Application for registration of trust U/s 12AA

1. A charitable trust runs pre-primary school since 2016. The other objects of the trust are running ambulance, library for needy etc. The trust is incorporated as per the MOU and not trust deed.
2. The trust is duly registered under The Bombay Charitable Trust Act.
3. They had obtained 80G and registration certificate at the time of inception i.e. in 1996. But never renewed it later as there was absolutely no activity in the trust until 2016.
4. Even after 2016, no application was made either for 80G or 12A or applicable section.
5. The school has gross receipts less than 5 crore. It's always been a few lakh rupees since the activity started.
6. The trust always filed the income tax return claiming exemption U/s.10(23C)(iiiad).

The queries :-
Whether the trust now requires to obtain registration 12AA/12A by filing an application in form 10A and 10 AB?
Whether the unregistered trust is entitle to exemption U/s.10(23C)(iiiad) as the gross receipts are less than 5 crore?

Please guide in detail so that the trust can decide upon its course of action accordingly.

Hi Mohan,

Here’s a detailed response to your queries regarding registration under Section 12AA/12A and exemption under Section 10(23C)(iiiad) for your charitable trust running a pre-primary school and other activities:

1. Does the trust now require registration under Section 12AA / 12A by filing Form 10A and 10AB?

Yes, any trust or institution seeking exemption under the Income Tax Act must obtain registration under Section 12AA (or 12AB, the new provision replacing 12AA w.e.f. AY 2021-22).
Since your trust is running activities from 2016 onward after a long period of inactivity, and has not obtained fresh registration under 12AA/12AB, it must apply for registration afresh.
The application is filed online using Form 10A on the Income Tax e-filing portal.
After registration, the trust is also required to file the Audit Report in Form 10B annually (if applicable), and file for renewal of 80G using Form 10AB if donations and exemption are claimed.
Note: Registration under Section 12AA/12AB is mandatory for claiming exemption under various sections including Section 10(23C)(iiiad).

2. Is an unregistered trust entitled to exemption under Section 10(23C)(iiiad) if gross receipts are less than ₹5 crore?

The Income Tax Act mandates registration under Section 12AA/12AB for exemption eligibility.
An unregistered trust cannot claim exemption under Section 10(23C)(iiiad), regardless of turnover/receipts.
The fact that gross receipts are less than ₹5 crore may exempt the trust from audit requirements, but registration itself is compulsory for exemption.
Filing ITR claiming exemption without valid registration is not in compliance and may attract notices or scrutiny.

Additional points:

Since the trust was registered under Bombay Charitable Trust Act and had 80G earlier but did not renew it, fresh registration is needed.
The MOU instead of trust deed may be scrutinized; trust deed or governing documents should clearly state charitable objects.
Even if activity is small scale, registration is important for legal compliance and benefits like 80G.

Summary:

Query	Advice
Need for registration under Section 12AA/12AB	Yes, apply immediately via Form 10A
Exemption eligibility without registration	No, registration is mandatory
Gross receipts below ₹5 crore	Audit exemption possible but not exemption eligibility without registration