Section 12A(1)(ac)

Section 12A(1)(ac) — the law in short

What the courts have decided on section 12A(1)(ac), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Advaya Charitable Foundation v CIT (Exemptions), Mumbai ITATHelps taxpayerNo later treatment found
  My Form 10AB for final registration under s.12AB was rejected as time-barred because I missed the 30 June 2024 date in Circular 7/2024. Is anything left to me?
  Yes. From 1 October 2024 a proviso to s.12A(1)(ac) lets the Principal Commissioner or Commissioner condone a delay in filing the application where he considers there is reasonable cause, and the Tribunal restored the matter to the CIT(E) with liberty to the trust to make a condonation application. The delay itself was not in dispute; what saved the trust was that the rejection order recorded no defect in its objects, its activities or its documents, its bona fides were not questioned, and the delay did not prima facie appear deliberate.
• Care and Share Charitable Trust v CIT (Exemptions), Chennai ITATHelps taxpayerNo later treatment found
  My Form 10AB for final approval under s.80G was rejected for a delay of two days and the CIT(E) says he has no power to condone it for 80G. Is that right, and is there a way round?
  The CIT(E) is right that s.80G carries no condonation power — the proviso inserted in 2024 permitting condonation sits in s.12A(1)(ac) and governs registration, not 80G approval. The way round is clause (iv)(B) of the first proviso to s.80G(5) — a clause that is older than the 2024 amendment and was not inserted by it, but which the Finance (No. 2) Act 2024 opened up with effect from 1 October 2024 by omitting the words that had confined item (B) to an institution no part of whose income had been excluded under sub-clause (iv), (v), (vi) or (via) of s.10(23C) or under s.11 or s.12 for any previous year ending on or before the date of application — so that an institution whose activities have commenced may now apply at any time after commencement; the Tribunal directed the CIT(E) to treat the out-of-time clause (iii) application as one made under clause (iv)(B) and to decide it on the merits.
• Lakulish Sanatan Sanskriti Prabodhan Abhiyan v CIT (Exemption), Ahmedabad ITATHelps taxpayerNo later treatment found
  I did not file the Rule 17A documents in time and the CIT(E) rejected my Form 10AB, cancelled the provisional registration and directed computation of tax under s.115TD. Can a rejection for non-filing carry all that?
  Not without an inquiry into the merits. The Tribunal set the order aside and restored the matter for de novo consideration, holding that the CIT(E) had rejected the application solely for non-filing of documents, after only two notices at very short intervals, without any verification or inquiry, and that procedural lapses alone should not result in denial of substantial justice. It did not decide the s.115TD point, which was raised only in argument.
• MAA Sharda Kothari Foundation v CIT (Exemption), Ahmedabad ITATHelps taxpayerNo later treatment found
  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).
• Statutory position — s.12AB registration periods, the Finance Act 2025 ten-year proviso for small trusts, and the Finance (No. 2) Act 2024 power to condone a late application CBDT Circulars & InstructionsCuts both ways
  How long does registration under s.12AB now run, is the ten-year period for small trusts real, and is there still any way to save a late Form 10A or Form 10AB?
  Registration under s.12AB(1)(a) and under s.12AB(1)(b)(ii)(A) runs five years; provisional registration under s.12AB(1)(c) runs three years from the assessment year for which registration is sought. The ten-year period is real but narrower than it is usually described: a proviso to s.12AB(1) inserted by the Finance Act 2025 (Act No. 7 of 2025) with effect from 1 April 2025 substitutes ten years for five where the application is under sub-clauses (i) to (v) of s.12A(1)(ac) and the total income of the trust, without giving effect to ss.11 and 12, did not exceed rupees five crores in each of the two previous years preceding the previous year in which the application is made — it does not lengthen the three-year provisional registration under clause (c). Separately, a proviso to s.12A(1)(ac) inserted by Act No. 15 of 2024 with effect from 1 October 2024 empowers the Principal Commissioner or Commissioner to condone a delay in filing where he considers there is a reasonable cause, and the application is then deemed to have been filed within time.
• Statutory position — section 115TD: the exit tax on accreted income, and the Finance Act 2022 extension to a mere failure to re-apply in time CBDT Circulars & InstructionsCuts both waysNo later treatment found
  We simply missed the deadline for the fresh application under s.12A(1)(ac). We have not been cancelled and nobody has rejected anything. Can the exit tax under s.115TD really apply to us?
  Yes. Since the Finance Act 2022, s.115TD(3)(iii) deems a specified person to have been converted into a form not eligible for registration where it simply fails to make the application required by s.12A(1)(ac)(i), (ii) or (iii), or by the corresponding clauses of the first proviso to s.10(23C), within the period specified, where that period expires in the previous year. The consequence is tax on accreted income at the maximum marginal rate, payable within fourteen days of the end of that previous year, in addition to any income tax otherwise chargeable, with no credit and no deduction against it.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.