Abhinay Taranga Trust Vs ITO (ITAT Bangalore)
Registration Granted After Return Filing but Before Processing: Can CPC Deny a Trust’s Section 11 Exemption?
A trust filed its return claiming exemption under section 11 while holding provisional registration. It obtained final registration only later. By the time the Centralised Processing Centre (CPC) processed the return, however, the final registration had been granted with effect from the very assessment year for which exemption was claimed.
The CPC nevertheless denied the exemption on the ground that registration was not available. In Abhinay Taranga Trust v. ITO, the Bengaluru ITAT held that the date on which final registration was granted could not, by itself, defeat the claim. It directed the Assessing Officer (AO) to allow the section 11 exemption after necessary verification in accordance with law.
The trust’s return and the CPC adjustment
Abhinay Taranga Trust was formed to impart education and training in performing arts, including drama, theatre, cinema and related cultural disciplines. It had obtained provisional registration covering AY 2024–25.
The trust filed its return for that year on 27 September 2024, declaring gross receipts of ₹16,49,220. It claimed ₹7,86,501 as corpus donations under section 11(1)(d) and exemption for the remaining ₹8,62,719 under section 11(1)(a). Its returned total income was therefore nil.
The CPC processed the return on 23 December 2025 and disallowed both claims. The reason stated in the order was that registration under section 12A had not been granted.
The trust appealed. It maintained that it was carrying on charitable and educational activities, had applied its income towards its objects and had supporting audited financial statements. It also argued that its entitlement could not properly be rejected through a prima facie adjustment under section 143(1)(a) when the claim required consideration of registration documents and other records.
Final registration arrived before processing
The crucial date was 28 October 2025. On that date, before the CPC processed the return, the trust received final registration under section 12AB in Form 10AD, effective from AY 2024–25. It placed that document, its provisional registration in Form 10AC, and an audit report in Form 10BB dated 24 September 2024 before the Tribunal.
The Commissioner of Income Tax (Appeals) had upheld the adjustment. The CIT(A) reasoned that registration and mandatory forms were not available on record at the relevant stage. The department similarly argued before the ITAT that the necessary documents were unavailable in the system when the claim was processed.
For the Tribunal, the important factual sequence was clear: the trust filed the return first, obtained final registration effective for the relevant year next, and only then did the CPC process the return. The final registration was also placed before the CIT(A).
What the ITAT said about section 12A(2)
The ITAT examined the proviso to section 12A(2)(b). As explained in its order, where a trust applies for final registration after provisional registration under the relevant provision, sections 11 and 12 apply from the first assessment year for which provisional registration was granted.
Here, final registration covered AY 2024–25, the year under appeal. The Bench held that granting it after the return was filed did not erase its statutory effect for that year. It further noted that the final registration had been granted nearly two months before the return was processed.
The Tribunal also found that the CIT(A) should have considered the registration documents placed before the appellate authority. Once final registration effective for AY 2024–25 was available, it could not be ignored merely because it had not existed when the return was filed.
The relief granted, and its limit
The ITAT set aside the CIT(A)’s finding and directed the AO to allow the section 11 claim after necessary verifications as per law. The trust’s appeal was allowed.
That direction matters in two ways. First, absence of final registration on the return-filing date was not a sustainable reason, on these facts, to deny exemption. Secondly, the Tribunal did not say that possession of a registration certificate automatically proves every component of the return. The AO’s verification under the Act remains part of the operative direction, including examination of the claims made for corpus donations and other exempt income.
The CIT(A)’s order had referred to a mandatory Form 10B, whereas the trust produced an audit report in Form 10BB. The ITAT recorded the Form 10BB but did not separately decide a detailed dispute over which audit-report form applied. Its ruling centred on the effect and timing of the trust’s registration.
Author’s comment
This decision turns on both the effective assessment year and the processing date. The final registration expressly covered AY 2024–25 and had already been granted when the CPC issued its intimation. The proviso to section 12A(2)(b) supplied the further statutory basis for recognising continuity from provisional to final registration.
For a trust facing a similar adjustment, the useful records are the Form 10AC, Form 10AD, their effective assessment years, the return filing date and the intimation date. Together, they show whether the CPC’s “no registration” premise was factually and legally sustainable.
The ruling gives the trust relief from rejection merely because final registration came after return filing. Its actual section 11 claim must still withstand the verification directed by the Tribunal.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The present appeal is filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals) (hereafter, the Ld. CIT(A)) passed under section 250 of the Income Tax Act, 1961 (hereafter, the Act), for the A.Y. 2024-25 dated 27.02.2026.
2. In the memo of appeal, the assessee has multiple grounds, but the effective issue is that Ld. CIT(A) erred in confirming the denial of exemption u/s 11 of the Act by way of adjustment u/s 143(1)(a) of the Act, despite the assessee having valid registration u/s 12A/12AB of the Act.
3. The relevant facts are that the assessee is a public charitable trust formed to impart education and training in performing arts, including drama, theatre, cinema, and allied cultural disciplines. The trust obtained provisional registration under section 12A of the Act on 26th October 2023 w.e.f. AY 2024-25 to 206-27.
3.1 Subsequently, the trust filed ROI for AY 2024-25 as on 27th September 2024. In the ROI, the assessee declared gross receipts of Rs. 16,49,220/-, out of which Rs. 7,86,501/- was claimed as corpus donation under section 11(1)(d) of the Act, and the remaining amount of Rs. 8,62,719/- was claimed as an exemption under section 11(1)(a) of the Act. Accordingly, the assessee declared total income of Rs. NIL.
3.2 The return was processed under section 143(1) of the Act as on 23-12-2025, wherein the claim of exemption of corpus fund and exemption under section 11(1)(a) of the Act was disallowed by the CPC on the reasoning that no registration u/s 12A has been granted.
4. The aggrieved assessee preferred an appeal before the Ld. CIT(A) and submitted that the assessee Trust was genuinely carrying on charitable and educational activities and there was no violation of sections 11, 12 or 13 of the Act. During the year under consideration, the Trust applied its income towards its objects, which is duly supported by the audited financial statements and details of application of income.
4.1 It was further submitted that the issue required examination of facts and supporting documents and, therefore, such adjustment could not have been made as a prima facie adjustment u/s 143(1)(a) of the Act. Furthermore, the assessee submitted that it obtained approval for regular registration under section 12AB of the Act on 28th October 2025 for A.Ys. 2024-25 to 2028-29 (before the intimation order u/s 143(1)) of the Act.
5. The Ld. CIT(A), however, rejected the contention of the assessee and observed that the CPC had denied the exemption claimed u/s 11 and 12 of the Act since the registration and the mandatory Form 10B were not available on record at the time of processing the return u/s 143(1) of the Act. The Ld. CIT(A) further observed that though the return of income was filed within the due date prescribed u/s 139(1) of the Act, the assessee had failed to furnish evidence of registration and the mandatory forms required for claiming exemption u/s 11 and 12 of the Act. Accordingly, the Ld. CIT(A) held that the adjustment made by the CPC was in accordance with law and dismissed the appeal of the assessee.
6. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us, contending that the Ld. CIT(A) erred in confirming the denial of exemption u/s 11 of the Act by way of adjustment u/s 143(1)(a) of the Act, despite the assessee having valid registration u/s 12A/12AB of the Act
7. The Ld. AR before us filed the copy of Form-10AC granting provisional registration dated 23-10-2023, Form-10AD granting approval of regular registration dated 28-10-2025 and copy of audit report in Form-10BB dated 24th September 2024. Accordingly, it was contended that the assessee had valid registration covering the year under consideration. Though the regular registration was not available at the time of filing the return, the same was subsequently granted u/s 12AB of the Act vide Form 10AD dated 28.10.2025 with effect from A.Y. 2024-25. The registration was thus granted before the return was processed u/s 143(1) of the Act on 23.12.2025. The Ld. AR further submitted that the registration documents and Form 10BB were also available before the Ld. CIT(A), but the same were not properly considered while deciding the appeal.
8. The Ld. DR, on the contrary, vehemently supported the orders of the lower authorities and submitted that the exemption claimed u/s 11 of the Act was denied during processing of the return since the necessary registration and mandatory forms were not available in the system. The Ld. DR, therefore, submitted that the action of the CPC and the order of the Ld. CIT(A) do not call for any interference.
9. We have considered the rival submissions of both the parties and perused the materials available on record. The dispute before us is regarding denial of exemption u/s 11 of the Act while processing the return u/s 143(1) of the Act. The CPC denied the exemption mainly on the ground that registration u/s 12A/12AB of the Act was not available.
9.1 On perusal of the record, we find that the assessee filed its return of income for A.Y. 2024-25 on 27.09.2024. It is true that the final registration u/s 12AB of the Act was not available with the assessee at the time of filing the return. However, the final registration was subsequently granted vide Form 10AD dated 28.10.2025. The said registration was granted with effect from A.Y. 2024-25. Further, the return was processed u/s 143(1) of the Act only on 23.12.2025. Thus, on the date of processing of the return, the final registration was already available and the same covered the year under consideration.
9.2 At this stage, it is also relevant to consider the proviso to clause (b) of section 12A(2) of the Act. The said proviso specifically provides that where an application is made under sub-clause (iii) of clause (ac) of section 12A(1) of the Act for final registration after provisional registration, the provisions of sections 11 and 12 of the Act shall apply from the first assessment year for which the trust was provisionally registered. Thus, the statute itself gives effect to the final registration from the assessment year for which provisional registration was granted.
9.3 In the present case, the final registration granted to the assessee covers A.Y. 2024-25, being the year under consideration. Therefore, merely because the final registration was granted after filing of the return should not be a ground to deny the benefit of sections 11 and 12 of the Act for A.Y. 2024-25. The effect of the proviso to section 12A(2)(b) of the Act is that once final registration is granted in continuation of provisional registration, the benefit of sections 11 and 12 of the Act relates back to the first assessment year covered by the provisional registration, subject to fulfilment of the other conditions prescribed under the Act.
9.4 We further note that the above registration was granted on 28.10.2025, whereas the return was processed u/s 143(1) of the Act subsequently on 23.12.2025. Therefore, even before the CPC processed the return, the assessee had obtained final registration covering the year under consideration. In these circumstances, denial of exemption merely on the ground that registration was not available at the time of filing of the return cannot be sustained.
9.5 We also find that the fact of grant of final registration and the relevant registration documents were available before the Ld. CIT(A). The Ld. CIT(A), being a quasi-judicial authority and having powers co-terminus with those of the AO, was required to consider the materials available before him and examine its effect on the claim of the assessee. Instead, the Ld. CIT(A) confirmed the adjustment on the ground that the registration and mandatory forms were not available at the earlier stage. In our view, once the final registration covering the year under consideration was placed before the Ld. CIT(A), the same could not have been ignored while deciding the claim of exemption.
9.6 We further note that the assessee has placed on record Form 10AC granting provisional registration, Form 10AD granting final registration dated 28.10.2025 and the audit report in Form 10BB dated 24.09.2024. Considering these facts and the statutory effect of the proviso to section 12A(2)(b) of the Act, we are of the considered view that the exemption u/s 11 of the Act cannot be denied merely on the ground that the final registration was not available on the date of filing of the return. In view of the above, we set aside the finding of the Ld. CIT(A) on this issue and direct the AO to allow the claim of exemption u/s 11 of the Act after necessary verifications as per law. Accordingly, the effective grounds raised by the assessee are allowed.
10. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 24th Sept. 2026.
