....