CIT (Exemptions) Vs Indira Trust (ITAT Kolkata)
Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that provisional registration granted under Section 12A of the Income Tax Act, 1961, should be considered as final for trusts registered before April 1, 2021. The case, CIT (Exemptions) vs Indira Trust, arose when the assessee, an already registered charitable trust, applied for final registration, believing its existing registration to be provisional. The CIT (Exemptions) rejected the application, leading to an appeal before ITAT. The Tribunal initially ruled in favor of the assessee, directing the CIT (Exemptions) to reconsider the application. However, the Revenue later moved a Miscellaneous Application, arguing that the Tribunal’s order contained an apparent mistake, as the trust’s registration was already final.
The ITAT acknowledged that both the assessee and the CIT (Exemptions) had misinterpreted the provisions of Section 12A. The confusion arose from Form 10AC, issued to the trust on April 6, 2022, which mistakenly labeled the registration as provisional. The Tribunal referred to CBDT Circular No. 11 of 2022, which clarified that registrations granted to existing trusts should be deemed final, even if mistakenly categorized as provisional due to technical errors. Consequently, ITAT ruled that there was no requirement for the trust to reapply for final registration and recalled its earlier order, allowing the Revenue’s application.
