As per case facts, Baba Gandha Singh Education Trust received Section 12AA registration for educational activities. The Commissioner of Income Tax proposed cancelling this, arguing the Trust generated significant surplus ... income, deviating from its non-profit purpose. The Trust stated surplus was reinvested. The Commissioner cancelled registration, but the Tribunal reversed this. The Commissioner appealed to the High Court. The question arose whether an educational institution loses its charitable status and exemption eligibility solely due to generating surplus income, even if reinvested in education. Finally, the High Court, relying on Supreme Court precedents, ruled that mere generation of surplus income from educational activities, if reinvested for its objects, is not a valid ground for cancelling Section 12AA registration. The High Court found no proof of non-charitable activities.