Section 12AB Renewal: ITAT Ruling on Section 13 Issues
The ITAT Delhi has ruled that Section 13 issues belong to the assessment stage, not registration. This order is useful for charitable trusts and NGOs whose Form 10AB applications for renewal of registration have been rejected on the ground of alleged Section 13 violations. The ruling supports an appeal if CIT(E) has rejected your renewal because trustees or related parties are said to have received benefits in a particular year.
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Legal basis: Section 12AB of the Income-tax Act, 1961 — Effective: 1 April 2021. Source: https://www.taxmann.com/research/income-tax/case-laws. Last reviewed by CA Harun Raaj: September 2026.
Section 12AB Renewal: ITAT Delhi Holds Section 13 Issues Belong to Assessment, Not Registration
A 2026 order of the Delhi bench of the Income Tax Appellate Tribunal (ITAT) is useful for charitable trusts and NGOs whose Form 10AB applications for renewal of registration have been rejected on the ground of alleged Section 13 violations. The Tribunal held that such allegations are for the Assessing Officer at the assessment stage, not a reason to refuse renewal of registration.The case: Lala Sher Singh Memorial Jeevan Vigyan Trust Society v. PCIT (Central)-3 (ITAT Delhi, 2026)
The trust had applied on Form 10AB for renewal of its registration under Section 12A(1)(ac)(ii)/12AB and of its approval under Section 80G(5). The applications were rejected, with the department relying on alleged violations of Section 13 (the provisions that deny exemption where income or property benefits specified persons, such as trustees and related parties).What the ruling does and does not mean
What it supports. If CIT(E) has rejected your renewal because trustees or related parties are said to have received benefits in a particular year, this order supports an appeal. The rejection mixes up two separate questions: whether the trust should be registered, and whether it is entitled to exemption for a given year.What it does not say. The order does not mean CIT(E) must accept a registration application at face value. At the registration stage, CIT(E) must still be satisfied about the genuineness of the trust's activities and the charitable nature of its objects, and can call for documents and evidence for that purpose.
Key point: The ITAT Delhi ruling limits the use of year-specific questions about application of income and benefits to specified persons, which belong to assessment.
Registration validity: 5 years or 10 years
The Finance Act 2025 extended the validity of Section 12AB registration to 10 years for smaller trusts. The conditions, including the income test for each of the two preceding years, are explained in our earlier guide: Section 12AB: 10-Year Validity for Small Trusts & CS 04 Scrutiny Risk.
The Income-tax Act, 2025
The Income-tax Act, 2025 applies from 1 April 2026 (tax year 2026-27). It moves the registration of charitable trusts and institutions into a new framework for Registered Non-Profit Organisations (RNPOs) in Chapter XVII, with new section numbers.
What trusts should do if registration was rejected
- Obtain the rejection order in writing. CIT(E) must pass a speaking order with reasons. If you have not received one, request it formally.
- Identify the ground of rejection. If it rests on alleged Section 13 violations or other year-specific assessment questions, this order is relevant.
- Consider an appeal to the ITAT under Section 253 of the Income-tax Act, 1961, within the time limit counted from the date the order was communicated. If the time has passed, an application for condonation of delay must show sufficient cause.
- File Form 10B/10BB for AY 2026-27 by the extended due date of 21 October 2026 (CBDT Circular No. 07/2026), even while an appeal is pending.
- Check CBDT Circular No. 06/2026 (2 July 2026) if your Form 10AB application for approval under Section 80G(5) was filed late, between 1 October 2025 and 31 March 2026. The circular condones that delay.
I'm CA Harun Raaj, Visakhapatnam. If you are a charitable trust or NGO affected by the ITAT Delhi ruling, please reach out to me for guidance on your specific situation.
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See Also
Frequently Asked Questions
What is the significance of the ITAT Delhi ruling on Section 12AB renewal?
The ruling holds that Section 13 issues belong to the assessment stage, not registration, and supports an appeal if CIT(E) has rejected your renewal because trustees or related parties are said to have received benefits in a particular year. This is based on Section 12AB of the Income-tax Act, 1961, as per the ITAT Delhi order.
What should I do if my registration was rejected due to alleged Section 13 violations?
You should obtain the rejection order in writing, identify the ground of rejection, and consider an appeal to the ITAT under Section 253 of the Income-tax Act, 1961. This is as per the procedure outlined in the Income-tax Act, 1961, and relevant circulars.
Is the ITAT Delhi ruling applicable to all charitable trusts and NGOs?
The ruling is applicable to charitable trusts and NGOs whose Form 10AB applications for renewal of registration have been rejected on the ground of alleged Section 13 violations. However, each order turns on its facts, and you should read the full order and compare it with your own rejection order before relying on it, as per the ITAT Delhi order.
What is the extended validity of Section 12AB registration for smaller trusts?
The Finance Act 2025 extended the validity of Section 12AB registration to 10 years for smaller trusts, as per the Finance Act 2025.
How does the Income-tax Act, 2025 affect the registration of charitable trusts and institutions?
The Income-tax Act, 2025 moves the registration of charitable trusts and institutions into a new framework for Registered Non-Profit Organisations (RNPOs) in Chapter XVII, with new section numbers, as per the Income-tax Act, 2025.
What should I do if my Form 10AB application for approval under Section 80G(5) was filed late?
You should check CBDT Circular No. 06/2026 (2 July 2026), which condones the delay if your application was filed between 1 October 2025 and 31 March 2026, as per CBDT Circular No. 06/2026.
What is the deadline for filing Form 10B/10BB for AY 2026-27?
The deadline for filing Form 10B/10BB for AY 2026-27 is 21 October 2026, as per CBDT Circular No. 07/2026.
Can I appeal to the ITAT if the time limit for appeal has passed?
Yes, you can file an application for condonation of delay, which must show sufficient cause, as per Section 253 of the Income-tax Act, 1961.
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