ITAT directed CIT to grant registration u/s 12AA

1. Jaipal Singh Sharma Trust had its main objectives to provide health education and to establish medical colleges and hospitals etc. 2. It filed an application for grant of registration u/s 12AA of the Income Tax Act 1961. 3. CIT rejected the said application on the ground that Jaipal trust had not taken any steps in pursuance of its aims and objects, except acquisition of land. 4. CIT also held that the evidence to show the capacity of the lenders who had advanced loans to Jaipal trust, was not sufficient. 5 On appeal, the ITAT held that it is well settled that at the stage of grant of registration, the non-commencement of the activities by the trust cannot be a ground for refusal of registration u/s 12AA of the Act. 6. It held that CIT’s comments on capacity of the lenders were vague and not conclusive. 7. Such comments cannot be a ground for refusal of grant of registration u/s 12AA of the Act. 8. ITAT directed CIT to grant registration u/s 12AA.