Dilip K Raina
Quick Summary
Case in reference: M/s Ananda Social and Educational Trust (Appellant) Vs. The Commissioner of Income Tax Anr. (Respondent) with Civil Appeal No. 4702/2014; Civil Appeal No. (@SLP(C) No. 25761/2015); Civil Appeal No(s). 5437-5438/2012 dated February 19, 2020, at New Delhi. Preamble: In the budge
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FAQ :
The Supreme Court ruled that for new trusts applying for registration under Section 12AA, the Commissioner must consider 'proposed activities' as genuine if they align with the trust's charitable objects, even if no activities have yet been undertaken.
No, the Supreme Court clarified that a Commissioner cannot reject an application for first-time registration under Section 12AA simply because the trust has not yet undertaken any activities, provided the proposed activities are genuine and align with the trust's objects.
The Supreme Court stated that the term 'activities' in Section 12AA includes 'proposed activities'. This means the Commissioner should assess if the trust's objects are genuinely charitable and if the planned activities are in line with these objects.
A Commissioner would need to verify actual activities when considering cancelling an existing registration under Section 12AA(3), or if a trust has already undertaken activities contrary to its stated objects before applying for registration.
Registration under Section 12AA is mandatory for trusts and institutions to claim tax benefits under Sections 11 and 12 of the Income Tax Act 1961.
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