By TIOL News Service

ALLAHABAD, SEPT 28, 2017: THE issue before the Bench is - Whether if the Registering Authority has recorded no satisfaction as per Sec 12AA, registration can still be granted. NO is the verdict.

Facts of the case:

The Assessee-Trust, applied for registration u/s 12AA of the Income tax Act but, the same was refused by the CIT on the ground that the Assessee was not carrying out any charitable activities and the objects and activities of the Trust were not charitable in nature. On appeal, the Tribunal directed for registration straight away.

High Court held that,

++ section 12AA provides that the Registering Authority after satisfying himself about the objects of the Trust and genuineness of its activities shall pass an order in writing for registration of the Trust or to refuse the registration. Therefore, satisfaction of the Registering Authority is mandatory before any Trust is registered u/s 12AA. Such satisfaction has not to be recorded by any other authority. The registration was refused simply for the reason that the objects and activities of the Trust were not charitable in nature.

++ the said order having been set aside by the Tribunal leaves no material which could reflect that any satisfaction as required exists. Thus, in the absence of any satisfaction of the Registering Authority, the direction to register the Trust is without jurisdiction. The Tribunal could have ordered for setting aside the order of Registering Authority refusing registration but it could not have directed for registration straight away inasmuch as there has to be satisfaction recorded by the Registering Authority which was lacking. Accordingly, the question answered in favour of the Revenue and against the Assessee and it is held that the Tribunal has no jurisdiction in law to direct for registration of the Trust without there being satisfaction recorded by the Registering Authority as contemplated by Section 12AA.

(See 2017-TIOL-2052-HC-ALL-IT)