Condonation of Delay in Trust Registration & 80G Renewal: What Trust need to know
The Finance (No. 2) Act, 2024 has quietly introduced one of the most important and taxpayer-friendly reforms for charitable and religious trusts. For years, thousands of NGOs struggled with missed deadlines for renewal under Section 12A/12AB and approval under Section 80G. Even a small delay meant automatic rejection and loss of exemption. But with the 2024 amendments, the system is now far more practical and forgiving — provided the trust truly deserves it.
This article explains the new legal position, the powers of CIT(Exemptions), whether long delays (including 5–10 years) can be condoned, and whether 80G delays are condonable. It is written for general readers, NGOs, auditors, donors, and tax practitioners.
1. Who Can Now Condoned Delay Under Section 12A / 12AB?
Until 01-10-2024, the law did not give any authority to the Commissioner of Income Tax (Exemptions) to condone delay in filing trust registration/renewal applications. Only CBDT could give relief under Section 119(2)(b), and obtaining such approval required a special application at the Board level — a slow and uncertain process.
After the Finance Act, 2024:
From 1 October 2024, the power to condone delay is now clearly given to:
• CIT(Exemptions)
• Pr. CIT(Exemptions)
This applies to all applications filed under Section 12A(1)(ac), including:
• Renewal applications
• Fresh registration
• Provisional registration
• Re-registration after expiry
• Registration after modification of objects
This amendment has solved a long-standing difficulty faced by trusts during the migration to Section 12AB.
2. Is There Any Time Limit for Condonation?
The amended law does not impose any upper limit on the period of delay that can be condoned.
No limit of 1 year
No limit of 3 years
No limit of 5 years
Even longer delays — 7, 10 or more years — may be condoned, as long as “reasonable cause” exists.
Indian courts have consistently held that:
“Length of delay is not important. The justification for the delay is.”
Thus, even a long delay can be condoned if the reason is genuine.
3. What Reasons Are Accepted for Long Delays?
Authorities generally accept condonation when the delay is due to:
• Misunderstanding or lack of knowledge of the new registration regime
• Mistake by accountant/consultant
• Technical errors on the portal
• Change in trustees or management
• Health emergencies
• Difficulty in obtaining old records
• Good-faith belief that earlier registration was still valid
What is not acceptable:
• Deliberate non-compliance
• Misuse of charitable funds
• Activities not aligned with Section 2(15)
• Attempts to seek exemption after violations
4. Whether CIT(E) Can Correct Applications Filed Under the Wrong Clause?
Many trusts accidentally file under the wrong clause of Section 12A(1)(ac). For example:
• Filing for provisional registration instead of regular renewal
• Filing under the modification of objects clause instead of expiry clause
• Uploading wrong documents under the wrong application category
Earlier, the only solution was withdrawal/rejection and filing a fresh application — which was often impossible if the deadline had already expired.
After the amendment, CIT(E) can also condone this mistake.
This is a major relief for trusts that made genuine technical errors.
5. Whether Delay in 80G Application Can Also Be Condoned?
Yes — delay in filing applications under Section 80G(5) can also be condoned but not by CIT (E). There is no specific statutory clause for 80G condonation with CIT -E, relief is available through:
• CBDT power under Section 119(2)(b)
• Courts and tribunals have held in favour of the trust if it meets the conditions of Section 80G and delay is not intentional …then approval should not be denied only because of technical delay.
Thus, both 12A/12AB and 80G condonation are now available, though 12A condonation is clearly supported by the Finance Act, 2024.
6. What Trusts Should Do Immediately
If your trust missed any deadline — 12A renewal, 12AB migration, 80G renewal — you should:
1. Apply for condonation immediately
2. State the full reason for delay
3. Attach supporting documents
4. Provide continuous audited accounts
5. Prove that charitable activities continued
6. Provide trustee resolution
7. Confirm no misuse of funds
8. Mention amendment introduced by Finance Act, 2024
The stronger the justification, the greater the chance of success.
7. Final Takeaway
The Finance Act, 2024 has made the trust-registration regime more realistic and taxpayer-friendly. With CIT(Exemptions) now empowered to condone delays and even wrong-clause filings, trusts no longer need to fear rejection due to minor or technical defaults.
Key Points:
• Delay under Section 12A/12AB is now condonable by CIT(E).
• No upper time limit — even 5 to 10 years can be condoned.
• Wrong-clause filings can be corrected.
• 80G delays cannot be condoned by CIT – Exemption.
• Compliance becomes easier for genuine charitable organisations.
This is a welcome reform for the NGO sector and strengthens the trust-based compliance culture the government aims for.
