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Facts
The assessee trust filed an application for registration under section 12AB of the Income Tax Act, 1961, which was rejected by the CIT(E) on grounds of non-registration under the Rajasthan Public Trust Act, 1959, and non-genuineness of activities. The assessee appealed against this order.
Held
The Tribunal held that registration under the Rajasthan Public Trust Act, 1959, is not mandatory for obtaining registration under section 12AB of the Income Tax Act. Regarding the genuineness of activities, the Tribunal found that documents submitted by the assessee were not available to the CIT(E) and thus restored the matter for re-examination.
Key Issues
Whether registration under the Rajasthan Public Trust Act, 1959, is mandatory for IT registration under Section 12AB. Whether the CIT(E) correctly assessed the genuineness of the trust's activities.
Sections Cited
12AB, 12A, 11, 12, 147, 148, 143(3)
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Income Tax Appellate Tribunal, JAIPUR BENCH “B”, JAIPUR
Before: Dr. S. SEETHALAKSHMI & SHRI GAGAN GOYAL
This appeal by the assessee is directed against the order of the Ld. CIT(E), Jaipur dated 29.12.2024 passed u/s. 12AB of the Income Tax Act, 1961 (in short ‘the Act’). The assessee has raised the following grounds of appeal:
1. On the facts and circumstances of the case and in law. Ld. CIT (Exemption) has grossly erred in rejecting the final registration application filed u/s. 12AB of the Income Tax Act, 1961. Such denial of registration is invalid in law and facts hence deserve to be quashed.
2. on the facts and circumstances of the case and in law, the Ld CIT (Exemption) has erred in rejecting the final registration due to Non-Registration under Rajasthan Public Trust Act, 1959 however, the trust is duly registered under the Rajasthan Public Trust Act, 1959. Therefore, order denying the final registration on this ground deserves to be set aside.
3. on the facts and circumstances of the case and in law, the Ld. CIT (Exemption) has further erred in rejecting the registration application on the ground of Non- Genuineness of Activities. However, the activities of the trust are completely genuine and explainable. Therefore, the denial of registration on this basis is completely irrational, illogical and against the principle of natural justice, hence deserves to be rolled back.
4. on the facts and circumstances of the case and in law, the Ld. CIT (Exemption) has further erred in cancelling the provisional registration earlier granted under section 12A of the Income Tax Act, 1961. Such cancellation being arbitrary in nature as well as unlawful hence deserves to be deleted.
5. That the appellant reserves the right to add/ alter/ modify/deleted any or all grounds at any time before the hearing.
2. The brief facts of the case are that the assessee trust filed an application in Form No. 10AB seeking registration u/s. 12AB(1)(b)(ii)(B) of the Act vide application dated: 29.06.2024. After due deliberation between the Ld. CIT(E), Jaipur and the assessee on following grounds, application of the assessee was rejected alongwith the provisional registration granted u/s. 12A (1) (ac)(vi) of the Act: i). Non-Registration with RPT Act, 1959 and Non-Genuineness of activities. ii).
The assessee being aggrieved with this order of the Ld. CIT (E), Jaipur preferred the present appeal before us. We have gone through the order of the Ld. CIT (E), Jaipur and submissions of the assessee alongwith grounds taken before us.
It is observed that as far as the first objection of the Ld. CIT(E), Jaipur is concerned, this bench of Tribunal has a consistent view that the requirement of registration under the RPT Act, 1959 is not mandatory as has been discussed in detail and held in the case of [2025] 171 taxmann.com 569 (Jaipur - Trib.) APJ Abdul Kalam Education and Welfare Trust vs. Commissioner of Income-tax, Exemption.Now, before us the assessee submitted a copy of the registration certificate issued by the office of the Assistant Commissioner-I, Devasthan Vibhag, Jaipur Division, Jaipur vide dated: 07.11.2024. In addition to the above, this bench of Tribunal has taken a consistent view that the registration under the RPT Act, 1959 is not required vide its decision in the case of [2025] 171 taxmann.com 569 (Jaipur - Trib.)APJ Abdul Kalam Education and Welfare Trust vs. Commissioner of Income-tax, Exemption, wherein it was observed as under:
The Commissioner (Exemption) is duty bound to establish that how the compliance with RPT Act, 1959 is material for the purpose of achieving its objects. Both the statutes, i.e. The Income Tax Act, 1961 and RPT Act, 1959 have to be read together. [Para 5] ■ There is no law which is required to be complied with for achieving the objects of the assessee trust. Section 17 of the Rajasthan Public Trust Act, 1959 requires that trustees of the trust have to apply for registration of a public trust, however, there is no section in the RPT Act, 1959 which prohibits a trust to carry out its objects if it is not registered under the RPT Act, 1959. It is opined that both the statutes have their own provisions and implications and none of them have overriding effect. Even if, the assessee trust is not registered with the RPT Act, 1959 and the concerned officials under the RPT Act, 1959 deems it necessary to get the entity registered under section 17 of the RPT Act, 1959, appropriate action can be taken against the trustees of the trust. But this issue can’t be a hurdle in getting registration before the Income Tax Department under section 12AB. [Para 8] ■ In view of discussion, there is no any force in the findings of the Commissioner (Exemption) while holding registration application untenable in the absence of registration under the RPT Act, 1959. [Para 9]
In view of the above pronouncement of the bench and presence of certificate of registration under the Rajasthan Public Trust Act, 1959 as mentioned (supra), this objection of the Ld. CIT(E), Jaipur is no more valid and deemed to be satisfied by the assessee for the purposes of section 12AB(1)(b)(ii)(B) of the Act.
5. Next objection of the Ld. CIT (E), Jaipur, pertains to genuineness of the Activities of the assessee trust. Vide page 8 of the order the Ld. CIT(E), Jaipur pointed out certain deficiencies in the application/submissions of the assessee vide sub-para 5 of para 3 of the order. On this issue, we have gone through the submissions and paper book of the assessee. In addition to this we further relied upon the decision of the Hon’ble Apex Court in the case of [2020] 114 taxmann.com 693 (SC) Ananda Social & Educational Trust vs. Commissioner of Income tax, wherein the Hon’ble Court held as under:
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. The said section requires the Commissioner to be so satisfied in order to ensure that the object 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. 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. [Para 9] The purpose of section 12AA is to enable registration only of such trust or institution whose objects and activities are genuine. In other words, the Commissioner is bound to satisfy himself that the object of the Trust is genuine and that its activities are in furtherance of the objects of the Trust that is equally genuine. [Para 11] Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, it is viewed that 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 section 12AA. 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 applied for registration found to have undertaken activities contrary to the objects of the Trust. [Para 12]
We have considered the evidence adduced by the assessee before us and also respectfully considered the law lay down by the Hon’ble Apex court in the case of Ananada Social and Educational Trust (supra) in the light of the observations of the Ld. CIT (E), Jaipur, we found the documents filed by the assessee were not available on the record of the Ld. CIT (E), Jaipur for verification. On this issue we relied upon the paper-book submitted by the assessee vide dated 31.03.2025, which requires re-examination by the authorities below. In view of this we restore the matter back to the file the Ld. CIT (E), Jaipur with a direction to be reheard the matter in the light of documents produce before us after giving the assessee a proper opportunity of being heard. Simultaneously the assessee is also directed to appear before the authority below and produce the relevant documents for verification of the Ld. CIT (E), Jaipur. It is further directed to the assessee to discharge its onus by explaining the deficiency pointed out by the Ld. CIT (E), Jaipur earlier in his original order
In the result, the appeal of the assessee is allowed for statistical purposes.
The Order is pronounced in the open court on the 7thDay of August 2025.