TaxTMI 
TaxTMI 
2026 (10) TMI 495
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....cer denying exemption under sections 11 and 12 of the Act and taxing the surplus of income over the expenditure without considering the various contentions of appellant. Ground No. 3 The CIT(Appeals)/ NFAC erred in holding the application filed in Form 10A on 28.09.2020 seeking registration under the erstwhile provisions of section12AA was rejected by the CIT(Exemptions) vide order dated 26.02.2021 and the registration granted in Form 10AC on 28.05.2021 was valid for the period AY 2022-23 to 2026-27 and therefore it cannot be extended to subject AY 2020-21. Ground No. 4 The Order of the CIT(Appeals)/NFAC is vitiated for failure to consider the fact that the application made by the appellant on 28.09.2020 pursuant to the insertion of section 12AB of the Act by the Finance Act, 2020 w.e.f 01.06.2020 was omitted w.r.e.f 01.06.2020 by TOLA and thus the application and the consequent order, passed by the CIT(E) dt 26.02.2021 is non-est and void ab-initio. Ground No. 5 The CIT(Appeals)/ NFAC failed to appreciate that the procedure for fresh registration under section 12AB of the Act inserted by the Finance Act, 2020 w,e,f 01.06.2020 w....
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....istration under section 12AA continued to subsist:- The assessee's primary contention is that registration under section 12AA granted on 29.06.2007 was a subsisting registration. Under the pre-TOLA regime, registration once granted under section 12AA continued unless it was cancelled in accordance with law. The CIT(E)'s order dated 26.02.2021 did not cancel the original registration. It only rejected the separate Form 10A application dated 28.09.2020. Therefore, the CIT(A) erred in treating the rejection of the subsequent application as cancellation of the assessee's existing registration. B. Form 10A dated 28.09.2020 was legally misconceived and became non-est:- The Finance Act, 2020 had introduced a new regime involving section 12AB with effect from 01.06.2020. However, owing to TOLA, the Finance Act, 2020 version of section 12AB was itself omitted and was deemed to have been omitted with retrospective effect from 01.06.2020. TOLA inserted the operative section 12AB afresh with effect from 01.04.2021. Consequently, the legal basis upon which the assessee's Form 10A dated 28.09.2020 was purportedly filed ceased to exist retrospectively. T....
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.... - The assessee had filed Form 10B audit report on 20.12.2020 and ITR-7 on 21.12.2020 before the rejection order dated 26.02.2021. The assessee therefore submits that there was no allegation that its objects were non-charitable, its activities were non-genuine, or that it had violated the substantive conditions governing exemption. The dispute is purely one concerning the transitional registration mechanism. G. Beneficial/technical provisions should not defeat substantive exemption:- The entire dispute arose during the exceptional COVID-19 transitional period when the registration framework was undergoing repeated statutory amendments and extensions. The CBDT itself subsequently extended the timelines for filing Form 10A/10AB. Tribunal decisions have recognised that the transition from the old section 12AA regime to section 12AB was accompanied by extensions and procedural difficulties. Accordingly, a procedural application filed during the aborted first version of the new regime cannot reasonably be treated as extinguishing a registration that had already been validly granted in 2007. 6. The Revenue case may be summarised as follows: The assessee&#....
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.... 10A dated 28.09.2020 had itself been retrospectively removed. The ld.CIT(A), while relying upon the rejection dated 26.02.2021, failed to examine this fundamental statutory development. The subsequent registration from A.Y. 2022-23 does not establish absence of registration for A.Y. 2020-21. The ld.CIT(A)'s reasoning effectively treats Form 10AC as the source of the assessee's entitlement to exemption. That is incorrect on the facts presented. The assessee's entitlement for A.Y. 2020-21 flows from its existing section 12AA registration dated 29.06.2007, provided that the same had not been lawfully cancelled. The later Form 10AC pertains to the new registration/migration regime and cannot, by itself, be construed as an order cancelling the earlier registration for A.Y. 2020-21. Section 12A(2) supports continuity in the migration regime. The statutory scheme specifically provides that, where the application is made under section 12A(1)(ac)(i), the provisions of sections 11 and 12 apply from the assessment year from which the trust was earlier granted registration. This legislative treatment is inconsistent with the ld.CIT(A)'s approach of treating the migration to se....