The assessee-trust was formed on May 30, 2008 and applied for registration on July 10, 2008, i. e., within a period of about two months. No activities had been undertaken by the assessee before the application was made. The Commissioner rejected the application on the sole ground that since no activities had been undertaken by the trust, it was not possible to register it, presumably because it was not possible to be satisfied about whether the activities of the trust were genuine. The Appellate Tribunal reversed the orders of the Commissioner. The Department appealed to the High Court which upheld the order of the Tribunal holding that in the case of a newly formed trust even though there was no activities, it was possible to consider whether the trust can be registered under S.  12AA of the Act. On appeal the Court held that  the view of the High Court was correct.

 (Decision of the Delhi High Court in DIT v. Foundation of Ophthalmic and Optometry Research Education Centre ( 2013) 355 ITR 361 ( Delhi) (HC) (Delhi) affirmed. CIT v. R. S. Bajaj Society ( 2014) 222 Taxman 111 ( All ) (HC) approved. Self Employers Service Society v. CIT ( 2001) 247 ITR 18 ( (Ker) disapproved. )

The assessee-trust which applied for registration under S.  12AA of the Act  it was found that the Trust has not to have spent any part of its income on charitable activities. The Commissioner refused to grant registration to the trust. The Tribunal reversed the decision of the Commissioner and the High Court dismissed the Department’s appeal therefrom. On appeal, dismissing the appeal, that it had been found that the assessee had not spent any amount of its income for charitable purposes. This was a case of not carrying out the objects of the trust and not of carrying on activities contrary to its objects. These circumstances may arise for many reasons including not finding suitable circumstances for carrying on activities. Undoubtedly the inaction in carrying out charitable purposes might also become actionable depending on other circumstances but it was for the Commissioner to consider the issue by exercising his powers under sub-section (3) of section 12AA, if the facts justified such actions. dismissing the appeals, that the reasons assigned by the High Court in the judgments needed no interference as they were in consonance with law.