REGARDING ITR OF TRUST
This query is : Resolved
Quick Summary
Suresh S. Tejwani
(Querist)
17 March 2026
If we file ITR-5 instead of ITR-7 in FY 2023-24 and report an income of ₹12,000, a demand is raised. Is there any way to avoid paying this demand, considering that we had provisional 12A registration for that year?
17 March 2026
You can file an appeal against the Intimation u/s 143(1) (the document that raised the demand) before the Commissioner of Income Tax (Appeals).
The Argument: You will argue that the trust holds a valid provisional 12A registration, the income is exempt, and filing ITR-5 instead of ITR-7 was a bona fide (genuine) clerical error that should not rob the trust of its legitimate statutory exemption.
Condonation of Delay: An appeal must normally be filed within 30 days of receiving the 143(1) intimation. Since you likely received it months ago, you must simultaneously file a request for Condonation of Delay with the appeal, stating the delay was unintentional and you only recently realized the technical error in the form type.
The Argument: You will argue that the trust holds a valid provisional 12A registration, the income is exempt, and filing ITR-5 instead of ITR-7 was a bona fide (genuine) clerical error that should not rob the trust of its legitimate statutory exemption.
Condonation of Delay: An appeal must normally be filed within 30 days of receiving the 143(1) intimation. Since you likely received it months ago, you must simultaneously file a request for Condonation of Delay with the appeal, stating the delay was unintentional and you only recently realized the technical error in the form type.
17 March 2026
Option 2: Petition u/s 119(2)(b) to the Jurisdictional CIT
You can file a formal, manual application to your Jurisdictional Principal Commissioner of Income Tax (Pr. CIT) under Section 119(2)(b).
The Process: This section gives the CIT the power to condone delays and admit a claim for an exemption to prevent "genuine hardship." You would request the CIT to condone the delay and permit the trust to file a manual or backend-enabled ITR-7 to correctly claim the Section 11/12 exemption.
Pros/Cons: This is highly dependent on the CIT's discretion, but it is a standard administrative remedy for severe, genuine mistakes.
Crucial Caveat for Success
For either of the above options to succeed, you must ensure you met the other mandatory requirements for a 12A Trust for FY 2023-24:
Did you file the Audit Report (Form 10B/10BB) before the specified due date?
If you accumulated funds, did you file Form 9A or Form 10 before the due date?
If the audit report was not filed, defending the exemption even in appeal becomes significantly harder.
You can file a formal, manual application to your Jurisdictional Principal Commissioner of Income Tax (Pr. CIT) under Section 119(2)(b).
The Process: This section gives the CIT the power to condone delays and admit a claim for an exemption to prevent "genuine hardship." You would request the CIT to condone the delay and permit the trust to file a manual or backend-enabled ITR-7 to correctly claim the Section 11/12 exemption.
Pros/Cons: This is highly dependent on the CIT's discretion, but it is a standard administrative remedy for severe, genuine mistakes.
Crucial Caveat for Success
For either of the above options to succeed, you must ensure you met the other mandatory requirements for a 12A Trust for FY 2023-24:
Did you file the Audit Report (Form 10B/10BB) before the specified due date?
If you accumulated funds, did you file Form 9A or Form 10 before the due date?
If the audit report was not filed, defending the exemption even in appeal becomes significantly harder.
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