ITAT Jodhpur: Charitable Registration Cannot Be Denied Merely for Non-Commencement of Activities

April 7, 2026 : The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench has clarified that charitable trusts cannot be denied registration under Section 12AB of the Income Tax Act, 1961 merely because their activities have not yet commenced, so long as their objects are charitable and genuine.

The ruling came in AS Ascent Welfare Society v. CIT (Exemption), Jaipur (ITA Nos. 197, 198, 206 & 207/Jodh/2025), decided on April 7, 2026, by a Division Bench comprising Judicial Member Sudhir Pareek and Accountant Member Dr. Mitha Lal Meena.

The case arose from rejection of applications for registration under Section 12AB and approval under Section 80G by the Commissioner of Income Tax (Exemption), Jaipur. The rejection was primarily based on the ground that the assessee societies had not commenced full-fledged charitable activities and therefore the genuineness of their operations could not be verified. The societies, however, had been constituted with the objective of providing medical relief, particularly to economically weaker sections, and had already undertaken preparatory steps such as acquisition of land and construction of a hospital.

Before the Tribunal, the assessees contended that at the stage of registration under Section 12AB(1)(b), the authority is only required to examine whether the objects are charitable and whether the proposed activities are genuine and aligned with those objects. It was argued that the statute does not mandate that actual charitable activities must have commenced prior to grant of registration.

Accepting these submissions, the Tribunal observed that there was no adverse finding by the Commissioner regarding the charitable nature of the objects. It further noted that the proposed activities of establishing a hospital clearly fall within the definition of “charitable purpose” under Section 2(15) of the Act, and that preparatory steps such as land acquisition and infrastructure development sufficiently demonstrate the intention to carry out charitable activities.

The Bench reiterated that the scope of enquiry at the stage of registration is limited and does not extend to examining the scale or actual commencement of activities. It emphasized that requiring trusts to demonstrate completed charitable operations at a nascent stage would be contrary to the statutory framework.

In reaching its conclusion, the Tribunal relied on the Supreme Court’s decision in Ananda Social and Educational Trust v. CIT, which held that the term “activities” includes proposed activities, and that registration cannot be denied solely because such activities have not yet begun. It also referred to the Rajasthan High Court judgment in CIT v. Vijay Vargiya Vani Charitable Trust, which cautioned against insisting on proof of activities at an initial stage.

Holding that the Commissioner (Exemption) had rejected the applications based on presumptions without recording any adverse finding on the objects, the Tribunal set aside the impugned orders. It directed the grant of registration under Section 12AB(1)(b) along with consequential approval under Section 80G to the appellant societies.