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Facts
The assessee, Rare Cancer Care Foundation, applied for registration under Section 12AB and 80G. The CIT(Exemption) denied the registration on the grounds that the assessee had shown minimal receipts, incurred NIL expenses, and had not carried out any activities to prove the genuineness of its objects.
Held
The Tribunal held that registration cannot be denied solely on the ground that the trust has not yet undertaken activities, provided the objects are genuine and charitable. The CIT(E) did not doubt the genuineness of the objects, and therefore, denial of registration on the basis of lack of activities or expenses was incorrect.
Key Issues
Whether denial of registration under Section 12AB and 80G is justified solely on the grounds of non-commencement of activities or incurring expenses, when the objects of the trust are otherwise found to be genuine and charitable.
Sections Cited
12AB, 80G, 12AA, 11, 12
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Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH
सुनवाईक�तारीख/ Date of hearing: 29.07.2025 08.08.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.
These two appeals are filed by the Assessee against the order of the Ld. CIT(Exemption), Lucknow in denying registration u/s 12AB and 80G of the Act.
Ld. Counsel for the assessee, at the outset, submits that the registration u/s 12AB & 80G was denied on the ground that the assessee has shown receipts of Rs.283/- from different heads and incurred NIL expenses and no supporting documentary evidences have 1 been filed. Ld. Counsel submits that registration u/s 80G was denied on the ground that the assessee is not carrying out any charitable activities and therefore no verification of the objects with respect to the activities can be made.
Heard rival submissions. The assessee Rare Cancer Care Foundation was incorporated on 05.01.2022 u/s 8 of the Companies Act 2013 as a non-profit organization basically to promote awareness of Cancer. The assessee applied for registration u/s 12AB and 80G which was denied by the Ld. CIT(Exemption) on the ground that the assessee has not carried out any activities nor incurred any expenditure to verify the genuineness of the objects of the trust.
The Ld. CIT(Exemption) did not comment on the genuineness and charitable nature of the objects of the assessee foundation. The only ground on which the Ld. CIT(E) denied registration was that the assessee did not carry out any activities and no expenditure was incurred for charitable purposes.
The Hon’ble Supreme Court in the case of Ananda Social and Educational Trust vs. CIT (426 ITR 340) held as under:
“Section 12AA of the Income-tax Act, 1961 provides for registration of a trust. Such registration can be applied for by a trust which has been in existence for some time and also by a newly registered trust. There is no stipulation that the trust should have already been in existence and should have undertaken any activities before making the application for registration. Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. This is in order to ensure that the objects of the trust and its activities are charitable since the consequence of such registration is that the trust is entitled to claim benefits under sections 11 and 12 of the Act. In other words, if it appears that the objects of the trust and its activities are not genuine, that is to say, not charitable, the Commissioner is entitled to refuse and in fact, bound to refuse, such registration. The purpose of section 12AA of the Act is to enable registration only of such trusts or institutions whose objects and activities are genuine. In other words, the Commissioner is bound to satisfy himself that the objects of the trust are genuine and that its activities are in furtherance of the objects of the trust, that is equally genuine. Since section 12AA pertains to the registration of the trust and snot to vision includes "proposed activities". That is to say, a Commissioner is nature and whether the activities which the trust proposes to carry on are bound to consider whether the objects of the trust are genuinely charitable in 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 section 12AA 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.”
Similar view has been taken by the Hon’ble Supreme Court in the case of CIT(E) vs. International Healthcare Educational & Research Institute (SLP) (Civil Diary No.19528/2018 dated 11.02.2025).
The Hon’ble Delhi High Court in the case of DIT vs. Foundation of Ophthalmic & Optometry Research Education Center (355 ITR 361) held as under:
“Held, dismissing the appeal, that under section 12AA of the Income-tax Act, 1961, there are no restrictions of the kind which the Revenue was reading into in this case. In other words, the statute does not prohibit or enjoin the Commissioner from registering a trust solely based on its objects, without any activity, in the case of a newly registered trust. The statute does not prescribe a waiting period, for a trust to qualify itself for registration. If the Revenue's contentions were correct then, necessarily, a condition would have to be read into the provision that the Commissioner should be satisfied that the trust was deal of subjectivity. It is quite possible that if such flexibility is introduced, it in fact engaged in charitable activities which would in turn inject considerable would be susceptible to varied interpretation by the different authorities, in that some would be satisfied with the activity of few months, while others may wish to examine the activities of the organization for longer time.”
In the case on hand the Ld. CIT(E) did not doubt the genuineness and charitable nature of the objects of the trust. The registration u/s 12A as well as 80G was denied on the ground that the assessee has not incurred expenses and no activities are carried out in accordance with the objects. As held by the Hon’ble Supreme Court and various High Courts while granting registration u/s 12A one has to see whether the objects of the trust are charitable and the activities of the trust are genuine. Since the genuineness and charitable nature of the objects of the assesee Foundation were not doubted by the Ld. CIT(E), he should not have rejected the registration u/s 12A as well as 80G of the Act simply because the Foundation has not incurred expenses proving the activities in consonance with the objects of the Foundation. Thus, respectfully following the above decisions we direct the Ld. CIT(E) to grant registration u/s 12AB to the assessee Foundation.
For the same reasons, we also direct the Ld.CIT(E) to grant registration u/s 80G of the Act to the assessee Foundation.
In the result, appeals of the assessee are allowed.
Order pronounced in the open court on 08.08.2025