CIT(E) Must Grant Section 12AA Registration for Pre-Amendment Application and Restore Exemption Benefits

By | September 2, 2026
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CIT(E) Must Grant Section 12AA Registration for Pre-Amendment Application and Restore Exemption Benefits
Issue
Whether a registration application validly filed under Section 12AA prior to statutory amendments can be arbitrarily converted by the CIT(E) into a limited-period Section 12AB registration upon remand, and consequently, whether exemption under Sections 11 and 12 can be denied for AY 2018-19 for lack of Section 12AA registration.
Facts
  • Application for Registration: The assessee filed Form No. 10A on September 25, 2020, seeking registration as a charitable trust under Section 12AA of the Income-tax Act, 1961.
  • Initial Rejection and Remand: The CIT(E) initially rejected the application. Upon appeal, the ITAT set aside the order and restored the matter to the CIT(E) for fresh adjudication on merits.
  • Flawed Grant under Section 12AB: Upon reconsideration, the CIT(E) accepted the assessee’s eligibility for registration but granted it under Section 12AB (treating it as if filed under Form No. 10AB) for a restricted duration (September 25, 2020 to March 31, 2021).
  • Denial of Exemption for AY 2018-19: The assessee’s return of income for AY 2018-19 was processed under Section 143(1), denying exemption under Sections 11 and 12 on the sole ground that the trust lacked valid Section 12AA registration. The Addl./JCIT(A) upheld this denial.
Decision
  • Governing Statutory Regime: Once the CIT(E) was satisfied of the assessee’s eligibility upon remand, registration had to be granted under Section 12AA—the statutory regime governing the original application.
  • No Retrospective Conversion: Subsequent enactment of Section 12AB cannot recharacterize or convert a valid application previously filed under Section 12AA into an application under Section 12AB.
  • Directives to Authorities: The CIT(E) is directed to issue registration under Section 12AA pursuant to the original Form No. 10A dated September 25, 2020.
  • Remand for AY 2018-19: The order denying exemption under Sections 11 and 12 for AY 2018-19 is set aside, and the matter is restored to the Assessing Officer to grant consequential exemption benefits post-Section 12AA registration.
Key Takeaways
  • Vested Statutory Rights: Procedural amendments introduced under Section 12AB cannot retroactively alter or invalidate pending applications validly made under Section 12AA.
  • Scope of Tribunal Remand: Reconsideration pursuant to ITAT directions obligates the revenue authority to adjudicate rights under the law prevailing at the time of application, rather than applying subsequent restrictive provisions.
  • Consequential Tax Relief: Once Section 12AA registration is restored to its proper effective date, assessment orders denying Section 11 and 12 exemptions for prior relevant years must be reassessed to grant full statutory relief.
IN THE ITAT JODHPUR BENCH
Jogniya Mata Shaktipith Vikas Sansthan
v.
Income Tax Officer
Amit Shukla, Judicial Member
and Girish Agrawal, Accountant Member
IT Appeal Nos. 969 (Jodh.) of 2025 and 1059 (Jodh.) of 2026
[Assessment years 2018-19 and 2025-26]
AUGUST  14, 2026
Mahendra Gargieya, Adv. for the Appellant. O.P. Meena, CIT-DR for the Respondent.
ORDER
1. These two appeals of the assessee, Shri Jogniya Mata Shaktipith Prabandh Avm Vikas Sansthan, though arising from different orders, are intrinsically connected. ITA No. 1059/Jodh/2026 arises from the order dated 27.02.2026 passed by the learned Commissioner of Income-tax (Exemption), Jaipur [“Ld. CIT(E)”] pursuant to the directions of this Tribunal in an earlier round, whereas ITA No. 969/Jodh/2025 arises from the order dated 17.09.2025 passed by the learned Addl./JCIT(A)-1, Chennai, in relation to the adjustment under section 143(1) for A.Y. 2018-19. Since the outcome of the latter appeal is consequential upon the issue of registration involved in the former, both the appeals were heard together and are being disposed of by this consolidated order.
2. We first take up ITA No. 1059/Jodh/2026. The relevant facts are that the assessee had originally filed an application in Form No. 10A on 25.09.2020 seeking registration under the erstwhile section 12AA of the Income-tax Act, 1961. The said application was rejected by the Ld. CIT(E) vide order dated 17.06.2021. Against the said rejection, the assessee approached this Tribunal and the Tribunal, vide order dated 03.11.2022 in Shri Jogniya Mata Shaktipith v. CIR (E) [IT Appeal No. 38 (Jodh.) of 2022], restored the matter to the file of the Ld. CIT(E) for adjudication afresh on merits after providing another opportunity to the assessee.
3. Pursuant to the aforesaid direction of the Tribunal, the Ld. CIT(E) passed the impugned order dated 27.02.2026. While accepting the assessee’s entitlement to registration, the Ld. CIT(E), however, proceeded on the premise that the assessee had filed an application in Form No. 10AB under section 12AB and consequently granted registration under section 12AB with effect from 25.09.2020 to 31.03.2021.
4. Before us, the Ld. Counsel submitted that the very foundation on which the impugned order has proceeded is factually incorrect. The assessee had never filed Form No. 10AB under section 12AB in the original proceedings. Its application was filed on 25.09.2020 in Form No. 10A under the then existing provisions of section 12AA, i.e., prior to the coming into force of the new registration regime under section 12AB. The rejection of that very application had travelled before the Tribunal and what was restored by the Tribunal was the assessee’s original application under section 12AA. Therefore, while giving effect to the Tribunal’s order, the Ld. CIT(E) could not have altered the character of the original application and treated it as one filed under section 12AB.
5. We have considered the submissions and perused the material placed before us. The factual position is quite manifest from the record. The assessee’s application was filed on 25.09.2020 in Form No. 10A seeking registration under section 12AA. It was this application which was rejected, which thereafter became the subject matter of appeal before the Tribunal and which was ultimately restored to the Ld. CIT(E) for fresh adjudication. Thus, the proceedings before the Ld. CIT(E) pursuant to the Tribunal’s order dated 03.11.2022 were nothing but a continuation of the original proceedings emanating from the application dated 25.09.2020. The statutory character of such application could not change merely because the consequential order pursuant to the remand came to be passed at a later point of time.
6. Once the Ld. CIT(E), upon reconsideration pursuant to the direction of the Tribunal, was satisfied that the assessee was entitled to registration, such registration had to be granted under the statutory regime which governed the assessee’s original application. The subsequent introduction of section 12AB cannot convert an application validly filed under the then prevailing section 12AA into an application under section 12AB. The reference in the impugned order to Form No. 10AB and the grant of registration under section 12AB for a limited period from 25.09.2020 to 31.03.2021, therefore, do not accord with the factual genesis of the proceedings or with the direction given by the Tribunal in the first round.
7. Accordingly, we modify the impugned order and direct the Ld. CIT(E), Jaipur to grant registration to the assessee under section 12AA, pursuant to its original application in Form No. 10A dated 25.09.2020, instead of registration under section 12AB as mentioned in the impugned order dated 27.02.2026. The registration shall carry all consequences which flow from registration under the erstwhile provisions of section 12AA in accordance with law. Thus, ITA No. 1059/Jodh/2026 is allowed.
8. We now take up ITA No. 969/Jodh/2025 for A.Y. 2018-19. The assessee had filed its return of income for the relevant assessment year on 31.08.2018 declaring total income of Rs. 5,06,614. The return was processed under section 143(1) on 16.12.2019 and the benefit claimed under sections 11 and 12 was denied. The assessee carried the matter in appeal. The learned Addl./JCIT(A)-1, Chennai, vide impugned order dated 17.09.2025, dismissed the appeal essentially on the ground that, during A.Y. 2018-19, the assessee did not possess registration under section 12AA and, therefore, the CPC was justified in denying exemption under sections 11 and 12.
9. Before us, the Ld. Counsel submitted that the very basis on which the learned first appellate authority dismissed the appeal now stands materially altered. He pointed out that the assessee’s application for registration under section 12AA had been restored by this Tribunal to the Ld. CIT(E), and pursuant thereto the Ld. CIT(E) has already accepted the assessee’s eligibility for registration. The only error in the consequential order dated 27.02.2026 was that registration was granted under section 12AB instead of section 12AA, which issue has now been adjudicated by us in ITA No. 1059/Jodh/2026 hereinabove. Therefore, consequential effect of the registration under section 12AA is required to be examined for A.Y. 2018-19 also in accordance with the provisions of the Act.
10. We find substance in the aforesaid contention. The sole basis for denial of exemption by the learned Addl./JCIT(A) was the absence of registration under section 12AA. In the preceding paragraphs, we have already directed the Ld. CIT(E) to grant registration under section 12AA pursuant to the assessee’s original application. Therefore, the taxability of the assessee for A.Y. 2018-19 and its claim for exemption under sections 11 and 12 can no longer be adjudicated by proceeding on the premise that the assessee has not been granted registration under section 12AA.
11. Accordingly, the impugned order dated 17.09.2025 in ITA No. 969/Jodh/2025 is set aside and the matter is restored to the file of the Jurisdictional Assessing Officer for giving consequential effect to the registration under section 12AA which shall be granted by the Ld. CIT(E) in pursuance of our direction in ITA No. 1059/Jodh/2026. Upon issuance of the registration certificate under section 12AA, the Assessing Officer shall examine the assessee’s claim for exemption under sections 11 and 12 for A.Y. 2018-19 and give the consequential benefit thereof to the extent permissible under the provisions of the Act, after verification of the relevant conditions and in accordance with law. Due opportunity shall be afforded to the assessee.
12. Thus, ITA No. 969/Jodh/2025 is allowed for statistical purposes, whereas ITA No. 1059/Jodh/2026 is allowed.
13. In the result, both the appeals are disposed of in the terms indicated above.