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Facts
The assessee, a society registered since 1986, obtained provisional registration under Section 12A(1)(ac)(i) on 17.06.2024. Subsequently, it filed Form 10AB for permanent registration, which was rejected by the CIT(Exemption) as the earlier registration was considered surrendered, leading to the cancellation of the existing registration.
Held
The Tribunal held that the assessee's application in Form 10AB should be treated as infructuous because a final registration for five years was already granted on 17.06.2024. The CIT(Exemption)'s order to cancel the registration was deemed unwarranted.
Key Issues
Whether the CIT(Exemption) was justified in rejecting the application for permanent registration and cancelling the existing registration when the assessee had already obtained a valid provisional registration for five years.
Sections Cited
12A, 12A(1)(ac)(i), 12A(1)(ac)(iii), 12A(1)(ac)(vi), 12AB, 12AB(1)(b), 80G(5)(i)
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R. RAGHUNATHA
अपीलाथ� क� ओर से/Appellant by : Shri Arjun Raj, Advocate ��यथ� क� ओर से/Respondent by : Shri R. Clement Ramesh Kumar, CIT सुनवाई क� तारीख/Date of Hearing : 07.04.2025 घोषणा क� तारीख/Date of Pronouncement : 21.04.2025 आदेश /O R D E R
PER S.R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Exemption), Chennai dated 26.12.2024.
The assessee has raised the following grounds of appeal:-
1. The order of the CIT (Exemptions), Chennai dated 26.12.2024 vide DIN & Order No. ITBA/EXM/F/EXM45/2024-25/1071598155(1) is contrary to law, fact and in circumstances of the case.
- 2 - ITA. No:142/Chny/2025
2. The CIT (Exemptions), Chennai erred in dismissing the application filed erroneously in Form No. 10AB dated 26.06.2024 in seeking registration of the appellant Trust under Section 12A(1) (ac) (ii) of the Act which was already granted vide DIN: AAATT9549DE2021101 dated 17.06.2024 in cancelling such registration without assigning proper reasons and justification.
3. The CIT (Exemptions), Chennai erred in cancelling the registration available for the appellant trust in consequence to dismissal of the application filed in Form No. 10AB dated 26.06.2024 without assigning proper reasons and justification.
4. The CIT (Exemptions), Chennai failed to appreciate that the inadvertent mistake in filing Form No. 10AB in seeking conversion of provisional registration to final registration in terms of clause (ii) to Section 12A(1)(ac) of the Act despite having been granted final registration in Form No. 10AC in terms of Section 12A(1) (ac) (i) of the Act for period falling between AY 2022-23 to AY 2026-2027 vide DIN: AAATT9549DE2021101 in consequence to filing of Form No. 10A consequent to the Circular No. 7/2024 dated 25.04.2024 issued by the CBDT, New Delhi would vitiate the impugned order in its entirety. 5. The CIT (Exemptions), Chennai failed to appreciate that there was no scope for cancelling the registration already granted in terms of Section 12A of the Act during the course of the registration instituted in consequence to wrong / inadvertent filing of Form No. 10AB dated 26.06.2024, there by vitiating the disputed rejection order in its entirety. 6. The CIT(Exemptions), Chennai failed to appreciate that the order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 7. The CIT(Exemptions), Chennai failed to appreciate that there was no effective/proper opportunity given before passing the impugned order including non granting of personal hearing and any order passed in violation of the principles of natural justice is nullity in law. 8. The Appellant craves leave to file additional grounds/arguments at the time of hearing.
Brief facts of the case are that the assessee is a society existing from 16.10.1986 registered u/s.12A(a) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide certificate dated 29.09.1995.
- 3 - ITA. No:142/Chny/2025 As per the amended provision, the assessee filed an application for approval on 21.09.2021 in Form No.10A u/s.80G(5)(i) of the Act and the same has been approved by the CPC on 02.10.2021 from AYs 2022-23 to 2026-27. Subsequently on 28.03.2023, the assessee filed an application in Form No.10AC for registration u/s.12A(1)(ac)(vi) of the Act. The CPC issued the registration in Form 10AC provisionally on 04.04.2023 for three years i.e., from AY 2023-24 to 2025-26. Later the assessee came to know that the trust has been granted a provisional registration in Form 10AC as a new trust instead of old trust, since the society is existing from 16.10.1986. The Circular No.7/2024 dated 25.04.2024 was issued by the CBDT, wherein any existing trust or institution who have failed to file the proper applications were given opportunity to file the same upto 30.06.2024. Accordingly, the assessee filed a fresh application on 10.06.2024 in Form 10A u/s.12A(1)(ac)(i) of the Act and obtained a provisional registration u/s.12A(1)(ac)(i) of the Act for five years from AY 2022-23 to 2026-27. Later the assessee filed an application u/s.12A(1)(ac)(iii) of the Act in Form 10AB on 26.06.2024 seeking permanent registration.
- 4 - ITA. No:142/Chny/2025 3.1 Since, the assessee has obtained the provisional registration as an old existing trust u/s.12A(1)(ac)(i) of the Act on 17.06.2024, the registration obtained inadvertently on 04.04.2023 as a new trust has been surrendered. The CIT(Exemption) considering the above facts observed that the assessee has surrendered the provisional registration u/s.12AB in Form 10AC, rejected the application of the assessee and also cancelled its registration by passing an order dated 26.12.2024 by holding as under:- 4 Decision:
4.1 The applicant filed its reply on 10.12.2024 but failed to offer any satisfactory explanation. On careful consideration of material on records, the present application filed in Form 10AB on 26.06.2024 is rejected for the following reasons: i) From the above reply of the applicant, it is clear that the applicant has surrendered the provisional registration u/s 12AB in Form 10AC. As per the provisions of section 12A(1)(ac)(iii) of the Act, only the institutions who are provisionally registered u/s. 12AB in Form t0AG are eligible to file Form No.10AB u/s.12A(1)(ac)(iii), when the said provisional registration is due to expire, or within six months of commencement of its activities, whichever is earlier. Since, the applicant has surrendered the provisional registration u/s 12AB in Form 10AC, the applicant is not entitled to file application in Form 10AB u/s. 12A(1)(ac)(iii). ii) With respect to the CBDT's Circular No.7/2024 dated 25.04.2024, it is stated that the said circular only talks about extension of due for filing of Form 10A/10AB under the Income Tax Act, 1961 and does not allow the applicant to file Form 10AB u/s12A(1)(ac)(iii), without having valid provisional registration u/s 12AB in Form 10AC.
4.2. As explained in para 1 of this order, as per the provisions of section 12AB(1)(b) clause (ii) (B) of the I.T.Act, 1961, if the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (v) of section 12A(1)(ac) and the Principal Commissioner or Commissioner has not - 5 - ITA. No:142/Chny/2025 satisfied, he can reject application as well as cancel the registration of the trust/institution.
4.3 In view of the above facts and circumstances, the application filed by the applicant on 26.06.2024 in Form No.10AB u/s.12(1)(ac)(iii), seeking registration u/s.12AB of the I.T.Act, 1961 is rejected and its registration also cancelled.
Aggrieved, the assessee is in appeal before us and submitted the above facts and prayed for directing the Ld.CIT(E) to reinstate the registration granted to the society as an existing trust.
Per contra the Ld.CIT DR submitted that the Ld.CIT(E) has cancelled the registration granted to the society as a new trust only.
We have heard both the parties, perused materials available on record, the paper book and gone through orders of the authorities below. Admittedly, the assessee society is existing from 16.10.1986 and also having registration u/s.12A(a) of the Act from 29.09.1995 (Page Nos. 1 & 13 of PB). Further, we note that the assessee had obtained provisional registration u/s.80G(5)(i) and also 12A(1)(ac)(vi) of the Act by choosing a wrong section which is meant for new trust (Page Nos.15 & 18 of PB). We find that based on the circular issued by the CBDT vide 7/2024 dated 25.04.2024, the assessee had filed a fresh application u/s.12A(1)(ac)(i) of the - 6 - ITA. No:142/Chny/2025 Act as an existing trust and obtained registration dated 17.06.2024 for five years by surrendering the earlier provisional registration obtained by quoting the wrong clause. Subsequently, the Assessee had applied for final registration in Form No. 10AB erroneously without noticing the fact that the final registration has already been granted for five years. However, on filing of an application in Form 10AB for permanent registration u/s.12A(1)(ac)(iii) of the Act dated 26.06.2024, the CIT(Exemption) has passed an order by rejecting the application of the assessee for the reason that the assessee has already surrendered provisional registration certificate and also cancelled the registration. We note that the assessee is an existing society from 16.10.1986 and had surrendered the provisional registration certificate obtained inadvertently as new trust, since it had obtained two registrations separately (both as new as well as existing trust). Therefore, in the present facts of the case we are of the considered view that the application in Form 10AB filed u/s.12(1)(ac)(iii) of the Act ought to have been treated as infructuous since the final registration is already granted for five years by treating the Assessee as existing trust. The findings recorded by the Ld.CIT(Exemption) to cancel the registration is unwarranted and therefore, in the present facts and circumstances of the case, we direct the CIT(Exemption) to treat the application
- 7 - ITA. No:142/Chny/2025 filed in Form 10AB as infructuous in view of the availability of registration to the society granted on 17.06.2024 for five years which shall remain valid till the AY 2026-27.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21st April, 2025 at Chennai.