CIT can’t grant provisional registration if trust had applied for regular registration: ITAT

Case Details: Saifee Burhani Upliftment Trust v. CIT(Exemptions) - [2022] 138 taxmann.com 322 (Mumbai-Trib.)

Judiciary and Counsel Details

• • Sandeep Singh Karhail, Judicial Member & Shamim Yahya, Accountant Member
  • Tanzil Padvekar for the Appellant.
  • B.K. Bagchi, Sr. AR for the Respondent.

Facts of the Case

The assessee was a Public Charitable Trust registered under the Bombay Public Trust Act. It had been granted registration under section 12AA vide order dated 30-10-2009.

The assessee made an application in Form 10A for registration as per section 12A(1)(ac)(i). However, the DIT (CPC) had granted Provisional Registration in Form 10C to the assessee subject to certain conditions. Aggrieved-assessee filed the instant appeal before the Tribunal.

ITAT Held

The Mumbai Tribunal held that to claim the benefit under sections 11 and 12, a trust or institution has to make an application for registration, and such trust or institution should be registered under section 12AB.

Section 12A(1)(ac)(i) specifically deals with the cases where a trust or institution was registered under section 12A or section 12AA. Further, section 12AB deals with the procedure for fresh registration.

The assessee was duly registered under section 12AA. Thus, the only provision applicable to the assessee to apply for registration is section 12A(1)(ac)(i). Further, section 12AB(1)(a) provides that where an application is made under section 12A(1)(ac)(i), the Principal Commissioner or Commissioner shall pass an order in writing registering the trust or institution for 5 years.

However, in the instant case, the assessee was granted Provisional Registration in Form 10AC subject to certain conditions.

It should be noted that section 12AB(1)(c) deals with granting of Provisional Registration for 3 years from the assessment year from which registration is sought. However, the said section is applicable in cases where an application is made under section 12A(1)(ac)(iv), i.e., applicable made by charitable institutions which are yet to start their activities.

In the instant case, the assessee was already holding a certificate issued under section 12AA and accordingly, Section 12AB(1)(a), which deals with the grant of Regular Registration for a period of 5 years, does not authorize the Principal Commissioner or Commissioner to impose any conditions for grant of such registration.

Thus, the designated authority was directed to de novo consider the application of the assessee and grant the registration as per law.