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7. The CIT(E) while refusing to grant registration under Section 12A of the Act, 1961 has neither doubted nor recorded his dis-satisfaction with regard to the objects of the trust. In other words, the CIT(E) has neither held nor doubted the objects of the respondent trust to be not charitable. Thus, there is no dispute that the objects of the respondent trust is charitable as defined in Section 2(15) of the Act, 1961.

8. The only ground on which the CIT(E) rejected the application of the respondent trust for registration under Section 12AA of the Act, 1961 is that the trust has not yet started its activities. The ITAT has set aside the order of the CIT(E) holding as under:

"4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the issue before us is as to whether it is essential for a trust to commence charitable activity before it can be considered eligible for registration u/s. 12AA of the Act We note that the objects of the assessee trust are relief of the poor, education, medical relief and advancement of objects of general public utility, to establish support, maintain and/or grant aid or other assistance financial or otherwise to schools, colleges, vidyapiths, libraries, read rooms, lecture halls and other establishments and institutions for the advancement of education and diffusion of knowledge in art, humanities, science, commerce, industry. agriculture and any other objects of similar nature pertaining to education, grant scholarship, stipends, prizes, rewards allowance or other financial assistance ete., to establish support and/or maintain hostels, boarding houses etc. From the reading of the objectives of the Trust, it is clear that these are charitable objects and are supported by other ancillary objects to which a detailed reference is not necessary.

9. Section 12AA undoubtedly requires the Commissioner to satisfy himself about the objects of the trust or institution and genuineness of its activities and grant a registration only if he is so satisfied. The said section requires the Commissioner to be so satisfied in order to ensure that the object of the trust and its activities are charitable since the consequence of such registration is that the trust is entitled to claim benefits under sections 11 and 12 of the Act. In other words, if it appears that the objects of the trust and its activities are not genuine that is to say not charitable the Commissioner is entitled to refuse and in fact, bound to refuse such registration.

The purpose of section 12AA of the Act is to enable registration only of such trust or institution whose objects and activities are genuine. In other words, the Commissioner is bound to satisfy himself that the object of the Trust are genuine and that its activities are in furtherance of the objects of the Trust, that is equally genuine.

11. Since section 12AA pertains to the registration of the Trust and not to assess of what a trust has actually done, we are of the view that the term 'activities' in the provision includes 'proposed activities'. That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust.