Legal Courses of Action When Section 12AB and 80G Renewal Is Pending, Refused, or Delayed

Registration under section 12AB and approval under section 80G form the backbone of the tax framework for any charitable or religious trust or institution. While section 12AB governs eligibility for exemption under sections 11 and 12, section 80G directly impacts donors by allowing them to claim deduction for eligible donations.

When renewal or regular registration/approval is not granted, the trust’s legal strategy must be aligned with the exact status of its application. In practice, cases typically fall into three broad buckets:

  1. Form 10AB has been filed and is still pending with no order yet passed
  2. The application has been rejected through a formal order by the Commissioner
  3. The trust missed the filing deadline and has not filed Form 10AB on time

Each situation calls for a different remedy and risk-management approach. The discussion below breaks down the appropriate practical and legal steps for each scenario.

1. Essential First Step: Confirm the Exact Portal and Order Status

Before initiating any legal or procedural action, a trust or institution should systematically verify its current status on the Income Tax portal and in its records.

1.1 Documents and Details to Download and Check

The assessee should immediately obtain and review:

  • The most recent order in Form 10AC / Form 10AD or the last section 80G approval order
  • The acknowledgement for the currently filed Form 10AB, if already filed
  • The status on the e-filing portal:
    • Pending
    • Rejected
    • Not filed / time-barred
  • The section code chosen in Form 10A/10AB (e.g., under section 12A(1)(ac)(i) to (vii), relevant section 80G clause, etc.)
  • The exact reasons mentioned in any rejection order issued by the Commissioner of Income Tax (Exemptions) [CIT(E)] or Principal Commissioner of Income Tax (Exemptions) [PCIT(E)]

Note: CBDT Circular No. 7/2024 provides only a specific transitional relief for certain types of late or wrongly coded Forms 10A/10AB and some pending Form 10AB cases. It is not a blanket amnesty or a standing rule that all delayed or pending cases are automatically valid.

2. When Form 10AB Is Pending and No Order Has Been Passed

A mere “pending” status should not be taken lightly. The law, as it currently stands, does not create an automatic deemed approval for a pending application under section 12AB or section 80G.

The Finance (No. 2) Act, 2024 rationalised the processing timeline for regular registration/approval under section 12AB and section 80G. The Commissioner is now normally required to dispose of such applications:

  • Within six months from the end of the quarter in which Form 10AB is received

Accordingly, the assessee should compute the statutory due date as follows:

  • Application received in April–June → Order generally due by 31 December
  • Application received in July–September → Order generally due by 31 March
  • Application received in October–December → Order generally due by 30 June
  • Application received in January–March → Order generally due by 30 September

2.2 No General Doctrine of Deemed Registration

While CBDT Circular No. 7/2024 did allow certain specified pending Form 10AB applications to be treated as valid applications for that limited window, it does not support a universal principle that all pending applications are deemed approved.

The legal position is reinforced by the judgment of the Gujarat High Court in CIT v. Addor Foundation, where the Court held:

  • If the statute does not create a legal fiction of deemed approval, non-disposal within the prescribed time does not by itself confer registration
  • In cases of departmental inaction, the correct route is to seek relief under Article 226 of the Constitution for expeditious disposal, not to assume deemed registration

2.3 Practical Steps in Pending Cases

For a pending Form 10AB (for either section 12AB or section 80G), the assessee should:

  1. Safeguard all documents
    • Maintain copies of:
      • Filed Form 10AB
      • Acknowledgement receipt
      • Prior Form 10AC / Form 10AD / earlier section 80G approval
  2. Compute the statutory deadline
    • Using the six-month-from-end-of-quarter rule
  3. File an online grievance on the e-filing portal
    • Use the Grievances tab → Submit Grievance and track through Grievance Status
  4. Submit a written representation
    • Addressed to the jurisdictional CIT(E)/PCIT(E)
    • Requesting early disposal by a speaking order

If the statutory disposal period has already lapsed, and the case still appears as pending, or if the delay is materially affecting:

  • Exemption under sections 11 and 12, or
  • Donor deduction under section 80G

then it is advisable to:

  • Personally visit the jurisdictional office with complete records, and
  • Seek clarity on:
    • Current status
    • Reasons for continued pendency
    • Expected timeline and manner of disposal

2.4 Risk Considerations: Expired vs. Valid Registrations

  • If the original section 12AB registration is still valid, the trust may continue to claim exemption under sections 11 and 12 while simultaneously pushing for disposal of its renewal application.
  • If the earlier section 12AB registration period has already expired and only a renewal application is pending, the exemption position becomes litigation-prone, as there is no clear statutory provision granting automatic continuation merely due to pendency.

For section 80G, the risk is even sharper:

The Department’s own FAQ clarifies that donations made after the expiry or cancellation of an section 80G certificate do not qualify for deduction.

Hence:

  • If the earlier section 80G approval is already expired, it is unsafe to assure donors that their deduction is protected merely because the renewal application is pending.

3. When the Application Has Been Rejected by a Formal Order