VTPA Representation for extending the period of renewal for registration from 5 years to 10 years for the charitable trust who are required to apply for registration by 30th Sept 2025
To
Smt. Nirmala Sitharamanji
Hon’ble Finance Minister of India
Ministry of Finance
Government of India
New Delhi – 01
Subject: Representation for ensuring Ease of Charity and Timely Relief for Charitable Trusts
Respected Madam,
On behalf of the Vidarbha Tax Practitioners Association, we extend our gratitude for the continuous efforts of the Government in simplifying and rationalizing the taxation system.
However, there remain certain pressing issues for charitable trust and institutes which, if addressed, would not only reduce unnecessary litigation but also bring immense relief to organizations engaged in the noble task.
Our key submissions are as follows:
1.Automatic Extension of Renewal Period for Trusts:
As per the current law, trusts registered under Section 12AB are required to renew registration every 5 years. The first cycle of renewal falls due on 31.03.2026. Thousands of trusts across India will face a huge compliance burden at once whereas the Finance Act – 2024 (No. 2) has now extended the period of renewal from 5 years to 10 years. However, it would have prospective application and not retrospective. It would create a heavy workload/pressure on the trust as well as CIT (E) due to the already existing workload.
Our Suggestion:
• Since the new law is applicable only to trusts with receipts below Rs. 5 Cr, the extension for renewal cycle to 10 yearsinstead of 5 years may be extended retrospectively by exercising power under section 119(2)(b).
This will reduce unnecessary compliance, ease administrative workload of the department, and allow trusts to focus on their charitable activities.
2.Power to CIT/PCIT to Grant Registration Even in Wrong Clause Applications:
It has been noticed that many trusts and institutions are denied registration under Section 12AB / 80G / other clauses solely because their application was made under a “wrong clause.” This is a procedural issue, not a substantive defect. Currently, respected CIT (Exemption) authorities have no power to allow correction of such errors, leading to avoidable litigation and genuine charitable entities being deprived of tax benefit. The process of filing the appeal before ITAT and then getting ultimate benefit is a highly time consuming exercise.
Our Suggestion:
• Empower the CIT/PCIT to grant registration under the correct clause if the applicant has otherwise fulfilled all conditions.
• Extend this relaxation retrospectively so that past cases where registration was denied due to a wrong clause may be reconsidered.
• Similar powers already exist in CBDT’s condonation jurisdiction under section 119(2)(b), and hence the same enabling power can be provided to CIT/PCIT to avoid multiplicity of proceedings
3. Application under clause (b) to section 12A(1) (ac) (vi):
There are various small trusts who have commenced and carried out the charitable trusts even without registration under section 12AA/12AB of the Income Tax Act – 1961. Such trust has filed the return under ITR – 7 instead of ITR – 5. In all such cases, the benefit of application of money under section 11 is denied or can be denied being an unregistered trust under the Income Tax Act- 1961.
In all such cases, the application for registration under the above clause is also rejected as the ITR – 7 was filed earlier.
Our Suggestion:
• CIT – Exemption may be empowered to grant the registration even if the return for earlier years has been filed in ITR – 7. The violation of the literal provision of the clause (b) can be taken care of by taking other remedial measures.
• Above implementation would relieve various smaller trusts facing unwanted consequences as a result of denial of registration.
4. Expeditious Effect to the order of ITAT:
While ITAT in various cases have granted the relief to the trust, the effect of the same is getting delayed due to overburden work load the CIT (Exemption) at Pune.
Our Suggestion:
• Mandate effect to the ITAT orders within 60 daysof the conclusion of the hearing along with ensuring the required staff/team members at the CIT (E) office .
• This will ensure timely justice, reduce uncertainty, and uphold faith in the judicial process.
We as an Association represent a large number of tax practitioners advising hundreds of charitable trusts in Vidarbha region. In our humble submission, above measures are simple, practical, and in line with the Government’s vision of Ease of Doing Business and Ease of Living for Taxpayers.
We respectfully urge your good office to consider these suggestions at the earliest.
We assure you of our continued cooperation in all initiatives of the Ministry aimed at strengthening compliance and transparency in the taxation system.
Yours faithfully,
For Vidarbha Tax Practitioners Association
CA Mahendra Jain CA Naresh Jakhotia
President Secretary
Place : Nagpur
Date : 29.08.2025
