CIT(E) rejection of renewal set aside for Urban Improvement Trust, Pali

The Tribunal considered whether renewal of registration under section 12A/12AB could be refused solely because Urban Improvement Trust, Pali, had not produced registration under the Rajasthan Public Trust Act, 1959. It noted the Trust’s statutory character as an urban improvement authority and the express exemption in section 77 of that Act for public trusts administered by agencies under State control or by local authorities.

On that basis, the Tribunal held that the CIT(E) was required first to examine whether the Rajasthan Public Trust Act applied to the assessee at all before drawing any adverse inference from non-registration. Since a registration not required by law cannot be treated as non-compliance with another law for section 12AB purposes, the rejection on that ground could not stand. The appeal was allowed and the order rejecting the Form 10AB application was set aside.