High Court of Judicature for Rajasthan · Judgments and reasoned final orders
The Commissioner of Income Tax (Exemption), Jaipur v. Shri Baba Balak Nath Seva Sansthan
D.B. Income Tax Appeal No. 60/2025 ·
Charitable trust registration under section 12A/12AB read with section 2(15): rejection based on trust-deed objects mentioning cottage industries/handicrafts and an event pamphlet organized by a third party rightly set aside by ITAT where 5 years' accounts showed no commercial activity or profit motive.
1. FACTS OF THE CASE
The CIT(Exemption), Jaipur rejected the applications of Shri Baba Balak Nath Seva Sansthan for registration under section 12AB on two grounds: (i) objects 3 and 6 of the trust deed referred to development and sale of products from small cottage industries, handicrafts, carpentry and food processing, which the CIT(E) viewed as commercial under section 2(15); and (ii) a pamphlet indicated an event allegedly outside the trust's objects. By order dated 15.10.2024, the ITAT Jaipur allowed the trust's appeals.
2. DISCUSSION BY THE COURT
Upheld the ITAT's concurrent factual findings: (1) The income and expenditure statements for the preceding five years established that the trust had never carried out any commercial activity under objects 3 and 6, and under settled law an authority alleging that trust objects are commercial must establish that the dominant intention of the trust is profit-making; and (2) The pamphlet showed that the event in question was organized by one Ms. Ritu Agarwal and not by the assessee trust contrary to its objects.
3. JUDICIAL DECISION
Holding that no substantial question of law arose, the Division Bench dismissed D.B. Income Tax Appeal No. 60/2025.
4. OUTCOME
Assessee - Revenue's appeal dismissed; no substantial question of law arises from ITAT order granting section 12A/12AB registration.
5. AKHB REVIEW POINT
AKHB analysis: in section 12AB registration proceedings, the mere presence of vocational/cottage-industry training clauses in a trust deed does not attract the commercial-activity bar of section 2(15) or AUDA unless the dominant object is profit-making and actual commercial receipts are demonstrated in the accounts.
Source and verification
3-page official High Court of Judicature for Rajasthan judgment PDF (20250908_RJHC020420992025.pdf).
Original PDF: 3 pages · SHA-256: 6514a0826596713cc22cda956a4fb3d730c3e45d34a09b0028244965dbccd634
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies sections 2(15), 12A and 12AB of the Income-tax Act, 1961. Income-tax Act, 2025 equivalence is not verified.
Full primary judgment PDF read page-by-page and verified against the AKHB Google Drive repository. Comprehensive subsequent judicial treatment has not been independently verified.
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