Trust gets section 12AB registration from 2021-22 after PCIT wrongly denied coverage for that year

ITAT Chennai allowed the appeal and directed PCIT/CIT to grant registration under section 12AB from assessment year 2021-22 onwards. The assessee trust, previously registered under section 12AA, filed fresh application in Form 10A within due date following TOLA 2020 amendments. PCIT/CIT incorrectly granted registration only from 2022-23 to 2026-27, denying 2021-22 coverage without justification. The tribunal found CPC's denial of section 11 benefits was incorrect since assessee couldn't file registration details due to unavailability of fresh registration. Matter remitted back to PCIT/CIT for proper registration grant from 2021-22.

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Issues:
Delay in filing the appeal before the Tribunal, Registration under section 12AB of the Income Tax Act, 1961, Grant of registration from assessment year 2021-22, Compliance with statutory provisions, Interpretation of sections 12A(1)(ac) and 12AB, Correctness of the order passed by the ld. PCIT/CIT.

Analysis:
The appeal was filed with a delay of 283 days, and the assessee submitted a petition for condonation of delay, citing pursuit of alternative remedy of rectification as the reason for the delay. The Tribunal, after considering the submissions and facts, condoned the delay and admitted the appeal for adjudication, with a condition to pay a specified amount to the State Legal Aid Authority. The delay was deemed neither wilful nor wanton.

Regarding the registration under section 12AB, the assessee, a trust, had applied for registration under section 12AA, which was granted initially. Subsequently, an amendment mandated existing charitable trusts to apply for registration under section 12AB. The assessee filed the application within the extended due date, and registration was granted from the assessment year 2022-23 to 2026-27. However, the appeal challenged the registration period, seeking it from the assessment year 2021-22 onwards.

The Tribunal found that the ld. PCIT/CIT erred in not granting registration from the assessment year 2021-22. It noted that the assessee complied with the statutory provisions by filing the application within the permitted due date. The Tribunal interpreted the provisions of sections 12A(1)(ac) and 12AB, emphasizing that the registration should have been granted from AY 2021-22, as the CIT(E) is required to pass an order granting registration for five years upon receiving an application under section 12A(1)(ac)(i).

The Tribunal disagreed with the order passed by the ld. PCIT/CIT, which granted registration from 2022-23 to 2026-27, and remitted the matter back with directions to grant registration from the assessment year 2021-22 onwards. It held that the assessee was entitled to registration from 2021-22, as the CPC's denial of benefits under section 11 was based on the lack of fresh registration, which was not available due to the amended law.

In conclusion, the Tribunal allowed the appeal for statistical purposes, setting aside the order of the ld. PCIT/CIT and directing the grant of registration from the assessment year 2021-22 onwards.

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