CONTENTIONS

1. APPEALLENT - The counsel appeared for the appellants contended that-

a. The appellant argued that The Commissioner of Income Tax must be

convinced of two things: first, the trust's objectives; and second, the trust's
operations. The Commissioner must decline to register such a trust if there
have been no actions carried out by the trust because he or she is unable to
determine if such activities are authentic.

b. The appellant claimed that section 12AA of the Act was intended to only
permit the registration of trusts and institutions with legitimate goals and
endeavours. In other words, the Commissioner must be satisfied that the
Trust's aim is real and that its actions are in support of the equally legitimate
objects of the Trust.

c. The appellant also argued that the Commissioner of Income Tax, therefore,
refused the registration of Trust since the Trust was found not to have spent
any part of its income on charitable activities. This is a case of not carrying out
the objects of the Trust and not carrying on activities contrary to its object.

2. RESPONDENT – The counsel appeared for respondents contended that-

a. The respondent argued that the purpose of Section 12AA of the Act is to
enable registration only of such trust or institution whose objects and activities
are genuine.

b. The Commissioner denied the application on the sole pretext that the trust had
not yet engaged in any activities, making it impossible to register it and,
therefore, impossible to determine if such activities were legitimate.

c. As the trust is entitled to receive benefits under sections 11 and 12 of the Act
as a result of such registration, section 12AA requires the Commissioner to be
so convinced in order to guarantee that the trust's object and its actions are
charitable. The Commissioner is bound to deny such registration if it seems
that the trust's objectives and its operations are not genuine, or charitable.

3. INTERVENORS/AMICUS

Not Applicable.
PROVISIONSOFSTATUTES/CONSITUTION CITED

 The Income- Tax Act, 1995.

Section 11: It talks about the income of the property held for religious and charitable
purposes.
Section 12: It talks about Income of trusts or institutions from contributions.
It says “Any voluntary contributions received by a trust created wholly for charitable
or religious purposes or by an institution established wholly for such purposes (not
being contributions made with a specific direction that they shall form part of the
corpus of the trust or institution) shall for the purposes of section 11 be deemed to be
income derived from property held under trust wholly for charitable or religious
purposes and the provisions of that section and section 13 shall apply accordingly”.
S.12AA: “Registration can be applied for by a newly registered trust. There is no
stipulation that the trust should have already been in existence and should have
undertaken any activities before making the application for registration. The term
‘activities’ in s. 12AA includes ‘proposed activities’. The CIT must consider whether
the objects of the Trust are genuinely charitable in nature and whether the activities
which the Trust proposed to carry on are genuine in the sense that they are in line with
the objects of the Trust”. However, he cannot refuse registration on the ground that no
activities are carried out