RENEWAL OF REGISTRATION BY TRUST/CHARITABLE INSTITUTION

A charitable trust that has not filed returns since AY 2021–22 and failed to renew its exemption under Section 12AB is no longer eligible for exemption under Sections 11 and 12. However, the trust does have a path to regain exemption by taking specific steps, as explained below.​

Consequences of Lapsed 12AB Registration

• Loss of eligibility for Section 11 and 12 exemptions until valid registration is restored.​

• Income may be taxed at the maximum marginal rate as a regular entity.

• Non-filing of returns for previous assessment years can lead to penalties and prosecution.

1. Fresh Application for 12AB Registration

   • The trust must apply afresh for registration under Section 12AB using Form 10A or Form 10AB, as appropriate.​

   • This application is processed by the Principal Commissioner or Commissioner of Income Tax (Exemptions).

   • File all pending income tax returns (ITR-7) for the years for which no returns were filed. This demonstrates compliance and willingness to regularize the trust’s affairs.​

   • Provide explanations for delays, if asked, including for non-compliance in return filings.

   • There is no “automatic renewal”—the process is now actively monitored, and missed deadlines for renewal or fresh registration usually result in a loss of exemption status.​

   • Swift action and complete documentation can help in regaining exempt status, but exemption applies prospectively from the date of grant, not retroactively for the period during which registration lapsed.

I  sincerely thank Mr. Dhirajlal Rambhia  for the article in response to my query which  is comprehensive and helpful.

Am submitting below my view about the issue and will appreciate further opinions and also if there has been any case regarding revalidation of registration.

"The Institution, as it failed to revalidate its registration under section 12AB, will now be treated as an unregistered entity and filing Form 10A or 10AB will not also be normally possible since the extended dead-line to revalidate expired on 30^th June 2024. In such circumstance, the entity has, according to me, the following two options available. :

OPTION 1 :                                                                                                                                                                                                                                                             Log in to Income Tax E-filing Portal and attempt to apply for revalidation of exemption by filing ‘A Condonation petition explaining the justifiable reasons for such delay and permission to file Form 10AB( Form 10A will now not be available since window is now closed) for revalidation of registration to the jurisdictional CIT(Exemptions).                                                                                                                             

OPTION 2 :                                                                                                                                                                                                                                                               FILE APPEAL  TO CIT (APPEAL) with justified  reasons for                                                                                                                                                                                (a) failure for submission of renewal request within the due time;                                                                                                                                                                       (b) request for condonation of delay and registration                                                                                                                                                                                              (c) willingness to comply with the requirements and (d) any other suitable reason"