ANANYA EDUCATION AND CHARITABLE TRUST,GANDHINAGAR V. THE CIT(EXEMPTION), AHMEDABAD

ITA 458/AHD/2025

AI Insights

The case involves the Ananya Education and Charitable Trust, which appealed against the denial of its registration under Section 12AB and 80G(5) of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemption), Ahmedabad. The Trust had initially applied under a wrong clause (vi) of Section 12A(1)(ac), which was not applicable as it pertained to new trusts, whereas the Trust had already claimed exemptions under Section 11 in previous years. The Tribunal noted that the incorrect quoting of the clause was not fatal to the application and referenced several precedents where similar mistakes were rectified by considering the application under the correct provisions. The Tribunal thus set aside the CIT(E)'s decision and remanded the case for re-evaluation under the appropriate clause.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712945 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Other Referred Cases: Aatman Foundation vs. CIT(E), Gandhinagar Ayyapa Pooja Samiti vs. CIT(E), Rotary Charity Trust vs. CIT(E)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Set aside; Charitable institution
• Section: 11; 12A; 12

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: DR. BRR KUMAR, VICE PRESIDENT And Shri T.R. SENTHIL KUMAR, JUDICIAL MEMBER Ananya Education And Charitable Trust 30 Alkapuri Society, Panchvati Area Ne Ambica 2-At Kalol, Gandhinagar-382721 Gujarat PAN: AAGTA2351L (Appellant) Vs The CIT(Exemption), Ahmedabad (Respondent) Assessee Represented: Shri Mehul Thakkar, A.R. Revenue Represented: Shri Sher Singh, CIT-DR Date of hearing : 29-07-2025 Date of pronouncement : 31 -07-2025 आदेश/ORDER PER BENCH:- These two appeals are filed by the assessee as against denial of registration under Section 12AB and 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide separate orders dated 02.12.2024 and 03.12.2024 passed by Ld. Commissioner of Income Tax (Exemption), (hereinafter referred to as “Ld. CIT(E)”), Ahmedabad. ITA No: 458 & 459/Ahd/2025 Printed from counselvise.com I.T.A No. 458 & 459/Ahd/2025 Page No Ananya Education and Charitable Trust Vs. CIT(E) 2 2. Brief facts of the case are that the assessee is a charitable trust registered under the Bombay Public Trust Act, 1950 with registration certificate dated 25-08-2017. The assessee Trust never been registered under the Income Tax Act till 07-04-2022, when it first time obtained provisional registration u/s. 12AB of the Act for the Asst. Years 2022-23 to 2024-25. Thereafter the assessee filed application in Form 10AB on 29-06-2024 seeking final registration u/s. 12(A)(1)(ac)(vi)–ITEMB of the Act. The Ld. CIT(E) rejected the application on the ground that the assessee made application under clause (vi) of Section 12A(1)(ac) of the Act which applies only to the new Trust and the assessee Trust having claimed exemption u/s. 11 of the Act, assessee’s application for final registration was rejected. 3. Aggrieved against the order of rejection, assessee is in appeal before us raising the following Grounds of Appeal: 1. The CIT(Exemption), Ahmedabad erred in rejecting the appellant’s application for registration under section 12AB on the ground that the appellant is not eligible to get registered under section 12A(1)(ac)(vi)- ITEM(B) of the Act. The CIT(Exemption) ought to have registered the appellant under some other clause of section 12A of the Act. 2. The appellant craves leave to add, alter or delete any ground either before or in the course of hearing of the appeal. 4. Ld. Counsel Shri Mehul Thakkar appearing for the assessee submitted that the CBDT Circular No. 1/2024 dated 23-01-2024 explaining the provisions of Finance Act, 2023, more particularly clause (e) of Para 15.5.3 of the Circular, the intention of the statute made it clear that those Trust’s and Institution’s which have already commenced activities shall make an application for a Printed from counselvise.com I.T.A No. 458 & 459/Ahd/2025 Page No Ananya Education and Charitable Trust Vs. CIT(E) 3 regular registration under item-B of sub-clause (6) of Section 12A(1)(ac) of the Act without going into the aspects whether the benefit u/s. 11 or 12 of the Act has been claimed in passed or not. The Ld. Counsel further submitted that without prejudice to the above prayer, made an alternative prayer that mere mistake in making application for grant of registration under a wrong provisions/sections was not fatal to grant registration as held by various decisions of the Tribunal. Therefore the matter may be set aside to the file of Ld. CIT(E) and give one more opportunity of hearing to the assessee trust and dispose the assessee’s application based on the amended provisions of law. 5. Per contra, Ld. CIT-DR appearing for the Revenue supported the order passed by the Ld. CIT(E) and requested to confirm the same. 6. We have considered rival submissions and perused the material available on record. Section 12A(1)(ac) was introduced by the Finance Act, 2020, and became effective from 1st April 2021. It provides for mandatory re-registration or fresh registration for trusts and institutions under certain conditions. This provision replaced the earlier system of permanent registration with a renewable registration regime for every five years. It mandates a Trust to apply in prescribed circumstances for:  New registration (first-time applicant),  Provisional registration (for new entities),  Re-registration (due to modification or expiry),  Fresh registration (due to missed deadlines, etc.). Printed from counselvise.com I.T.A No. 458 & 459/Ahd/2025 Page No Ananya Education and Charitable Trust Vs. CIT(E) 4 6.2. For better understanding the clauses (i) to (vi) of section 12A(1)(ac) of the Act, which are applicable to various categories of Trust are tabulated as follows: Clause When to Apply Time Limit for Filing Application Form Type of Registration (i) Trust or institution already registered under section 12A/12AA and wants to migrate to new regime On or before 30.06.2021 (later extended via circulars) 10A Fresh registration valid for 5 years (ii) Trust already registered u/s 12AB and its registration is due for renewal At least 6 months before expiry of current registration 10AB Renewal for 5 years (iii) Trust/institution that has provisional registration and is applying for regular registration At least 6 months before expiry of provisional regn or within 6 months of commencement of activity, whichever is earlier 10AB Final registration for 5 years (iv) Trust has modified its objects (not in conformity with existing registration conditions) Within 30 days from adoption or modification of the objects 10AB Fresh registration for 5 years (v) Trust not previously registered and applies before commencement of charitable activities At least 1 month prior to commencement of the previous year relevant to the assessment year 10A Provisional registration for 3 years (vi) Trust not previously registered and applies after commencement of activities Within the financial year in which activities commenced 10A Provisional registration for 3 years (via) Trust/institution whose registration became inoperative under Section 11(7) (due to 10(23C) approval) and now applies again under Section 12A Before expiry of the approved period under Section 10(23C) or immediately thereafter 10A Provisional/Fresh registration 7. In the present case, the assessee had made application under section 12A(1)(ac)(vi)(B) of the Act. As rightly held by the ld. CIT(E), the condition under that sub-clause was not fulfilled by the assessee as it has claimed exemption under section 11 of the Act in different years. The contention of the assessee is that it did not fulfill the condition as stipulated in clauses (i) to (vi) of section 12A(1)(ac) of the Act. It is true that apparently the case of the assessee does not fall in any of the sub-clauses (i) to (vi). Since the Printed from counselvise.com I.T.A No. 458 & 459/Ahd/2025 Page No Ananya Education and Charitable Trust Vs. CIT(E) 5 assessee has been provisionally registered under section 12AB of the Act, it is eligible to make an application under section 12A(1)(ac)(iii) of the Act. But the application under this sub-clause is required to be made within the period of six months prior to the expiry of period of provisional registration or within six months from the commencement of the activities, whichever is earlier. The contention of the assessee is that the period of six months from the commencement of activities had already expired, which was earlier than grant of provisional registration, and, therefore, it was not eligible for making application under this sub-clause as well. In fact, this sub-clause makes the grant of registration to entities, who have commenced their activities and thereafter apply for provisional registration, very restrictive. An assessee trust might have commenced its activities much prior to the grant of provisional registration. The new trust or institution are required to apply for the provisional registration/approval at least one month prior to the previous year relevant to the assessment year from which the said registration/approval is sought. In the present case the provisional registration was granted to the assessee on 07.04.2022 for the A.Ys. 2022-23 to 2024-25. This was in spite of the fact that the commencement of activities of the trust was much earlier, wherein exemption u/s 11 was claimed for the first time. The intention of the Legislature would not be that a trust will be precluded from applying for final registration, even after the grant of provisional registration, particularly in a case, where the provisional registration was granted after six months from the commencement of its activities. Therefore, the provision of section 12A(1)(ac)(iii) has to be liberally interpreted in order to make such Printed from counselvise.com I.T.A No. 458 & 459/Ahd/2025 Page No Ananya Education and Charitable Trust Vs. CIT(E) 6 trust or institution eligible for registration, where they have been allowed provisional registration after six months from the commencement of their activities. 7.1 As per clause (iii) of section 12A(1)(ac) of the Act, the assessee-trust should make application for regular registration within six months before expiry of the provisional registration or six months of commencement of the activity whichever is earlier. However, this time limit has been extended till 30/06/2024 vide CBDT Circular No.7/2024 dated 25/04/2024. Thus, the assessee- trust filed application in Form No.10AB on 29/06/2024 for final registration, however, inadvertently chosen clause (vi) of section 12A(1)(ac) of the Act, which is not applicable to this assessee-trust. 8. This issue of wrong mentioning of the provisions for registration is no more res integra since various decisions passed by the Co-ordinate Benches, namely, Aatman Foundation vs. CIT(E) 174 taxmann.com 1109 (Ahmedabad-Trib.), Gandhinagar Ayyapa Pooja Samiti vs. CIT(E) 174 taxmann.com 901 (Ahmedabad-Trib.) and Rotary Charity Trust vs. CIT(E) 170 taxmann.com 797 (Mumbai-Trib.) held that wrong quoting of the clause in the Application for registration of a trust is not fatal and set aside the rejection order to the file of CIT(E) to consider under the registration under correct provision by accepting in fresh Form 10AB and pass order in accordance with the provisions of law. 8.1. Following the above decisions, we are of the considered view that there is merit in the claim of the Ld.Counsel that the assessee- trust which had selected wrong clause inadvertently while filing Printed from counselvise.com I.T.A No. 458 & 459/Ahd/2025 Page No Ananya Education and Charitable Trust Vs. CIT(E) 7 Form No.10AB. Therefore, we deem it fit to set aside the impugned order and remit the issue back to the file of Ld.CIT(E) with a direction to consider the rectified application of the assessee under clause (iii) of section 12A(1)(ac) of the Act and grant approval by giving opportunity of hearing to the assessee-trust and well within the provisions of the law. 9. In view of the above facts, the matter is set aside to the file of the ld. CIT(E) with a direction to consider the application of the assessee for registration under the provisions of section 12A(1)(ac)(iii) of the Act. If necessary, the assessee may be directed to file a fresh application under this provision. The appeal of the assessee is allowed for statistical purpose. ITA No. 459/Ahd/2025 10. The application of the assessee under section 80G(5) of the Act should be decided after adjudicating the issue of registration under section 12A(1)(ac) of the Act. Therefore, the appeal of the assessee in ITA No.459/Ahd/2025 is also set aside for statistical purpose. 11. In the result, both the appeals of the assessee are allowed for statistical purpose. Order pronounced in the open court on 31-07-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad: Dated 31/07/2025 Printed from counselvise.com I.T.A No. 458 & 459/Ahd/2025 Page No Ananya Education and Charitable Trust Vs. CIT(E) 8 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "