In Brief
This case addresses the eligibility of newly registered charitable trusts for income tax registration under section 12AA of the Income Tax Act, 1961. The Supreme Court held that a newly formed trust may apply for registration even before undertaking any activities. For registration purposes, the Commissioner must assess whether the trust's charitable objects are genuine and whether its proposed activities align with those objects. The Court distinguished this from cancellation of existing registration, which requires proof of actual activities contrary to the trust's objects. A trust's mere inaction in spending funds is insufficient to deny initial registration but may warrant cancellation under certain circumstances.
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