RAJAH ANNAMALAIPURAM SRI IYYAPPASWAMI TEMPLE TRUST,CHENNAI vs. CIT, EXEMPTIONS,, CHENNAI

Sec.12A(1)(ac) and sec.12AB of the Act and the relevant provisions reads as under:-

12A. [(1)] The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:-

(a) …. (aa)…. (ab)….

(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,—

(i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020)], within three months from the first day of April, 2021;

(ii) where the trust or institution is registered under section 12AB and the period of the said registration is due to expire, at least six months prior to expiry of the said period;

(iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier;

(iv) where registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11, at least six months prior to the commencement of the assessment year from which the said registration is sought to be made operative;

(v) where the trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, within a period of thirty days from the date of the said adoption or modification;

(vi) in any other case, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought, & 2865/Chny/2025 (AY -) Rajah Annamalaipuram – Sri Iyyappaswami Temple Trust and such trust or institution is registered under section 12AB;]

12AB. (1)The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,—

(a)where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years;

(b)where the application is made under sub-clause (ii) or sub- clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,—

(i)call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about—

(A)the genuineness of activities of the trust or institution; and (B)the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects;

(ii)after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub- clause (i),—

(A)pass an order in writing registering the trust or institution for a period of five years; or (B)if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its registration after affording a reasonable opportunity of being heard;

(c)where the application is made under sub-clause (vi) of the said clause, pass an order in writing provisionally registering the trust or institution for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the trust or institution.

(2)All applications, pending before the Principal Commissioner or Commissioner on which no order has been passed under clause (b) of sub-section (1) of section 12AA before the date on which this section has come into force, shall be deemed to be applications made under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A on that date.

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(3)The order under clause (a), sub-clause (ii) of clause (b) and clause (c), of sub-section (1) shall be passed, in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received.

(4)Where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of section 12AA, as the case may be, and subsequently,—

(a)the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or (b)the Principal Commissioner or Commissioner has received a reference from the Assessing Officer under the second proviso to sub-section (3) of section 143 for any previous year; or (c)such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year, the Principal Commissioner or Commissioner shall—

(i)call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified violation;

(ii)pass an order in writing, cancelling the registration of such trust or institution, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place;

(iii)pass an order in writing, refusing to cancel the registration of such trust or institution, if he is not satisfied about the occurrence of one or more specified violations;

(iv)forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the Assessing Officer and such trust or institution.

Explanation.—For the purposes of this sub-section, the following shall mean "specified violation",—

(a)where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution; or & 2865/Chny/2025 (AY -) Rajah Annamalaipuram – Sri Iyyappaswami Temple Trust :: 9 ::

(b)the trust or institution has income from profits and gains of business which is not incidental to the attainment of its objectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c)the trust or institution has applied any part of its income from the property held under a trust for private religious purposes, which does not enure for the benefit of the public; or (d)the trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or (e)any activity being carried out by the trust or institution—(i)is not genuine; or(ii)is not being carried out in accordance with all or any of the conditions subject to which it was registered; or (f)the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause (b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality.

(5)The order under clause (ii) or clause (iii) of sub-section (4), as the case may be, shall be passed before the expiry of a period of six months, calculated from the end of the quarter in which the first notice is issued by the Principal Commissioner or Commissioner, on or after the 1st day of April, 2022, calling for any document or information, or for making any inquiry, under clause (i) of sub-section (4).]]

assessee’s application dated 07.10.2022 needs to be treated as if filed well within the extended time; and secondly, as noted, the assessee couldn’t apply under clause (i) of Section 12A(1)(ac), because drop-down menu didn’t show it and instead it only displayed clause (vi) of Section 12A(1)(ac), which granted it only provisional registration for three years from AY 2023-24 onwards. The assessee Trust after receiving the provisional registration was of the bonafide belief that it was enjoying registration u/s.12AB of the Act without any break/continuity; but to its surprise, the assessee received notices of demand for AY 2022-23, then, it realized that the CPC/PCIT(E) has granted only provisional registration for three years from AY 2023-24 onwards, and then it realized that due to the aforesaid omission of the CBDT not issuing timely Circular extending the time-limit resulted in assessee to select only sub-clause (vi) instead of sub-clause (i), had adversely affected the assessee’s right to continue registration (without a break from AY 2022-23 onwards) and it lost registration for AY 2022-23; immediately on realizing the same, it approached the Tribunal by filing appeal before this Tribunal and thus, there was a delay of ‘1035’ days which was the cause of delay, which we find to be reasonable for condoning because, assessee was legally entitled for re-registration u/s.12AB(a) for five years, if it had applied online by clicking on sub clause (i) instead of sub-clause (vi) of sec.12A(1) of the Act; and for no fault of assessee, since the system didn’t allow the & 2865/Chny/2025 (AY -) Rajah Annamalaipuram – Sri Iyyappaswami Temple Trust assessee to click under clause (i), [since the drop-down menu didn’t show clause (i) instead displayed only clause (vi)], forcing the assessee to click clause (vi). Hence, considering the totality of facts, we do condone the delay and proceed to decide the appeal.

2021 i.e.30.06.2021 which time line has been extended by CBDT taking note of covid/pandemic, genuine hardship faced by assessee, to 25.11.2022; and assessee had filed for registration in Form No.10A on 18.10.2022, legitimately expecting registration u/s.12AB of the Act for five Assessment Years from AY 2022-23 onwards, since assessee was legally entitled for the same as per Sec.12A(1)(ac)(i) r.w.s.12AB(1)(a) of the Act. However, as the drop-down menu of the CPC showed only clause (vi) of Section 12A(1)(ac), while filling up Form 10A on 18.10.2022 instead of sub clause (i), as noted supra, the assessee could only click sub-clause (vi) of sec.12A(1)(ac) of the Act; and the CPC/PCIT(E) processed the application and granted provisional registration for three years from AY 2023-24 onwards; whereas assessee being a Trust enjoying Sec.12AA of the Act from year 1986 was qualified/eligible to apply under sub-clause (i) of Clause (ac) of sec.12A(1) of the Act and in that event if the drop-down menu had shown sub-clause (i), then, it would have automatically got registration u/s.12AB(1)(a) of the Act, for five years i.e. from AY 2022-23 onwards and the assessee would not have faced the problem of not having registration u/s.12AB for AY 2022-23.

According to the Ld.AR, the CBDT, taking note of the hardships and the transition period from the old regime to the new regime and the complexities of the digital world for adapting to the new system and considering the technical glitches, the time to file application for & 2865/Chny/2025 (AY -) Rajah Annamalaipuram – Sri Iyyappaswami Temple Trust registration even re-registration was extended as noted supra and only because assessee filed during the grey period [i.e assessee filed online application on 18.10.2022, circular extending time-line was not existing and CBDT issued it only on 01.11.2022 extending the time-limit up to 25.11.2022]. Hence, its application dated 18.10.2022 should treated as if filed well within the extended time and secondly, as noted, since the assessee couldn’t apply under sub-clause (i) of Section 12A(1)(ac), because drop-down menu didn’t show it and instead displayed clause (vi) of Section 12A(1)(ac), it got provisional registration for three years from AY 2023-24 only, by passing the impugned order dated 18.10.2022 (granting provisional registration from AY 2023-24 to AY 2025-26), which resulted in assessee having no registration for AY 2022-23, which would jeopardize/create insurmountable problems for assessee Trust; And since, assessee had applied for registration well within the extended period of time allowed by the CBDT and taking note of the fact that the assessee is enjoying Sec.12AA registration from year 1986 onwards and eligible as per law to claim registration for five assessment years u/s.12AB of the Act, the claim of assessee should not be denied.

per the scheme of the Act, we find that assessee Trust was legally entitled for registration u/s.12AB(1)(a) for five (5) years; and because of non- extension of time-limit to file application for registration as on 07.10.2022, the assessee had no other option but to file/click sub-clause & 2865/Chny/2025 (AY -) Rajah Annamalaipuram – Sri Iyyappaswami Temple Trust :: 16 ::

(vi) instead of sub clause (i), the assessee’s right for registration u/s.12AB of the Act for AY 2022-23 cannot be denied. We are of the considered opinion that due to technical difficulties faced by the assessee clicking online for fresh registration under clause (vi) of sec.12A(1)(ac) needs to be intervened and rectified; therefore, the assessee’s application for registration under sub-clause (vi) filed on 07.10.2022 is to be treated as if assessee has applied under sub-clause (i) of sec.12A(1)(ac) and granted registration u/s.12AB(a) of the Act for five assessment years from AY 2022-23 onwards. Considering the purpose for issuing Circular by CBDT was for mitigating the hardships faced by assessee, we set aside the impugned order of the Ld.PCIT(E) dated 18.10.2022 and restore the assessee’s application for registration back to the file of the Ld.PCIT(E)/CIT(E)/CPC, Bangalore and direct him to process the application filed by assessee on 07-10-2022 in Form 10A as filed u/s.12A(1)(ac)(i); and the competent authority is at liberty to call for any documents including asking assessee to file hard copy of Form 10 u/s.12A(1)(ac)(i); and thereafter, decide on granting registration u/s.12AB(1)(a) of the Act for five (5) years from AY 2022-23 onwards.

Needless to say, assessee be given opportunity of hearing if the authority desires to hear it and to pass orders in the light of discussion (supra) and in accordance to law.

& 2865/Chny/2025 (AY -) Rajah Annamalaipuram – Sri Iyyappaswami Temple Trust :: 17 ::

Since the impugned action of the Ld.CIT(E) is in violation of natural justice, we set aside the impugned order and restore it back to the file of the Ld.CIT(E) to process the ibid application after the assessee has been granted registration for five (5) years from AYs 2022-23 to 2026-27 as (supra).

Order pronounced on the 23rd day of December, 2025, in Chennai.