Sec. 12A 80G application rejected by CIT Exemption in March 2026, now what option under New Income Tax Rules 2026?
Renewal application for continuation of registration or approval U/s. 12A and 80G of Income Tax Act, 1961 were due and applied in the month of Sept. 2025, which were to be approved/granted renewal upto March 2026. May be possible some of such applications might have been rejected.
Presently under Income Tax Act, 1961 such applicants have only option to file appeal before Honourable ITAT or file a writ petition before Honourable High Court.
Under New Income Tax Act, 2025 read with New Income Tax Rules, 2026 there is a welcome provision introduced under Rule 181(12) that:- if any application for renewal of registration or approval filed in form No. 105 is rejected by way of order in form No. 107, then within one month the applicant can reapply. Rule 181(12) states as under:-
Where an order in Form No. 107 (herein referred to as the earlier order) has been issued by rejecting the application or cancelling the registration or approval or both, the applicant may re-apply in Form No. 105 within one month from the end of the month in which said order is passed, if the following conditions are satisfied: —
(a) such rejection or cancellation is on account of —
(i) failure of the applicant to provide all or any of the documents or information as sought by the Principal Commissioner or Commissioner under section 332(7); or
(ii) not availing an opportunity of being heard; or
(iii) ineligibility of the applicant on account of certain terms contained in the trust deed;
(b) the applicant has provided the reasons for —
(i) the failure to provide necessary information or documents; or
(ii) not availing the opportunity to be heard; or
(iii) ineligibility of the applicant on account of certain terms contained in the trust deed which has been modified on or before the date of re-application; and
(c) the applicant gives an undertaking that he —
(i) has not made any appeal against the earlier order or has withdrawn the appeal filed before any appellate authority against such order; and
(ii) shall not file any appeal before any appellate authority against the earlier order.
Ruel 181(15) Where the applicant notices that the application in the Form No. 105 has been made by furnishing an erroneous section code or erroneous nature of activity as specified in the said Form, —
(a) the applicant may furnish a request for correction before the Principal Commissioner or the Commissioner, at any time before passing of the order in Form No. 107; and
(b) the Principal Commissioner or the Commissioner on receipt of such request, may allow such correction.
From the reading of above Rule 181(12) to 181(15), it is a welcome step in new Income Tax Rules 2026 that for reducing litigation, for ease of compliance and for reducing unintended tax burden due to cancellation or rejection of registration applications, above relief measures have been provided that applicant can reapply within one month or rectify certain errors also before passing of order in form No.107.
Can 12A 80G 1961 Act applications rejected in March 2026 be eligible to reapply within one month, as per new Rule 181?
Yes, The intent of new Income Tax Act 2025 and New Income Tax Rules 1962 is to reduce disputes and litigation, consolidating existing law, maintain continuity in taxation principles and introducing tax reforms without any structural or policy change.
Under Repeal and Savings Sec. 536 of new Income Tax Act, 2025 in Sec. 536(j) it is stated, “any agreement entered into, appointment made, approval given,
recognition granted, circular, direction, instruction, notification, order or rule issued under any provision of the repealed Income-tax Act shall, so far as it is not inconsistent with the corresponding provisions of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision of this Act and shall continue in force accordingly”.
From the above Sec. 536(j) it is clear that Sec. 12A(1)(ac) and Sec. 12AB is similar to Sec. 332, therefore new rule 181(12) for reapply, can surely be applied for any application rejected in the month of March 2026.
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