Section 12AA — Section 12AA — Legacy Trust Registration…

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Statutory text — Income-tax Act, 1961

Procedure for registration.

12AA. (1) The Principal Commissioner or Commissioner, on receipt of an application for registration of a

trust or institution made under clause (a) or clause (aa) or clause (ab) of sub-section (1)] of section 12A,

shall—

(a) call for such documents or information from the trust or institution as he thinks necessary in order

to satisfy himself about,—

(i) the genuineness of activities of the trust or institution; and

(ii) the compliance of such requirements of any other law for the time being in force by the

trust or institution as are material for the purpose of achieving its objects,

and may also make such inquiries as he may deem necessary in this behalf; and

(b) after satisfying himself about the objects of the trust or institution and the genuineness of its

activities as required under sub-clause (i) of clause (a) and compliance of the requirements under

sub-clause (ii) of the said clause, he—

(i) shall pass an order in writing registering the trust or institution;

(ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or

institution,

and a copy of such order shall be sent to the applicant :

Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a

reasonable opportunity of being heard.

(1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no

order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand

transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or

Commissioner may proceed with such applications under that sub-section from the stage at which they were

on that day.

(2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before

the expiry of six months from the end of the month in which the application was received under clause (a) or

clause (aa) or clause (ab) of sub-section (1) of section 12A.

(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has

obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2)

Act, 1996 (33 of 1996)] and subsequently the Principal Commissioner or Commissioner is satisfied that the

activities of such trust or institution are not genuine or are not being carried out in accordance with the

objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the

registration of such trust or institution:

Provided that no order under this sub-section shall be passed unless such trust or institution has been given

a reasonable opportunity of being heard.

(4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted

registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A [as

it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996) and subsequently it is noticed

that—

(a) the activities of the trust or the institution are being carried out in a manner that the provisions of

sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or

institution due to operation of sub-section (1) of section 13; or

(b) the trust or institution has not complied with the requirement of any other law, as referred to in

sub-clause (ii) of clause (a) of sub-section (1), and the order, direction or decree, by whatever

name called, holding that such non-compliance has occurred, has either not been disputed or has

attained finality,

then, the Principal Commissioner or the Commissioner may, by an order in writing, cancel the registration of

such trust or institution:

Provided that the registration shall not be cancelled under this sub-section, if the trust or institution proves

that there was a reasonable cause for the activities to be carried out in the said manner.

(5) Nothing contained in this section shall apply on or after the 1st day of April, 2021.

Function in the statutory architecture

Section 12AA laid down how the Principal Commissioner or Commissioner dealt with an application for registration of a trust or institution under s. 12A. He could call for documents and make inquiries to satisfy himself about the genuineness of the activities and compliance with other laws material to the objects, and then pass a written order registering or refusing registration. Refusal required a reasonable opportunity of being heard. Every order had to be passed within six months from the end of the month in which the application was received.

The section also allowed cancellation of registration where the activities were not genuine or not carried out in accordance with the objects (sub-section (3)), or where s. 13(1) excluded income or a finding of non-compliance with another law had become final (sub-section (4)), unless a reasonable cause was shown.

Operative consequences

An order under s. 12AA disposed of the registration application that s. 12A makes a condition for applying ss. 11 and 12.
Cancellation under sub-section (3) or (4) took that registration away.
Under the 2025 Act, an entity registered under s. 12AA at any time is a “specified person” for the Part on registered non-profit organisations.

Status

The section is not operative for AY 2026-27. Sub-section (5) provides: “Nothing contained in this section shall apply on or after the 1st day of April, 2021.” Registration from that date is governed by s. 12AB. The Finance Act, 2026 does not amend this section.

The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no provision in the Income-tax Act, 2025.

Case law on Section 12AA

ITAT, High Court and Supreme Court judgments applying this section, on BharatTax.net, our income tax case law search.

← All sections (940)Act 1961 hub

Income-tax Act, 1961	Income-tax Act, 2025
s. 12AA(1), (2) — procedure for registering a trust or institution on an application under s. 12A	No corresponding provision in the Income-tax Act, 2025; registration of a registered non-profit organisation is under s. 332
s. 12AA(3), (4) — cancellation of registration	No corresponding provision in the Income-tax Act, 2025; consequences of specified violations are in s. 351 and s. 352
Registration obtained under s. 12AA	s. 355(l), (m) — s. 12AA is a “specified provision”, and a person registered under it at any time is a “specified person”

Section 12AA — Legacy Trust Registration Framework

Case law on Section 12AA