Jai Brahmani Mata Sewa Trust Vs CIT (ITAT Kolkata)
Wrong Clause Is Curable; Existing Registration Cannot Be Declared “Void Ab Initio” in Renewal Proceedings
The Kolkata Bench of the ITAT has held that a charitable trust’s registration cannot be declared “void ab initio” in collateral proceedings concerning conversion or renewal merely because the trust inadvertently applied under an incorrect clause of section 12A(1)(ac). Where the initial registration was still subsisting, the CIT(E) was required to follow the statutory procedure prescribed for cancellation. A technical error in selecting the applicable clause could, at the most, justify modification of the registration from the correct assessment year and not its summary annulment.
Jai Brahmani Mata Sewa Trust was a religious-cum-charitable trust registered with the Additional District Sub-Registrar, Siliguri, on 11-07-2023. It subsequently filed Form No. 10A on 07-09-2023 seeking registration under the Income-tax Act.
The trust applied u/s 12A(1)(ac)(i), a provision intended for trusts or institutions which were already registered u/s 12A or 12AA before the commencement of the new registration regime on 01-04-2021. Acting upon the application, the prescribed authority granted registration in Form No. 10AC on 14-09-2023 for AYs 2022-23 to 2026-27.
Thereafter, on 25-09-2025, the trust filed Form No. 10AB seeking conversion or renewal of the registration u/s 12A(1)(ac)(ii). During the proceedings, the CIT(E) issued notices calling for information to examine the genuineness of the activities and compliance with the trust’s objects.
The CIT(E) asked the trust to produce its registration u/s 12A or 12AA granted before 01-04-2021, since such earlier registration was a necessary condition for making an application under clause (i). The trust replied that the requirement was “not applicable.” On further clarification, it candidly explained that it was a newly constituted trust registered only on 11-07-2023 and therefore could not possibly possess a pre-01-04-2021 registration.
The CIT(E) inferred that the trust had incorrectly represented itself as an old trust while filing Form No. 10A. Since the trust did not exist before 2023, it was not eligible to obtain registration under clause (i) for AYs beginning from 2022-23. According to the CIT(E), the trust had obtained the original registration by furnishing incorrect facts and enjoyed exemption despite not being entitled to registration for the earlier period.
On this reasoning, the CIT(E) not only rejected the application for regular registration but also declared the registration already granted in Form No. 10AC to be invalid and void ab initio.
Before the Tribunal, the trust contended that the CIT(E) had not identified any particular false statement made in Form No. 10A. The complete application and annexures had been placed before the authority when the original registration was granted. If an incorrect sub-clause had inadvertently been selected, it was merely a procedural or classification error.
The trust further argued that the CIT(E), while considering an application for renewal or conversion, could not review and nullify an earlier registration granted by the competent authority. Once registration was granted, it could be cancelled only by invoking the specific statutory power of cancellation and after complying with the prescribed procedure, including giving the trust a reasonable opportunity of being heard.
No one appeared on behalf of the trust when the appeal was taken up by the Tribunal. The matter was therefore decided after examining the record and hearing the Departmental Representative, who supported the CIT(E)’s order and contended that the original registration had been obtained by furnishing incorrect facts.
The ITAT found that the trust had admittedly come into existence on 11-07-2023. Therefore, it ought to have applied as a newly established trust under section 12A(1)(ac)(vi) instead of applying under clause (i) as though it possessed an old registration.
The Tribunal also noticed that registration had erroneously been granted from AY 2022-23, even though the trust came into existence only during the period relevant to AY 2024-25. This inconsistency should have been identified and verified by the authority while processing the original Form No. 10A.
However, the application itself appeared to have been filed within time. The error principally related to the selection of the wrong clause and the incorrect commencement year. In the Tribunal’s view, such a technical flaw could not justify treating the registration as non-existent from its inception. At the highest, the registration could have been modified so as to operate from AY 2024-25 onwards, corresponding with the trust’s actual date of formation.
The Tribunal emphasised that the initial registration granted on 14-09-2023 was still subsisting when the application in Form No. 10AB was rejected on 06-03-2026. The CIT(E) could not cancel that subsisting registration indirectly while disposing of an application for regular registration. If the authority considered cancellation necessary, it had to invoke the specific statutory provision and follow the procedure prescribed for that purpose.
Accordingly, the ITAT set aside the order of the CIT(E) and restored the matter for fresh consideration. The trust’s application was directed to be examined by treating it as an application relating to a trust formed on 11-07-2023. The CIT(E) was directed to call for the necessary documents and information, examine the genuineness of the trust’s activities and its compliance with applicable laws, grant an adequate opportunity of hearing & pass a fresh order in accordance with law. The appeal was allowed for statistical purposes.
Author’s Comments
The ruling draws an important distinction between wrong facts and a wrong statutory classification. A newly formed trust selecting clause (i) instead of clause (vi) may have made an erroneous application, but that does not automatically establish deliberate misrepresentation—particularly where its formation documents and actual date of registration were disclosed with the application.
It is equally important that the original registration was granted by the Department itself after processing Form No. 10A. If the authority later considers that registration legally defective, it must use the prescribed cancellation jurisdiction and observe natural justice. What cannot be done directly under renewal proceedings should not be accomplished indirectly by labelling the original certificate void ab initio.
The trust has not yet secured final registration. On remand, it must establish the genuineness of its objects & activities and compliance with other applicable laws. The practical principle emerging from the ruling is that procedural mistakes may be corrected, operative dates may be modified, but substantive charitable status should not be destroyed merely because the wrong box was selected in an electronic form.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, KOLKATA
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Exemption)-Kolkata [Ld. ‘CIT(E)’] passed in respect of registration u/s 12A(1)(ac)(ii) of the Income Tax Act, 1961 [the ‘Act’] dated 06.03.2026.
2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the Order in Form 10AD passed by the Ld. CIT (Exemption), Kolkata under section 12A(1)(ac) (ii) of the Income Tax Act dated 06/03/2026 is bad in law as well as on facts and hence the same be quashed and/or set aside.
2. For that the Ld. CIT (Exemption) while passing the Order is erred in law & on facts on ordering that the registration granted under Section 12A(1)(ac)(i) is void ab initio as it is obtained by submitting wrong facts, but without finding & putting on record any wrong facts allegedly submitted in spite of the fact that the entire form 10A together with all the attachments were submitted during the course of hearing. Therefore, the order was passed in violation of the principles of natural justice and hence the same be quashed and/or set aside.
3. For that the Ld. CIT(E) has grossly erred in law and exceeded jurisdiction by declaring the initial registration granted under Section 12A(1)(ac)(i) in Form 10AC (dated 14.09.2023) as “void ab initio” while processing the renewal application u/s. 12A(1)(ac)(ii) and that too without any mandate in law of ordering such Registration as void an initio.
4. As registration under Section 12AB has been granted by the competent authority after due process of law, the same cannot be reviewed, nullified or treated as invalid in collateral proceeding for renewal. Any cancellation of registration can only be done under the specific provisions of Section 12AB(4) of the Act after following due procedure and after affording reasonable opportunity of being heard.
5. For that even if there is any inadvertent error in the selection of sub-clause while filing initial application in Form 10A, the same is not fatal and cannot be a ground for rejecting the registration already granted. Judicial precedents (including cases where wrong sub-clause was cited) have consistently held that procedural or classification errors do not defeat substantive rights of a genuine charitable trust when the authority itself has granted the registration.
6. For that the Ld. CIT(E) has grossly erred in law and exceeded jurisdiction by declaring the initial registration granted under Section 12A(1)(ac)(i) in Form 10AC (dated 14.09.2023) as “void ab initio” while processing the renewal application u/s. 12A(1)(ac)(ii) and that too without any mandate in law of ordering such Registration as void an initio.
7. The Appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, including the initial registration order in Form 10AC, application in Form 10A including all the annexures, and any other documents relevant to demonstrate the validity of registration and genuineness of activities and no wrong facts being submitted.
8. The Appellant craves leave to press new, additional grounds of appeal or to modify/withdraw any of the above grounds at the time of hearing of the appeal.”
3. Brief facts of the case are that the assessee is a religious cum charitable Trust registered with the Additional District Sub-Registrar, Siliguri on 11.07.2023. It had been registered as a charitable organization under the Income Tax Act, 1961 and was granted registration u/s 12A(1)(ac)(i) of the Act on 14.09.2023 for AY 2022-23 to AY 2026-27. The assessee filed an application in Form No. 10AB seeking renewal of registration u/s 12A(1)(ac)(ii) of the Act. In order to verify the genuineness of the activities and compliance with the objects of the Trust, the Ld. CIT(E) issued several notices to the assessee via the e-filing portal and in response to which the assessee filed the replies which were verified. The assessee was asked to furnish copy of old registration granted u/s 12A/12AA of the Act prior to 01.04.2021, which was a pre-condition for obtaining registration u/s 12A(1)(ac)(i) of the Act under the new registration regime introduced by the Finance Act, 2020 and in response thereof the assessee responded with their reply “not applicable”. Therefore, another notice dated 18.02.2026 was issued to the assessee seeking certain clarification, and in response to which the assessee submitted that the Trust was newly established and registered on 11.07.2023 and since the Trust did not exist prior to 01.04.2021, it was not eligible to obtain registration u/s 12A/12AA of the Act under the earlier regime. A copy of the registration granted u/s 12A and 80G of the Act was also enclosed with the reply. The Ld. CIT(E) inferred that the assessee Trust was established after introduction of the new registration regime with effect from 01.04.2021 and it did not possess registration u/s 12A/12AA of the Act in the old regime and therefore, was not eligible for obtaining registration u/s 12A(1)(ac)(i) of the Act which is available for old Trust / charitable organization having 12A/12AA registration prior to 01.04.2021. After referring to the relevant provision, he inferred that since the assessee is a newly established Trust which came into existence on 11.07.2023, it was ineligible for obtaining registration for five years u/s 12A(1)(ac)(i) of the Act for AY 2022-23 to AY 2026-27 from the CPC in Form No. 10AC and it was glaring that it had obtained exemption u/s 12AB of the Act much before its coming into existence and thereby enjoyed the benefit of exemption unchecked and with full knowledge. According to the Ld. CIT(E), since the assessee obtained registration u/s 12AB [u/s 12A(1)(ac)(i) of the Act] by submitting wrong facts and without having old 12A/12AA registration prior to 01.04.2021, the renewal u/s 12A(1)(ac)(ii) of the Act was not allowable and since the assessee Trust had obtained registration u/s 12AB by submitting wrong facts, therefore, it was an invalid registration which was held to be void ab initio and as the approval u/s 12AB was invalid, the assessee Trust could not be granted renewal of registration u/s 12A(1)(ac)(ii) of the Act. The application of the Trust was therefore rejected.
4. Aggrieved with the order of the Ld. CIT(E), the assessee has filed the appeal before the Tribunal.
5. None appeared on behalf of the assessee and, therefore, the appeal was heard with the assistance of the Ld. DR. The Ld. DR submitted that the registration was validly cancelled and no relief is allowable to the assessee as the initial registration was obtained by submission of wrong facts. The Ld. DR argued that the order of the Ld. CIT(E) may be upheld as the assessee did not file the required evidence before him and the appeal may be dismissed.
6. We have considered a submission made and perused the facts of the case. It is a matter of fact that the assessee was registered with the Additional District Sub-Registrar, Siliguri on 11.07.2023 and registration u/s 12A(1)(ac)(i) of the Act was granted on 14.09.2023 for AY 2022-23 to AY 2026-27. Since the assessee was not in existence prior to 01.04.2021, it ought to have applied as a new entity u/s 12A(1)(ac)(vi) of the Act in place of u/s 12A(1)(ac)(i) of the Act and should also have been approved u/s 12AA of the Act. For approval u/s 12AA of the Act, all that was required by the Ld. PCIT or the Commissioner was to call for such documents or information from the Trust as he thought necessary in order to satisfy himself about the genuineness of activities of the Trust or institution and the compliance of such requirements of any other law for the time being in force by the Trust or institution as are material for the purpose of achieving its objects. The fact remains that the Trust had applied on wrong form and was granted approval for AY 2022-23 while it came into existence with effect from AY 2024-25 only. This fact ought to have been verified while granting approval u/s 12A(1)(ac)(i) of the Act but was inadvertently not done. The application appears to have been made in time, though under a wrong clause as an old Trust while the assessee was a new Trust. The Bench was of the view that for such technical flaw the registration granted at the most could have been modified as being applicable for AY 2024-25 onward and for cancellation of the registration once granted, an order u/s 12AA(4) of the Act ought to have been passed after following the procedure prescribed therein instead of cancelling the provisional registration while the assessee had sought renewal of registration.
7. Therefore, the Bench was of the view that the order of the Ld. CIT(E) may be set aside and the issue may be remanded before him. The assessee had sought registration from AY 2022-23 to AY 2026-27 which was granted on 14.09.2023 and subsequently had sought renewal of the initial registration granted. The original application for provisional registration u/s 12A of the Act was filed on Form No. 10A on 07.09.2023. The registration certificate was granted on Form No. 10AC on 14.09.2023 for AY 2022-23 to AY 2026-27 and the request for conversion from provisional to regular registration was made on Form No. 10AB filed on 25.09.2025 while the same was rejected vide order dated 06.03.2026 on Form No. 10AD. Since on the date of rejection, the initial approval granted on 14.09.2023 was subsisting, the same could not have been cancelled while rejecting the approval for regular registration. Therefore, the order of the Ld. CIT(E) is hereby set aside for framing the order afresh and the application filed may be treated as that in respect of a Trust formed on 11.07.2023 and the same ought to be considered as per the provision of section 12AA(1)(b) of the Act after following the process specified therein. Needless to say, the assessee may be granted an adequate opportunity of being heard and thereafter the order may be passed as per law.
8. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 15th September, 2026.
