Section 12A, read with section 12AA – Mere non-carrying on of the vigorous activities of trust at the time of registration per se cannot be detrimental for registration of the trust u/s. 12A when the objects are charitable and there is no adverse comm ent about them.
FACTS
The assessee, a registered society, applied for registration u/s. 12AA.
The DIT (Exemption) mentioned that the provisions of section 12AA stipulates the following conditions for registration u/s. 12A of the Income-tax Act, 1961 :
(i) The objects of the society should be of charitable in nature;
(ii) The activities of the society should be genuine. The DIT (Exemption) noticed that life members and general members had not paid admission fee to assessee till date, the assessee had not been able to raise funds from public nor from amongst themselves and that no activities had been started yet by assessee.
The DIT (Exemption) thus observed that applicant had not done any charitable activity, and the genuineness of the activities could not be established. Therefore, one of the conditions for granting registration u/s. 12AA is also not satisfied.
Accordingly, the application filed by the applicant for grant of registration u/s. 12AA was rejected.
On appeal:
HELD
From the DIT (Exemptions)’s order, it emerges that no dispute has been raised about the charitable nature of the objectives of the trust as per the memorandum. The adverse inference has been drawn on possible intention, activities, i.e., the issues, which are not germane at the time of grant of registration of trust u/s. 12A , more so when the assessee’s objects are not held to be non-charitable.
Apropos the income and expenditure, it has been accepted by the assessee that it had created a website for the trust which also is one of the activities to promote the objects of the trust, the fact which is not denied by the DIT (Exemptions) or the Departmental representative. Therefore, the adverse inference has nothing to reflect on this aspect. Apropos time to raise the funds and donations it is the discretion of the society that can be undertaken in due course, may be the issue of section 80G registration which is consequent to section 12A registration may be important.
Thus mere non-carrying on of the vigorous activities of trust at the time of registration per se cannot be detrimental for registration of the trust u/s. 12A when the objects are charitable and there is no adverse comment about them.
Thus, the order of the DIT (Exemptions) is reversed and the assessee is held to be eligible for registration u/s. 12A.
