Loading judgment…
Facts
The assessee trust filed an application for registration under Section 12AB(1)(b)(ii)(B) of the Income Tax Act, 1961. The CIT(E) rejected the application and cancelled the provisional registration, citing non-registration under the Rajasthan Public Trust Act, 1959 and non-genuineness of activities.
Held
The Tribunal held that registration under the RPT Act, 1959 is not mandatory for obtaining registration under the Income Tax Act. It also found that the assessee's activities were genuine based on the evidence and the Hon'ble Apex Court's decision in the Ananda Social & Educational Trust case.
Key Issues
Whether registration under the RPT Act, 1959 is mandatory for Income Tax registration, and whether the activities of the assessee trust are genuine.
Sections Cited
12AB(1)(b)(ii)(B), 12A(1)(ac)(vi), 12AB, 12AA, 11, 12
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCH “A”, 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 27.12.2024 passed u/s. 12AB(1)(b)(ii)(B) of the Income Tax Act, 1961 (in short ‘the Act’). The assessee has raised the following grounds of appeal:
1. That the Ld. CIT(E) Jaipur, has erred in facts and in law by cancelling the application u/s. 12AB(1)(b)(ii)(B) for permanent registration and also cancelling the provisional approval under section 12A(1) (ac)(vi) of Income Tax Act, 1961.
2. That the appellant craves to add, amend, and alter the grounds before or at the time of appellate 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: 15.06.2024. 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.
3. 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 3 of the order the Ld. CIT(E), Jaipur pointed out certain deficiencies in the application/submissions of the assessee vide sub-para 7 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 the assessee 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 evidences alongwith audited financials submitted 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). We found the documents filed by the assessee to be in order and specially relying on the decision of the Hon’ble Court, which is directly on the issue under consideration. In view of this grounds raised by the assessee are allowed and the office of the Ld. CIT(E), Jaipur is directed to restore the application of the assessee with consequential issuance of the certificate u/s. 12AB(1)(b)(ii)(B) of the Act.
In the result, the appeal of the assessee is allowed with above directions.
The Order is pronounced in the open court on 29th Day of May2025.