Registration u/s 12AB granted as activities fall under general public utility, if not education as claimed

ITAT directed registration u/s 12AB as activities of the trust fall under general public utility services if not falling fall within the ambit of education.

In a recent judgment, ITAT Chennai has directed CIT(Exemption) to grant registration u/s 12AB holding that even if the activities of the trust did not fall within the ambit of education, it fall under general public utility services and mere receipt of the nominal fee to recover the expenses does not amount to commercial activity.

ABCAUS Case Law Citation:
5146 (2026) (05) abacus.in ITAT

In the instant case, the assessee had challenged the order passed by the Commissioner of Income Tax (Exemption) rejecting the application for grant of registration u/s 12A r.w.s 12AB and approval u/s.80G(5) of the Income Tax Act, 1961 (the Act).

The appellant was a Trust registered under Trust Act.  It was formed with the object of providing skill and personality training to students.  It was duly registered u/s 12A of the Act and it also got renewal of registration u/s.12A(a) of the Act. 

Subsequently, the appellant trust filed an application in Form 10AB u/s 12A(1)(ac)(ii) of the Act seeking the renewal of registration under the provisions of 12AB of the Act.

The CIT(E) came to conclusion that the activities of the trust were not in the nature of providing education placing reliance on the decision of Hon’ble Supreme Court and further observed that for the last preceding three financial years, the appellant trust had not received any voluntary contribution.  Based on these conclusions the CIT(E) inferred that the activities of the trust are not genuine, accordingly rejected the registration under the provisions of section 12Ab of the Act.

Before the Tribunal, the appellant trust submitted that it was formed primarily with the object of promoting education for the benefit of public at large and the trust was charging very nominal fees to recover cost of the services only.  The Trust had been providing skill and personality training to students in the Government School.  It was further submitted that when the dominant object is charitable, incidental income or basis activity does not limit the character of the activities.

The Tribunal observed that Commissioner had concluded that the activities of the appellant trust were not in the nature of education as it was not engaged in systematic instruction schooling and training given to young in preparation for the work of life. 

The Tribunal opined that even if the activities of the trust did not fall within the ambit of education, undoubtedly it falls under general public utility services and mere receipt of the nominal fee to recover the expenses does not amount to commercial activity as held by the catena of judgments.

The Tribunal observed that there was no material brought on record by the CIT(E) to conclude that the activities of the trust were not genuine.  Therefore, the Tribunal directed the CIT(E) to grant registration u/s.12AB of the Income Tax Act from the date of application.

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