INCOME TAX ACT, 1961

Section 12AA

Charitable trust - Registration under section 12AA - Charitable purpose -

CIT rejected assessee's application under section 12AA and 80G(5)(vi) for the reason that the assessee trust being newly incorporated and no charitable activities were carried out so far during the time of filing the application. Held: In view of High Court decision in the case of D.P.R. Charitable Trust (2011) 61 DTR 410 (M.P.), it was concluded that carrying out of actual charitable activity cannot be a pre-condition for granting registration under section 12AA. What needs to be done on the part of the assessee is to fulfill the requirements as provided in Rule 17A and also guidelines provided in Form No. 10A/10G in the Income Tax Rules 1962 and if CIT founds that the application has been properly made and the objects of the Trust are charitable in nature as per the provisions of Income Tax Act then the assessee should not be denied the registration under section 12AA. In instant case, admittedly the application submitted by the assessee-trust under section 12AA was found to be in consonance with the procedural requirement prescribed in that regard and also the objects of the trust were found to be charitable in nature. Accordingly, CIT was directed to grant registration under section 12AA to the assessee. Further, regarding granting of approval under section 80G(5)(vi), the issue was remanded to the CIT for reconsideration after examining the facts of the case and the provisions of law.

Followed:D.P.R. Charitable Trust (2011) 61 DTR 410 (M.P.)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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