Mere Low Spending Not a Ground to Deny Section 12AB Registration: ITAT Bangalore

 

St. Joseph Engineering College Alumni Association, Mangalore (ITA No. 424/Bang/2025)

Facts:
1. Assessee is a registered society (Alumni Association) engaged in charitable and social welfare activities. Provisional Registration was granted to the assessee on 16.02.2022 under Section 12AB. An application for final registration was filed in Form 10AB on 28.06.2024.

2. CIT(Exemptions) rejected the application on the ground that only around ₹25,000–30,000 spent on charity/social work in relevant years. Marathon against drugs seen as a private event not benefitting general public. CIT(E) concluded that the assessee had not commenced its activities.

3. Assessee submitted detailed documentation (MoA, bank statements, financials, Form 10, etc.) and argued that genuineness, not quantum, of activities is the test under Section 12AB. Marathon was a public event for awareness — a valid charitable activity under Section 2(15).

ITAT Bangalore held as below:
1. We take a note of the fact that the main judiciousness in rejecting the registration of the assessee trust is that the assessee had not made substantial amount of expenditure towards the object. Further, there is not even a whisper about any non-genuineness of the activities carried on by the assessee trust.

2. We are of the considered opinion that it is not the quantum of expenditure which is relevant for the purpose of granting registration but in fact the genuineness of the activity of the trust in accordance with the object of the trust.

3. The marathon against drug abuse was a public event aimed at spreading awareness, which qualifies as a charitable activity under the category of general public utility under Section 2(15). Further, there is not even a whisper about any non-genuineness of the activities carried on by the assessee trust.

4. We allow the appeal of the assessee and direct the ld. CIT(E) to grant registration u/s 12AB of the Act as applied by the assessee trust on 28.6.2024 in form No. 10AB. It is ordered accordingly.

The copy of the order is as under: