The CIT(E) rejected my Form 10AB as premature because the trust had not yet started activities or received donations. Can he do that?
No — not on that ground alone. Section 12A(1)(ac)(iii) fixes only the outer date by which a provisionally registered trust must apply for regular registration; it contains no bar on applying earlier, and rejecting an application as premature because activities had not commenced by the date of filing is not in accordance with the legislative intent of that clause read with s.12AB(1)(b).
Decided by the ITAT (T.R. Senthil Kumar, Judicial Member and Makarand V. Mahadeokar, Accountant Member — ITAT Ahmedabad "C" Bench) on 2025-07-15, reported as ITA No.93/Ahd/2025. It bears on section 12AB, section 12AB(1)(b), section 12AB(1)(b)(i), section 12A(1)(ac), section 12A(1)(ac)(iii), section 11, section 12 of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
This is the mirror image of the time-bar dispute and it catches trusts that were careful rather than careless. The clause reads 'at least six months prior to expiry of the period of the provisional registration or within six months of commencement of its activities, whichever is earlier', and Commissioners have read the second limb as a condition precedent — no activities, no valid application. The Tribunal reads both limbs as outer limits only. Two things carried the case beyond the pure construction point: activities had in fact commenced by March 2024, evidenced by a Form 10BB and a return for AY 2024-25, and there was no adverse finding on genuineness or objects. The Tribunal also recorded that the CIT(E) had not issued a fresh notice after activities commenced, and had not used his power under s.12AB(1)(b)(i) to inquire into genuineness — he simply disposed of the application as non-maintainable. Note also the practical trap the trust hit: having been rejected, it could not file a fresh Form 10AB because the portal would not accept one.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The trust was registered under a trust deed on 31 May 2002. It was granted provisional registration under s.12AB in Form 10AC dated 28 February 2023, in terms of clause (vi) of s.12A(1)(ac), for AY 2023-24 to AY 2025-26. On 1 June 2023 it filed Form 10AB under section code 12A(1)(ac)(iii) seeking conversion of the provisional registration into regular registration under s.12AB(1)(b), anticipating that activities would commence in FY 2023-24. The CIT(E) issued a notice dated 4 October 2023 calling for a note on activities over the last three financial years, details of the top five donations and corresponding expenditure on objects; replies were filed on 16 and 17 October 2023. On examining the audited accounts for FY 2019-20 to FY 2022-23 the CIT(E) recorded that the trust had received no donation and incurred no expenditure on its objects and had remained dormant even during provisional registration, and by order dated 5 December 2023 rejected the application as premature and not maintainable because no activity had commenced at the date of filing. Activities in fact commenced in March 2024, within the currency of the provisional registration; the return for AY 2024-25 was filed on 29 September 2024 with Form 10BB. The trust could not file a fresh Form 10AB because of persistent errors on the e-filing portal, of which it produced screenshots and error logs. The appeal to the Tribunal was 319 days late.
Appeal allowed for statistical purposes. The delay of 319 days in filing the appeal was condoned (para 4). On the merits, rejection of the application as non-maintainable for absence of activity at the date of application is not in accordance with the legislative intent of s.12A(1)(ac)(iii) read with s.12AB(1)(b): the provision prescribes only the outer time limit and there is no prohibition against filing earlier once provisional registration is in place; where activities have since commenced, audited financials evidence that, and there is no adverse finding on genuineness or objects, rejection solely on a procedural ground is not sustainable. The order was set aside and the matter restored to the CIT(E) to adjudicate the application for regular registration afresh on the merits after considering the Form 10BB, the return and the other material evidencing commencement (paras 12, 13, 14 and 15).
The Tribunal took the language of s.12A(1)(ac)(iii) — 'at least six months prior to expiry of the period of the provisional registration or within six months of commencement of its activities, whichever is earlier' — as prescribing the last date, not the earliest. Following the Kolkata bench in Susamskar Foundation, which had set aside a rejection of a final-registration application as premature while provisional registration was still valid, and which in turn relied on Ramkrishna Mandal Institute of Education, it held there is no bar on moving the application at the earliest possible event and that it is indeed expected of the trust (paras 11 and 14). It then added two independent strands: that once activities had commenced and audited financials were on record, with no adverse finding on genuineness or objects, a rejection on a purely procedural footing could not stand (para 12); and that the CIT(E) had neither issued a fresh notice after commencement nor invoked his power under s.12AB(1)(b)(i) to inquire into genuineness and compliance, but had disposed of the application as premature and non-maintainable without adjudication on merits, an approach that frustrates the purpose of the statutory framework (para 13).
There is no prohibition against filing the application at an earlier point of time once provisional registration is in place.
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Handle my notice → Ask a CA on WhatsAppNo — not on that ground alone. Section 12A(1)(ac)(iii) fixes only the outer date by which a provisionally registered trust must apply for regular registration; it contains no bar on applying earlier, and rejecting an application as premature because activities had not commenced by the date of filing is not in accordance with the legislative intent of that clause read with s.12AB(1)(b). This was decided by the ITAT (T.R. Senthil Kumar, Judicial Member and Makarand V. Mahadeokar, Accountant Member — ITAT Ahmedabad "C" Bench) and bears on section 12AB, section 12AB(1)(b), section 12AB(1)(b)(i), section 12A(1)(ac), section 12A(1)(ac)(iii), section 11, section 12 of the Income Tax Act 1961. It is reported as ITA No.93/Ahd/2025. This is the mirror image of the time-bar dispute and it catches trusts that were careful rather than careless. The clause reads 'at least six months prior to expiry of the period of the provisional registration or within six months of commencement of its activities, whichever is earlier', and Commissioners have read the second limb as a condition precedent — no activities, no valid application. The Tribunal reads both limbs as outer limits only. Two things carried the case beyond the pure construction point: activities had in fact commenced by March 2024, evidenced by a Form 10BB and a return for AY 2024-25, and there was no adverse finding on genuineness or objects. The Tribunal also recorded that the CIT(E) had not issued a fresh notice after activities commenced, and had not used his power under s.12AB(1)(b)(i) to inquire into genuineness — he simply disposed of the application as non-maintainable. Note also the practical trap the trust hit: having been rejected, it could not file a fresh Form 10AB because the portal would not accept one. If it applies to you, the first step is this: If the rejection says 'premature' or 'non-maintainable', take the construction point first — s.12A(1)(ac)(iii) prescribes an outer limit, not a condition precedent, and there is no bar on applying at the earliest possible point once provisional registration is in place.
The trust was registered under a trust deed on 31 May 2002. It was granted provisional registration under s.12AB in Form 10AC dated 28 February 2023, in terms of clause (vi) of s.12A(1)(ac), for AY 2023-24 to AY 2025-26. On 1 June 2023 it filed Form 10AB under section code 12A(1)(ac)(iii) seeking conversion of the provisional registration into regular registration under s.12AB(1)(b), anticipating that activities would commence in FY 2023-24. The CIT(E) issued a notice dated 4 October 2023 calling for a note on activities over the last three financial years, details of the top five donations and corresponding expenditure on objects; replies were filed on 16 and 17 October 2023. On examining the audited accounts for FY 2019-20 to FY 2022-23 the CIT(E) recorded that the trust had received no donation and incurred no expenditure on its objects and had remained dormant even during provisional registration, and by order dated 5 December 2023 rejected the application as premature and not maintainable because no activity had commenced at the date of filing. Activities in fact commenced in March 2024, within the currency of the provisional registration; the return for AY 2024-25 was filed on 29 September 2024 with Form 10BB. The trust could not file a fresh Form 10AB because of persistent errors on the e-filing portal, of which it produced screenshots and error logs. The appeal to the Tribunal was 319 days late. The matter was decided on 2025-07-15 by the ITAT (T.R. Senthil Kumar, Judicial Member and Makarand V. Mahadeokar, Accountant Member — ITAT Ahmedabad "C" Bench). On those facts the ITAT held as follows. Appeal allowed for statistical purposes. The delay of 319 days in filing the appeal was condoned (para 4). On the merits, rejection of the application as non-maintainable for absence of activity at the date of application is not in accordance with the legislative intent of s.12A(1)(ac)(iii) read with s.12AB(1)(b): the provision prescribes only the outer time limit and there is no prohibition against filing earlier once provisional registration is in place; where activities have since commenced, audited financials evidence that, and there is no adverse finding on genuineness or objects, rejection solely on a procedural ground is not sustainable. The order was set aside and the matter restored to the CIT(E) to adjudicate the application for regular registration afresh on the merits after considering the Form 10BB, the return and the other material evidencing commencement (paras 12, 13, 14 and 15).
The Tribunal took the language of s.12A(1)(ac)(iii) — 'at least six months prior to expiry of the period of the provisional registration or within six months of commencement of its activities, whichever is earlier' — as prescribing the last date, not the earliest. Following the Kolkata bench in Susamskar Foundation, which had set aside a rejection of a final-registration application as premature while provisional registration was still valid, and which in turn relied on Ramkrishna Mandal Institute of Education, it held there is no bar on moving the application at the earliest possible event and that it is indeed expected of the trust (paras 11 and 14). It then added two independent strands: that once activities had commenced and audited financials were on record, with no adverse finding on genuineness or objects, a rejection on a purely procedural footing could not stand (para 12); and that the CIT(E) had neither issued a fresh notice after commencement nor invoked his power under s.12AB(1)(b)(i) to inquire into genuineness and compliance, but had disposed of the application as premature and non-maintainable without adjudication on merits, an approach that frustrates the purpose of the statutory framework (para 13). In the words reproduced by the source cited on this page: "There is no prohibition against filing the application at an earlier point of time once provisional registration is in place." The decision followed or applied Susamskar Foundation v. CIT (Exemption), ITA No.1113/KOL/2023, order dated 06.03.2024 (ITAT Kolkata) — followed as a binding coordinate bench decision; Ramkrishna Mandal Institute of Education v. CIT (Exemption), ITA No.924/KOL/2023, order dated 20.02.2024 (ITAT Kolkata) — relied on within the Susamskar extract.
It was decided by the ITAT on 2025-07-15 and is reported as ITA No.93/Ahd/2025. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 12AB, section 12AB(1)(b), section 12AB(1)(b)(i), section 12A(1)(ac), section 12A(1)(ac)(iii), section 11, section 12, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Appeal allowed for statistical purposes. The delay of 319 days in filing the appeal was condoned (para 4). On the merits, rejection of the application as non-maintainable for absence of activity at the date of application is not in accordance with the legislative intent of s.12A(1)(ac)(iii) read with s.12AB(1)(b): the provision prescribes only the outer time limit and there is no prohibition against filing earlier once provisional registration is in place; where activities have since commenced, audited financials evidence that, and there is no adverse finding on genuineness or objects, rejection solely on a procedural ground is not sustainable. The order was set aside and the matter restored to the CIT(E) to adjudicate the application for regular registration afresh on the merits after considering the Form 10BB, the return and the other material evidencing commencement (paras 12, 13, 14 and 15). It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 12AB, section 12AB(1)(b), section 12AB(1)(b)(i), section 12A(1)(ac), section 12A(1)(ac)(iii), section 11, section 12 of the Income Tax Act 1961, and was decided by T.R. Senthil Kumar, Judicial Member and Makarand V. Mahadeokar, Accountant Member — ITAT Ahmedabad "C" Bench. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Put on record whatever now evidences that activities have commenced — audit report in Form 10BB or 10B, the return for the relevant year, activity reports and receipts — even if it post-dates the application; that is what turned this case. Record every failed attempt to file a fresh Form 10AB on the portal with screenshots and error logs, and file them; the Tribunal treated the uncontroverted portal failures as material. Point out any failure by the CIT(E) to issue a fresh notice or to make the inquiry contemplated by s.12AB(1)(b)(i) into genuineness of activities and compliance with other laws — disposal as non-maintainable without such inquiry was held to frustrate the statutory scheme. If the appeal to the Tribunal is late because you were trying to re-file, support the condonation with a notarised affidavit from a trustee setting out the chronology; a delay of 319 days was condoned on that footing here.
Searched for later treatment; none was found. That is not the same as a source affirming it. The citator returns nothing and a case-name search returns three documents, only one of which is this order. No Bench has followed or doubted the holding that a Form 10AB application is not premature merely because activities have not commenced, and no appeal to the Gujarat High Court was traced. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order runs to fifteen numbered paragraphs, continuous, which I established by transcribing the whole of it. Paragraph 11 reproduces the Kolkata bench order in Susamskar Foundation v CIT(E) (ITA No.1113/KOL/2023, 6 March 2024), which itself reproduces Ramkrishna Mandal Institute of Education (ITA No.924/KOL/2023, 20 February 2024): the numbers 3, 7, 8 and 10 that appear inside that extract belong to those orders and are not paragraphs of this one. Inside the Ramkrishna extract the statutory text of s.12A(1)(ac)(iii) is quoted in a form that predates the current provision, and one sentence of that extract ("the application must be made before the expiry of six months from the date of expiry of final registration") does not read coherently — it is reproduced as it stands in the report and should not be relied on as a statement of law. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Appeal allowed for statistical purposes. The delay of 319 days in filing the appeal was condoned (para 4). On the merits, rejection of the application as non-maintainable for absence of activity at the date of application is not in accordance with the legislative intent of s.12A(1)(ac)(iii) read with s.12AB(1)(b): the provision prescribes only the outer time limit and there is no prohibition against filing earlier once provisional registration is in place; where activities have since commenced, audited financials evidence that, and there is no adverse finding on genuineness or objects, rejection solely on a procedural ground is not sustainable. The order was set aside and the matter restored to the CIT(E) to adjudicate the application for regular registration afresh on the merits after considering the Form 10BB, the return and the other material evidencing commencement (paras 12, 13, 14 and 15).
TaxSphere, “MAA Sharda Kothari Foundation v CIT (Exemption), Ahmedabad”, https://taxnotice.vittsphere.com/caselaw/case/maa-sharda-kothari-form-10ab-not-premature-non-commencement/ (validity last checked 2026-09-08)
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