Section 12AB(1)(b)

Section 12AB(1)(b) — the law in short

What the courts have decided on section 12AB(1)(b), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• JITO Incubation and Innovation Foundation v CIT (Exemption), Mumbai ITATHelps taxpayerValidity unconfirmed
  The CIT(E) refused my Form 10AB because the memorandum says the objects may be carried out in India 'and elsewhere'. Is a possible application of funds outside India a ground to refuse registration?
  No. What the Commissioner has to satisfy himself about at the registration stage under s.12AB(1)(b) is the objects of the trust, the genuineness of its activities and compliance with other laws material to achieving its objects. Whether income has actually been applied within or outside India is a question that arises only when exemption under s.11 is claimed, and refusing registration on that ground is premature.
• Lakulish Sanatan Sanskriti Prabodhan Abhiyan v CIT (Exemption), Ahmedabad ITATHelps taxpayerValidity unconfirmed
  I did not file the Rule 17A documents in time and the CIT(E) rejected my Form 10AB, cancelled the provisional registration and directed computation of tax under s.115TD. Can a rejection for non-filing carry all that?
  Not without an inquiry into the merits. The Tribunal set the order aside and restored the matter for de novo consideration, holding that the CIT(E) had rejected the application solely for non-filing of documents, after only two notices at very short intervals, without any verification or inquiry, and that procedural lapses alone should not result in denial of substantial justice. It did not decide the s.115TD point, which was raised only in argument.
• MAA Sharda Kothari Foundation v CIT (Exemption), Ahmedabad ITATHelps taxpayerValidity unconfirmed
  The CIT(E) rejected my Form 10AB as premature because the trust had not yet started activities or received donations. Can he do that?
  No — not on that ground alone. Section 12A(1)(ac)(iii) fixes only the outer date by which a provisionally registered trust must apply for regular registration; it contains no bar on applying earlier, and rejecting an application as premature because activities had not commenced by the date of filing is not in accordance with the legislative intent of that clause read with s.12AB(1)(b).

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.