Prior Rejection No Bar to Fresh Section 12AB Registration Application: ITAT Bangalore Ruling

Overview of the Case

The Income Tax Appellate Tribunal (ITAT), Bangalore, recently delivered a significant ruling in the matter of D.R. Shanmukappa Charitable Trust Vs CIT (Exemptions), addressing a critical question that affects charitable trusts and institutions across India — whether a prior rejection of a registration application under Section 12AB of the Income Tax Act, 1961, without any appeal being filed, permanently bars the applicant from filing a fresh application before the same authority. The Tribunal's answer was an unambiguous no, providing much-needed relief to trusts that have faced procedural rejections.

Background and Factual Matrix

The assessee, D.R. Shanmukappa Charitable Trust, was established by a Deed of Trust dated 01.03.2021 at Bengaluru and claimed to be engaged in charitable activities as defined under Section 2(15) of the Income Tax Act, 1961.

Chronology of Applications and Rejections

The trust's journey toward obtaining registration under Section 12AB was marked by a series of procedural setbacks:

  1. **First Application — 08.11.2023 (Form No. 10AB)😗* The application was rejected by the CIT(Exemptions), Bengaluru vide order dated 13.05.2024 on the ground that the assessee failed to respond to notices and did not appear or furnish the documents and details required for registration.

  2. **Second Application — 21.08.2024 (Form No. 10AB)😗* This application was also rejected vide order dated 06.01.2025, with the CIT(Exemptions) noting that the assessee had selected an incorrect section code while filling out Form No. 10AB.

  3. **Third Application — 20.01.2025 (Form No. 10AB)😗* The CIT(Exemptions) rejected this application vide order dated 24.09.2025, holding that since the earlier rejection had attained finality — no appeal having been preferred before the ITAT — entertaining a fresh application on the same matter would amount to a collateral attack on a concluded decision, thereby undermining the established appellate framework. The application was accordingly treated as non est and void ab initio.

  4. **Fourth Application — 18.07.2025 (Form No. 10AB)😗* This application met a similar fate via order dated 23.09.2025, with the CIT(Exemptions) applying the same reasoning as above to reject it as non-maintainable.

Aggrieved by the order dated 24.09.2025 passed in respect of the application filed on 20.01.2025, the assessee approached the ITAT, Bangalore.

Grounds of Appeal Raised Before the Tribunal

The assessee raised several substantial grounds before the ITAT, the key ones being:

  • The CIT(Exemptions) committed an error of law and fact by rejecting the application solely on account of an incorrect dropdown selection in the online Form No. 10AB, without examining the substantive merits.

  • The wrong clause selection constituted a purely technical, procedural, and curable defect that could not be treated as fatal to the application. The assessee relied on several judicial precedents:

Akhil Bhartiya Adhivakta Parishad v. CIT(E), ITA No. 4954/Del/2024 (ITAT Delhi, February 2025) — Mistake in selecting wrong 80G clause is curable; rejection on this ground alone is unsustainable.