SUNRISE EDUCATION TRUST,SURENDRANAGAR V. THE CIT(EXEMPTION), AHMEDABAD, AHMEDABAD

ITA 249/AHD/2025

AI Insights

The case involves the Sunrise Education Trust, which appealed against the decision of the Commissioner of Income Tax (Exemption), Ahmedabad, denying their registration under section 12A of the Income Tax Act, 1961. The Trust, originally registered under section 12A, sought re-registration under the new provisions effective from April 1, 2021. Due to an inadvertent error, the Trust applied under the wrong clause (vi) of section 12A(1)(ac), which led to the rejection of their application. The Tribunal noted that similar cases had been decided where incorrect quoting of the clause was not considered fatal and set aside the rejection, directing the CIT(E) to reconsider the application under the correct clause.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713209 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• 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: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: CHIRAG SHAH
• Keywords: Set aside
• Section: 11; 12AA; 12A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA,ACCOUNTANT MEMBER & SHRI T.R.SENTHIL KUMAR, JUDICIAL MEMBER ITA No.249/Ahd/2025 Sunrise Education Trust C/o. Chavda Dhirubhai P. PO Tuva, Wadhwancity Surendranagar - 363 421 Vs. The CIT (Exemption) Ahmedabad–380 015 PAN No. : AAFTS 9891 J (Appellant) .. (Respondent) Assessee by : Shri Chirag Shah, AR Revenue by : Shri Rignesh Das, CIT-DR Date of Hearing 17/07/2025 Date of Pronouncement 30/07/2025 आदेश / O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: This appeal is filed by the assessee as against the order dated 02/12/2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”] denying registration under section 12A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). 2. Brief facts of the case are that the assessee is a Trust incorporated on 12/09/2003 providing education at affordable cost to the needy students of the Society. The Trust was registered under section 12A of the Act, claiming exemption under section 11 of the Act. As per the new provisions of the Act, with effect from 01/04/2021, the assessee-trust was to be re-registered as per the Printed from counselvise.com ITA No.249/Ahd/2025 Sunrise Education Trust vs. The CIT(Exemption), Ahmedabad - 2 - procedures mentioned in clauses (i) to (vi) under section 12A(1)(ac) of the Act. Thus, the assessee-trust sought a provisional registration u/s.12AB of the Act, which was granted by Ld.CIT(E) vide order dated 31/05/2021 from A.Y. 2022-23 to A.Y.2024-25. The assessee was required to make application for final registration under clause (iii) of section 12A(1)(ac) of the Act. However, inadvertently the assessee-trust applied under clause (vi) of section 12A(1)(ac) of the Act in Form No.10AB. 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 which has not commenced its activities. As the assessee-trust had claimed exemption u/s.11 of the Act, the assessee’s application was rejected by Ld.CIT(E). 3. Aggrieved against the order of rejection, the assessee is in appeal before us raising the following Grounds of Appeal: “1. The order passed by CIT (EXEMTION) for rejecting 12AA is bad in law and deserved to be uncalled for. 2. All the condition required for registration under 12AA are fulfilled by the appellant and order passed by the CIT (EXEMTION) should be uncalled for. 3. The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal during the course of hearing.” 4. Heard rival submissions and perused the material available on record. Ld.Counsel for the assessee submitted before us copy of Form No.10AB filed by the assessee, wherein the assessee-trust inadvertently claimed for regular registration under clause (vi) of section 12A(1)(ac) of the Act. Whereas the assessee being a trust Printed from counselvise.com ITA No.249/Ahd/2025 Sunrise Education Trust vs. The CIT(Exemption), Ahmedabad - 3 - already registered under the Act and also got a provisional registration under the new regime on 31/05/2021. The assessee ought to have made application in clause (iii) of section 12A(1)(ac) of the Act. 4.1. 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.). 4.2. 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 Printed from counselvise.com ITA No.249/Ahd/2025 Sunrise Education Trust vs. The CIT(Exemption), Ahmedabad - 4 - Clause When to Apply Time Limit for Filing Application Form Type of Registration (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 5. 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. 6. 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 Printed from counselvise.com ITA No.249/Ahd/2025 Sunrise Education Trust vs. The CIT(Exemption), Ahmedabad - 5 - the file of CIT(E) to consider the registration under correct provision by accepting in fresh Form 10AB and pass order in accordance with the provisions of law. 6.1. 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 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. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 30/07/2025 Sd/- Sd/- SS (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30/07/2025 T.C. NAIR, Sr. PS Printed from counselvise.com ITA No.249/Ahd/2025 Sunrise Education Trust vs. The CIT(Exemption), Ahmedabad - 6 - Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The Concerned CIT 4. The CIT(A)-(NFAC) 5. The DR, ITAT, Ahmedabad 6. Guard file. BY ORDER, सȑािपत Ůित //True Copy/ //True Copy// (Dy./Asstt.Registrar) ITAT, Ahmedabad Printed from counselvise.com "