Income Tax Act, 1961: s.12AA – Registration under, of a newly registered Trust – Entitlement – Held: A newly registered Trust is entitled for registration under s.12AA on the basis of its objects, without any activity having been undertaken – s.12AA of the Act empowers the Principal Commissioner or the Commissioner of the Income Tax on receipt of an application for registration of a trust to call for such documents as may be necessary to satisfy himself about the genuineness of activities of the trust or institution and make inquiries in that behalf – It empowers the Commissioner to thereupon register the trust if he is satisfied about the objects of the trust or institution and genuineness of its activities – The purpose of s.12AA of the Act is to enable registration only of such trust or institution whose objects and activities are genuine – Since s.12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, the term ‘activities’ in the provision includes ‘proposed activities’ – That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust – In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of s.12AA of the Act – In that situation, 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 found to have undertaken activities contrary to the objects of the Trust.
Income Tax Act, 1961: s.12AA – Object of – Held: Is to ensure that the activities undertaken by the Trust are not contrary to its objects and that a Commissioner is entitled to refuse registration if the activities are found contrary to the objects of the Trust. Self Employers Service Society v. Commissioner of Income Tax (2001) Vol.247 ITR 18 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.