For regular registration u/s 12A(1)(ac)(iii), authority must verify genuine charitable objects and legal compliance; mere association or doubts on initial activities without material do not justify rejection when objects align with s.2(15). (28 words)

ORDER 

PER RAJPAL YADAV, VP

The present two appeals are directed at the instance of the assessee against the separate orders of ld. Commissioner of Income Tax (Exemptions) [in short ‘the CIT (E)’] dated 24.03.2025 vide which registration u/s 12A(1)(ac)(iii) and approval u/s 80G(5) of the Income Tax Act, 1961 have been denied to the assessee.

2. The grievance of the assessee is that the ld. CIT (E) has erred in not granting registration u/s 12A(1)(ac)(iii) as well as approval u/s 80G of the Act to the assessee Trust.

3. The brief facts of the case are that assessee Trust came into existence on 20.07.2023. We will be referring its aims and objects in the later part of this order. It has applied for grant of provisional registration u/s 12A(1)(ac)(vi) of the Income Tax Act. This application was processed and an order in Form No. 10AC has been issued to the assessee on 21.03.2024 vide which a provisional registration was granted to the assessee from assessment year 2024-25 to assessment year 2026-27. This provisional registration was granted subject to the following conditions :

a. Any income derived from property held under trust, wholly or in part for charitable or religious purposes, shall not be applied, other than for the objects of the trust or institution.

b. The trust or institution shall not have income from profits and gains of business which is not incidental to the attainment of its objectives.

c. Separate books of account shall be maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives.

d. The trust or institution shall not apply any part of its income from the property held under a trust for private religious purposes, which does not enure for the benefit of the public.

e. The trust or institution established for charitable purpose created or established after the commencement of this Act, shall not apply any part of its income for the benefit of any particular religious community or caste.

f. No non-genuine activity shall be earned out by the trust or institution. g. No such activity shall be carried on by the trust or institution which is not in accordance with all or any of the conditions subject to which it was registered.

h. The trust or institution shall comply with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause (b) of sub- section (1) of section 12AB.

i. The form for registration in form No 1 OA has been duly filled in by providing all the information or documents and no false or incorrect information or documents have been provided.

j. The trust or institution shall apply for registration within 6 months of commencement of the, activities or at least 6 months prior to the expiry of period of provisional registration, whichever is earlier.

k. Where the trustor institution has. adopted or undertaken modifications of the objects which do not conform to the conditions of registration, the trust or institution shall make an application in the prescribed form and manner to- the Principal Commissioner or Commissioner, for registration of the trust or institution, within a period of thirty days from the date of the said adoption or modification.

Name and Designation of the Principal Commissioner Registration Granting Authority of Income Tax (Digitally signed)

4. A perusal of Scheme to grant registration, it would reveal that if a Trust or a Society came into existence after the new Scheme introduced by Finance Act, 2020 w.e.f. 01.04.2021, then such Institution would be required to obtain provisional r