For Registration u/s 12AB, phrase “genuineness of activities” is interpreted liberally

Phrase “genuineness of activities” has been interpreted liberally by various judicial forums including the ITAT and High Courts – ITAT

In a recent judgment, ITAT Jodhpur has held that the phrase “genuineness of activities” has been interpreted liberally by various judicial forums including the ITAT and High Courts, to mean that the trust must be carrying on charitable activities in consonance to its objects.

ABCAUS Case Law Citation:
5018 (2026) (01) abcaus.in ITAT

In the instant case, the appellant assessee had challenged the order passed by the CIT(Exemption) in rejecting its application filed in for registration under section 12AB of the Income Tax Act,1961 (the Act).

The Tribunal noted that the CIT exemption had rejected application filed by the assessee u/s 12A(1)(ac)(iii) in Form No. 10AB seeking registration u/s 12AB of the Act on the ground that firstly the assessee was not registered under Rajasthan Public Trust Act, 1959; secondly the assessee had failed to prove the genuineness of its activities and  thirdly the assessee failed to file Audit Report with Income Tax Return for AY 2024-25.

The Tribunal observed that the assessee’s application was pending for registration under Rajasthan Public Trust Act, 1959 and that the assessee was registered just few months to rejection of its application for registration by the CIT exemption vide impugned order.

The Tribunal admitted the copy of certificate of registration under Rajasthan Public Trust Act 1959, affidavit regarding the Genuineness of activities with the Affiliation Certificate and the Audit Report with Income Tax Return.

The Tribunal further observed that as per section 12AB, the CIT (Exemptions) is required to satisfy himself about the genuineness of activities in compliance with the objects of the trust and it is clarified that the phrase “genuineness of activities” has been interpreted liberally by various judicial forums including the Hon’ble ITAT and High Courts, to mean that the trust must be carrying on charitable activities in consonance to its objects.

The Tribunal opined that considering the principles of natural justice, it would be just fair and reasonable that one more opportunity may be granted to the assessee.

The Tribunal was of the view that the assessee had good and arguable case for granting registration u/s 12AB of the Act. Accordingly, the Tribunal set aside the issue of grant of registration u/s 12AB to the file of the CIT(E) with a direction to examine the issue afresh as per amended law as the registration under Rajasthan Public Trust Act, 1959 had already been granted to the assessee.

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