Renewal of Section 12AB registration cannot be rejected merely for citing an incorrect sub-clause when valid registration exists.

ORDER

1. The aforesaid appeal has been filed by the assessee against the impugned order dated 14.03.2026 passed by the Ld. Commissioner of Income Tax (Exemption), Jaipur [“Ld. CIT(E)”], whereby the assessee’s application dated 27.09.2025 filed in Form No. 10AB for renewal of registration under section 12AB of the Income-tax Act, 1961 has been rejected.

2. The sole controversy arising in the present appeal is whether the Ld. CIT(E) was justified in rejecting the application on the ground that the assessee was not registered under section 12A/12AA prior to 01.04.2021 and, therefore, according to him, it could not have applied under clause (ii) of section 12A(1)(ac).

3. The relevant facts emerging from the record are that the assessee-trust was established on 11.10.2018 and is engaged in religious-cum-charitable activities. Its objects, inter alia, encompass religious purposes, relief of the poor, education, medical relief and advancement of objects of general public utility. The assessee was subsequently registered under the Rajasthan Public Trust Act, 1959 on 08.07.2025.

4. With the introduction of the new regime of registration of charitable institutions, the assessee applied for provisional registration and was granted the same vide Form No. 10AC dated 27.05.2021, specifically under section 12A(1)(ac)(vi), for Assessment Years 2021-22 to 2023-24. Thus, there is no dispute that the assessee entered the new registration regime as a new trust and was validly granted provisional registration by the Department.

5. Thereafter, the assessee filed an application in Form No. 10A on 25.11.2022 for regular registration. While making such application, clause (i) of section 12A(1)(ac) came to be selected. The Department accepted the application and, after considering the material available on record, granted regular registration vide Form No. 10AC dated 02.12.2022, specifically recording the registration under sub-clause (i) of clause (ac) of section 12A(1). The registration was granted for Assessment Years 2022-23 to 2026-27. Thus, as on the date relevant for the present proceedings, a valid and subsisting order of registration dated 02.12.2022 was admittedly operating in favour of the assessee.

6. Since the aforesaid regular registration was due to expire, the assessee filed the present application on 27.09.2025 in Form No. 10AB under section 12A(1)(ac)(ii) seeking renewal of the existing registration. During the proceedings, the Ld. CIT(E) called upon the assessee to furnish its registration under section 12A/12AA prior to 01.04.2021, on the premise that the registration dated 02.12.2022 had been granted under clause (i) and that clause (i) contemplated an institution already registered under the erstwhile regime.

7. The assessee explained before the Ld. CIT(E) that it had never claimed to have been registered under section 12A/12AA prior to 01.04.2021. It was a new applicant under the new regime and had initially been granted provisional registration under section 12A(1)(ac)(vi) on 27.05.2021. Thereafter, while applying for regular registration, clause (i) was inadvertently selected on the efiling portal instead of clause (iii), which was applicable to an institution converting its provisional registration into regular registration. However, notwithstanding such selection, the Department itself examined and accepted the application and granted regular registration on 02.12.2022, which continued to remain valid and subsisting.

8. The Ld. CIT(E), however, was not persuaded by the aforesaid explanation. He observed that since the assessee did not possess registration under section 12A/12AA prior to 01.04.2021, it could not have been granted registration under clause (i). He further observed that the assessee was not registered under clause (i) or (iii) of what has been described in the impugned order as the “first proviso to section 12A(1)(ac)(ii)” and consequently held Form No. 10AB to be deficient. On this reasoning, the application dated 27.09.2025 was rejected.

9. Before us, the learned counsel submitted that the entire premise adopted by the Ld. CIT(E) is factually as well as legally misconceived. The assessee had admittedly been granted provisional registration on 27.05.2021 and thereafter regular registration on 02.12.2022. The latter registration was never cancelled or withdrawn and was valid up to Assessment Year 2026-27. Therefore, when the assessee filed Form No. 10AB on 27.09.2025, it was an institution holding a valid registration whose period was due to expire, and hence the application for renewal under section 12A(1)(ac)(ii) was the appropriate application.

10. It was further submitted that even assuming that the assessee had selected an incorrect clause while filing its earlier application in the year 2022, the Department having itself granted regular registration thereon, such subsisting registration could not simply be ignored while deciding the subsequent application for renewal. Reliance was also placed upon the decision of the Ahmedabad Bench of the Tribunal in Sainath Education Charitable Trust v. CIT(Exemption) 214 ITD 465 (Ahmedabad – Trib.), for the proposition that an application should not be rejected merely because an incorrect sub-clause has been selected when the substantive entitlement and the nature of application are otherwise apparent from the record.

11. We have heard the parties and carefully perused the material placed on record. In our opinion, the impugned order proceeds on a fundamental misconception of the factual position. There is no dispute that the assessee was granted provisional registration under section 12A(1)(ac)(vi) on 27.05.2021. Equally, there is no dispute that thereafter an order granting regular registration was passed by the Department on 02.12.2022 and such registration was operative for Assessment Years 2022-23 to 2026-27. The existence and validity of this registration on the date of filing the present application cannot be wished away merely because the earlier application may have mentioned an incorrect subclause.

12. Section 12A(1)(ac)(ii), in substance, contemplates an application by a trust or institution which is already registered under section 12AB and whose period of registration is due to expire. On the date when the assessee filed Form No. 10AB, i.e., 27.09.2025, it indisputably possessed the registration granted on 02.12.2022, which was due to expire. Therefore, for the purpose of renewal, the assessee had rightly applied under clause (ii). The antecedent question as to whether, at the time of obtaining regular registration in 2022, the assessee ought to have applied under clause (iii) instead of clause (i), cannot render the subsequent application under clause (ii) defective so long as the registration granted by the competent authority on 02.12.2022 continues to remain valid and operative.

13. There is another significant aspect. The Ld. CIT(E) appears to have proceeded on the basis that the assessee ought to establish registration under section 12A/12AA prior to 01.04.2021 because its regular registration dated 02.12.2022 was granted under clause (i). However, the record itself demonstrates that the assessee’s first registration under the new regime was the provisional registration granted on 27.05.2021 under clause (vi). Thus, the absence of any registration prior to 01.04.2021 was neither concealed nor disputed by the assessee. In fact, it was entirely consistent with the history of its registration appearing from the Department’s own record.

14. If the selection of clause (i) in the application filed on 25.11.2022 was erroneous and clause (iii) ought properly to have been selected, that was an error in the earlier application which culminated in an order of registration passed by the Department itself. Such an error cannot, by itself, obliterate the legal existence of the registration subsequently granted. Unless that order is withdrawn or cancelled in accordance with the procedure prescribed under law, it continues to operate and carries its legal consequences. A subsisting statutory registration cannot be treated as non-existent collaterally while adjudicating an application for its renewal.

15. We also find the reference in the impugned order to the assessee not being registered under “clause (i) or (iii) of first proviso to section 12A(1)(ac)(ii)” to be misplaced. Clauses (i), (ii), (iii), etc., are themselves distinct situations contemplated under section 12A(1)(ac). Once the assessee had been granted provisional registration under clause (vi), followed by regular registration by an express order of the Department, the real enquiry in the present proceedings was whether the assessee, being an existing registered trust whose registration was due to expire, had filed the renewal application within the framework of clause (ii). On the admitted facts, the answer is clearly in the affirmative.

16. The decision relied upon by the learned counsel in Sainath Education Charitable Trust (supra) also supports the proposition that the statutory scheme under section 12A(1)(ac) prescribes different sub-clauses corresponding to different factual situations and a bona fide selection of an incorrect sub-clause should not defeat the substantive claim for registration where the correct nature of the application is otherwise evident. Here, the case of the assessee stands on an even stronger footing because regular registration had actually been granted by the Department and was subsisting when renewal was sought.

17. We further notice that the Ld. CIT(E) has not rejected the application on any adverse finding regarding the charitable or religious objects of the assessee, genuineness of its activities or any violation of the conditions governing registration. The rejection rests entirely upon the perceived defect relating to the clause under which the earlier registration had been obtained. Once that premise is found to be unsustainable for the reasons discussed above, there remains no substantive ground in the impugned order for declining renewal.

18. In these circumstances, we hold that the assessee, having a valid and subsisting registration granted vide order dated 02.12.2022 for Assessment Years 2022-23 to 2026-27, had correctly filed its application dated 27.09.2025 in Form No. 10AB under section 12A(1)(ac)(ii) for renewal of registration. The finding of the Ld. CIT(E) that the said application was deficient merely because the assessee did not possess registration under section 12A/12AA prior to 01.04.2021 is, therefore, factually misconceived and legally untenable.

19. Accordingly, the impugned order dated 14.03.2026 is set aside and the Ld. CIT(E) is directed to grant registration to the assessee under section 12AB in accordance with law for the applicable period. The observations in the impugned order founded upon the assessee’s non-registration under section 12A/12AA prior to 01.04.2021 shall not constitute any impediment in giving effect to this direction.

20. In the result, the appeal of the assessee is allowed.