M/S. ANANDA SOCIAL AND EDUCATIONAL TRUST versus THE COMMISSIONER OF INCOME TAX & ANR.

Citation: [2020] 1 S.C.R. 721 · Decided: 19-02-2020 · Supreme Court of India · Bench: S.A. BOBDE, SURYA KANT · Disposal: Dismissed

Judgment (excerpt)

A
B
C
D
E
F
G
H
721
M/S. ANANDA SOCIAL AND EDUCATIONAL TRUST
v.
THE COMMISSIONER OF INCOME TAX & ANR.
(Civil Appeal No(s).5437-5438 of 2012)
FEBRUARY 19, 2020
[S. A. BOBDE, CJI, B. R. GAVAI AND SURYA KANT, JJ.]
Income Tax Act, 1961: s.12AA – Registration under, of a newly
registered Trust – Entitlement – Held: A newly registered Trust is
entitled for registration under s.12AA on the basis of its objects,
without any activity having been undertaken – s.12AA of the Act
empowers the Principal Commissioner or the Commissioner of the
Income Tax on receipt of an application for registration of a trust
to call for such documents as may be necessary to satisfy himself
about the genuineness of activities of the trust or institution and
make inquiries in that behalf – It empowers the Commissioner to
thereupon register the trust if he is satisfied about the objects of the
trust or institution and genuineness of its activities – The purpose
of s.12AA of the Act is to enable registration only of such trust or
institution whose objects and activities are genuine – Since s.12AA
pertains to the registration of the Trust and not to assess of what a
trust has actually done, the term ‘activities’ in the provision includes
‘proposed activities’ – That is to say, a Commissioner is bound to
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 – In contrast, the position would be different
where the Commissioner proposes to cancel the registration of a
Trust under sub-section (3) of s.12AA of the Act – In that situation,
the Commissioner would be bound to record the finding that an
activity or activities actually carried on by the Trust are not genuine
being not in accordance with the objects of the Trust – Similarly,
the situation would be different where the trust has before applying
for registration found to have undertaken activities contrary to the
objects of the Trust.
Income Tax Act, 1961: s.12AA – Object of – Held: Is to ensure
that the activities undertaken by the Trust are not contrary to its
   [2020] 1 S.C.R. 721
721
A
B
C
D
E
F
G
H
722
SUPREME COURT REPORTS
[2020] 1 S.C.R.
objects and that a Commissioner is entitled to refuse registration if
the activities are found contrary to the objects of the Trust.
Self Employers Service Society v. Commissioner of
Income Tax (2001) Vol.247 ITR 18 – referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5437-
5438 of 2012.
[From the Judgment and Order dated 08.04.2015 of the High Court
of Delhi at New Delhi in Income Tax Appeal No. 98 of 2015]
 With
Civil Appeal Nos. 4702 of 2014 and 1727 of 2020.
Pritesh Kapur, Ms. Aishwarya Bhati, Sr. Advs., Senthil Jagadeesan,
Ms. Sonakshi Malhan, Ms. Suriti Chowdhary, Ms. Mrinal Kanwar,
Satyalipsu Ray, Vikas Bansal, Mrs. Anil Katiyar, Advs. for the appearing
parties.
The following Order of the Court was passed:
O R D E R
CIVIL APPEAL NO(S).5437-5438/2012
We have heard learned counsel appearing for the parties and
perused the impugned Judgment(s) and Order(s) passed by the High
Court of Karnataka.
In our considered view, the reasons assigned by the High Court in
passing the impugned judgment(s) and order(s) need no interference as
the same are in consonance with law.
Accordingly, there is no merit in these appeals and they are
dismissed.
CIVIL APPEAL NO.4702/2014
This appeal has been preferred by the appellant - Director of
Income Tax against the impugned judgment and order passed by the
Delhi High Court holding that a newly registered Trust is entitled for
registration under section 12AA of the Income Tax Act, 1961 (for short,
the ‘Act’) on the basis of its objects, without any activity having been
undertaken. Section 12AA of the Act reads as follows :
A
B
C
D
E
F
G
H
723
“12AA. Procedure for registration. - (1) The [Principal
Commissioner or] Commissioner, on receipt of an application for
registration of a trust or institution made under clause (a) or clause
(aa) or clause (ab) of sub-section (1) of section 12A, shall-
(a) call for such documents or information from the trust or
institution as he thinks necessary in order to satisfy himself about
the genuineness of activities of the trust or institution and may
also make such inquiries as he may deem necessary in this behalf;
and
(b) after satisfying himself about the objects of the trust or institution
and the genuineness of its act

Excerpt shown. Read the full judgment & AI analysis in Lexace.