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Facts
The assessee trust obtained provisional registration and subsequently applied for final registration under section 12AB. The CIT(E) rejected the application due to a delay in filing for regularization of provisional registration.
Held
The Tribunal held that the CIT(E) incorrectly applied the limitation provision as the assessee was an existing trust carrying out activities prior to obtaining provisional registration, and the application for final registration was filed before the expiry of the provisional registration.
Key Issues
Whether the rejection of the application for final registration under section 12AB was justified on grounds of limitation, considering the assessee was an existing trust.
Sections Cited
12AB, 12A(1)(ac)(iii), 12AA, 12A
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Income Tax Appellate Tribunal, MUMBAI “C” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI SANDEEP SINGH KARHAIL
O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Exemptions)-Mumbai [„Ld.CIT(E)‟], dated 27- 09-2025, wherein the assessee‟s claim of final registration u/s. 12AB of the Income Tax Act, 1961 („the Act‟) was rejected.
Briefly, the facts of the case are that the assessee has obtained provisional registration vide order dt. 05-05-2023 in Form-10AC, which was valid from AY. 2024-25 to 2026-27. Subsequently, the assessee moved an application seeking final registration in Form-10AB on 19-03-2025 u/s. 12A(1)(ac)(iii) of the Act, seeking registration u/s. 12AB of the Act.
Referring to the provisions of Section 12A(1)(ac)(iii) of the Act, the Ld.CIT(E) held that since the trust has been carrying out its activities since obtaining provisional registration on 05-05-2023, the trust should have applied for regularization of provisional registration by the end of November, 2023 (being six months from the commencement of its activities). However, in the instant case, the trust has applied for regularization of provisional registration on 19-03-2025 i.e., after delay of 15 months, which is not valid as per the above provision as the application is filed beyond permissible time limit. Therefore, on account of delayed fining of the application, the same was rejected and against the said order and the findings of the Ld.CIT(E), the assessee is in appeal before us.
During the course of hearing, the Ld.AR submitted that the trust was constituted on 20-02-2018 and has been granted registration u/s. 12AA of the Act vide order dt. 28-06-2019 and it has been carrying out its activities since then. It is therefore, not a case that the assessee-trust has started activities only after receipt of the provisional registration. It was submitted that the Ld.CIT(E) has wrongly construed the facts of the instant case, wherein it has held that the trust has been carrying out its activities only after obtaining provisional registration on 05-05-2023. It was submitted that given that the assessee-trust has sought final registration on 19-03- 2025 which is well before six months prior to expiry of provisional registration. Which was expiring on 31-03-2026 and the application has wrongly been rejected by the Ld.CIT(E). It was submitted that the matter may be set aside to the file of the Ld.CIT(E) for necessary adjudication on merits of the case.
Per contra, the Ld.DR has been heard, who has relied on the order of the Ld.CIT(E).
We have heard the rival contentions and perused the material available on record. We find that it is a case of an existing trust duly registered u/s 12A and which under the new registration regime was required and has initially sought provisional registration and thereafter, has applied for final registration u/s 12AB of the Act. The trust has been carrying out its activities since its incorporation as evident from its application and therefore, the findings of the Ld.CIT(E) that the trust has been carrying on its activities after obtaining provisional registration, is not factually correct and basis such incorrect appreciation of factual aspects of the matter, we find that the Ld.CIT(E) has dismissed the application, seeking final registration u/s 12AB as barred by limitation invoking the second limb of section 12A(1)(ac)(iii) of the Act. Given that it is a case of an existing trust carrying out its activities as evident from its application and not a case of new trust, the second limb of 12A(1)(ac)(iii) doesn‟t apply in the instant case. In light of the same, we set aside the findings of the Ld.CIT(E) where assessee‟s application has been rejected on account of limitation and the matter is remitted to the file of the Ld.CIT(E) to admit the application and decide the same on merits, after providing reasonable opportunity to the assessee trust.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 16-02-2026