Gujrati Vaishnav Seva Trust Vs CIT (Exemptions) (ITAT Bangalore)
Assessee trust filed an application (Form 10AB) on 29.06.2024 seeking registration under Section 12AB. CIT(Exemptions) denied registration on the grounds that the activities had not commenced meaningfully, no substantial expenditure was incurred towards charitable objects, Certain trust deed clauses & documents were missing or inadequate and that trust’s objectives included education & religious activities.
Assessee argued before the Tribunal that all the necessary documents were submitted. Activities were commenced, & minor expenditures were incurred. It is the genuineness of activities, not the quantum of expenditure, that is relevant for 12AB registration.
Tribunal’s found that the rejection was primarily based on the low expenditure, not on any evidence of non-genuineness. Trust had invested funds in FDs & filed Form 10 for accumulation toward future projects, a valid action for new trusts. ITAT cited precedents, including Dhwani Shristi Foundation v. CIT(E) & Ananda Social & Educational Trust v. CIT (SC), which clarify that even proposed activities can justify registration, substantial spending is not mandatory in the first year and that registration must be granted if the trust’s objectives & initial actions are genuine.
ITAT held that CIT(E) erred by rejecting the application solely due to low expenditure & directed CIT(E) to grant registration under Section 12AB as applied on 29.06.2024.
