SC: Performance of Charitable Activity not Compulsory for Registration of New Trust u/s 12AA of IT Act

Last updated: 07 March 2020

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Quick Summary

The Supreme Court has ruled that a newly formed trust can be registered under Section 12AA of the Income Tax Act, 1961, based on its stated charitable objects, even if no activities have been undertaken yet. The court clarified that 'activities' in this context includes 'proposed activities', meaning the Commissioner must be satisfied that the trust's objects are genuine and that the planned activities align with these objects. This differs from situations where registration is being cancelled, which requires proof of actual non-genuine activities.

Court :
Supreme Court of India

Brief :
The present appeal has been filed by the Director of Income Tax ('Appellant') against the impugned judgment passed by the Hon'ble Delhi High Court ('Delhi HC') holding that a newly registered Trust is entitled for registration under section 12AA of the Income Tax Act, 1961 ('IT Act, 1961') on the basis of its objects, without any activity having been undertaken.

Citation :
Director of Income Tax ('Appellant') against the impugned judgment passed by the Hon'ble Delhi High Court ('Delhi HC')

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