Registration Once Granted Under Section 12AB Remains Valid Until Cancelled Through Prescribed Statutory Procedure: ITAT Bangalore
Case Overview
Case Name: Doddaballapura Planning Authority Vs CIT (Exemptions) (ITAT Bangalore)
Court: Income Tax Appellate Tribunal, Bangalore
Order Pronounced: 22-July-2026
Relevant Provisions: Section 12A, Section 12AA, Section 12AB, Section 12AB(4), Section 143(3), Section 2(15) of the Income Tax Act, 1961
Background and Institutional Profile of the Assessee
The assessee in this matter is a statutory authority constituted under the Bangalore Metropolitan Region Development Authority Act, 1985. Its primary mandate involves overseeing planned urban and rural development and facilitating coordination among various civic bodies operating within its territorial jurisdiction. The authority functions under direct supervision of the State Government and discharges obligations of a statutory nature aimed at ensuring orderly growth of the metropolitan region.
Given the nature of its functions and the governmental control exercised over its operations, the assessee had sought registration under the income tax provisions relating to charitable organisations, which brings it within the ambit of Section 12A and Section 12AB of the Income Tax Act, 1961.
Chronology of Registration Events
Understanding the sequence of registration applications and their outcomes is essential to appreciate the legal dispute that eventually arose before the ITAT Bangalore.
First Application — Rejected Under Old Regime
The assessee's initial application seeking registration under Section 12A of the Income Tax Act, 1961 — filed under the erstwhile regime — was rejected by the Commissioner of Income Tax (Exemptions), Bangalore, vide order dated 31/03/2021. The basis for rejection was the failure of the assessee to furnish requisite documentation and details necessary to demonstrate the genuineness of its stated objects and actual activities.
Second Application — Granted Under New Regime
Following the rejection of its first application, the assessee moved promptly to apply for registration under the new regime, specifically under Section 12A(1)(ac)(i) of the Income Tax Act, 1961. This application was favourably considered and registration was granted via Form 10AC dated 15/11/2021, covering assessment years 2022-23 to 2026-27.
Renewal Application — The Subject Matter of Dispute
As the five-year registration period was approaching its expiry, the assessee filed Form 10AB on 27/09/2025 under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961, seeking renewal of its registration under Section 12AB.
The CIT(E)'s Order and Grounds for Rejection
The Commissioner of Income Tax (Exemptions) rejected the renewal application through the impugned order dated 24/11/2025. The reasoning adopted by the CIT(E) was as follows:
Section 12A(1)(ac)(i)is a provision that permits migration to the new regime exclusively for entities that held a subsisting registration under eitherSection 12AorSection 12AAimmediately before such migration.- Since the assessee's initial application under
Section 12Awas rejected on 31/03/2021, it did not satisfy the precondition of holding a pre-existing valid registration. - Consequently, the CIT(E) concluded that the registration granted on 15/11/2021 under
Section 12A(1)(ac)(i)was wrongly obtained and therefore legally invalid. - Building on this conclusion, the CIT(E) held that all subsequent applications — including the present renewal application — automatically lose their legal foundation because they rest upon a registration that was itself fundamentally flawed.
- The renewal application was accordingly held to be void ab initio.
Aggrieved by this order, the assessee preferred an appeal before the ITAT Bangalore.