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[2025] 175 taxmann.com 276 (Hyderabad - Trib.)[06-06-2025]
INCOME TAX : Non-commencement of activities at time of filing application or at time
of passing order for grant of registration under section 12AB cannot be sole reason
for denial of registration without considering proposed activities of assessee trust
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[2025] 175 taxmann.com 276 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'DB-B'
Ujwal Foundation
v.
Commissioner of Income-tax (Exemption)*
VIJAY PAL RAO, VICE PRESIDENT
AND MANJUNATHA G. , ACCOUNTANT MEMBER
IT APPEAL NOS. 167 AND 168 (HYD.) OF 2025
[ASSESSMENT YEAR 2025-26]
JUNE 6, 2025
Section 12AB of the Income-tax Act, 1961 - Charitable or religious trust - Registration
procedure (General) - Assessment year 2025-26 - Whether non-commencement of activities at
time of filing application or at time of passing order for grant of registration under section
12AB cannot be sole reason for denial of registration without considering proposed activities
of assessee trust - Held, yes - Whether where assessee-trust claimed to have carried out
charitable activities in subsequent years, Commissioner (Exemption) was to be directed to
consider such activities carried out by assessee in subsequent years to satisfy himself about
genuineness of activities carried out for achieving objects of trust - Held, yes [Para 7] [Matter
remanded]
FACTS
■ The assessee foundation was established vide Trust Deed dated 11-12-2021. The main objects of the
assessee was to provide education, medical relief to the poor etc.
■ The assessee applied for provisional registration under section 12A which was granted vide provisional
registration certificate dated 15-1-2022.
■ Thereafter, the assessee filed application in Form 10AB seeking registration under section 12AB.
■ The Commissioner (Exemption) rejected the application on ground that no substantial charitable activities
were being carried out by the assessee trust which was in violation of the provisions of section 11 and 12A.
■ On appeal:
HELD
■ It is clear from the findings of the Commissioner (Exemption) that he has not disputed the charitable nature
of the objects of the assessee trust, but the registration was denied only on the ground that no substantial
charitable activities are being carried out by the assessee trust. It is pertinent to note that if the assessee trust
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has not started/commenced its charitable activities, then the proposed activities are to be considered for
satisfying itself by the competent authority while granting registration under section 12AB. [Para 6]
■ If the activities are yet to be commenced, then it cannot be the case of the activities are not genuine. If the
proposed activities of the assessee trust are to achieve its objects, which are accepted as charitable in nature,
then non-commencement of the activities at the time of filing the application or at the time of passing the
order for grant of registration under section 12AB cannot be a sole reason for denial of registration without
considering the proposed activities of the assessee. There is no dispute that the assessee has not carried out
any charitable activities till the application was filed and the impugned order was passed. However, the
assessee has stated that in the subsequent year, it has carried out the activities. It is further noted that the
Commissioner (Exemption) has dismissed the application summarily without even discussing anything
which is held to be non-genuineness of the activities of the assessee. Only in the case where the assessee has
already started or carried out its activities which were found to be not in line with the objects of the
assessee, then the conditions as prescribed under section 12AB can be regarded as not satisfied.
Accordingly, in the facts and circumstances of the case, when the assessee has claimed to have carried out
the charitable activities in the subsequent years which are required to be considered by the Commissioner
(Exemption) to satisfy himself about the genuineness of the activities carried out for achieving the objects
of the trust. Hence, the impugned order of the Commissioner (Exemption) is set aside and the matter is
remanded to the record of the Commissioner (Exemption) for fresh adjudication. [Para 7]
CASES REFERRED TO
Ananda Social & Educational Trust v. CIT [2020] 114 taxmann.com 693/272 Taxman 7/426 ITR 340 (SC) (para
3) and Math Gadwaghat Trust v. CIT (Exemptions) [2023] 156 taxmann.com 281/203 ITD 661 (Varanasi-Trib)
(para 3).
H. Srinivasulu, Adv. for the Appellant. Narender Kumar Naik, CIT(DR) for the Respondent.
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