RPT Act Not Required for 12AB Registration: ITAT Jaipur in Dhapi Devi Tormal Seva Samiti Case

 

Introduction: Breaking Barriers for Charitable Trusts

Recently, the ITAT Jaipur delivered a significant ruling in Dhapi Devi Tormal Seva Samiti Dhandhan vs. CIT (Exemption), clarifying that registration under the Rajasthan Public Trust (RPT) Act is not mandatory for obtaining Section 12AB status under the Income‑Tax Act. This is noteworthy for nonprofit organizations, as Section 12AB registration is essential for claiming tax exemptions. Let's explore what this means, why it matters, and how charitable trusts can apply.

🧭 Understanding the Core Issue

Background at a glance

Challenge	Details
Trust	Dhapi Devi Tormal Seva Samiti, established in 2014 with charitable objectives (education, cow protection)
12AB Application declined	CIT (Exemption) rejected application citing: incomplete Form 10AB, absence of RPT Act registration, and doubts on genuineness of activities
Appeal backlog	Filed 250 days late, justified by incorrect legal advice

The trust argued it was led to believe RPT Act compliance was necessary before seeking 12AB registration. The ITAT Jaipur disagreed.

ITAT Jaipur’s Key Pronouncements

1. RPT Act registration does not precondition for Section 12AB

Citing earlier rulings (e.g., APJ Abdul Kalam Education & Welfare Trust), ITAT reaffirmed that absence of RPT Act registration cannot be a ground to deny 12AB status 

2. Delay in appeal condoned

Recognizing poor legal advice as valid cause, the ITAT condoned the 250-day delay—subject to a nominal ₹1,000 cost to the Prime Minister’s Relief Fund 

3. Trusts deserve a fair hearing

Despite incomplete filing, the trust was granted a fresh hearing and an opportunity to rectify defects (Form 10AB, genuineness evidence) 

Why This Ruling Matters

1. Reduced procedural hurdles: Charities no longer need to wait for state trust act compliance before applying for 12AB.

2. Boosted clarity & confidence: ITAT’s stance brings uniformity in handling trust registrations nationwide.

3. Encourages compliance: While trusts can proceed with 12AB registration, genuine activity and correct documentation expectation remains.

Practical Outlook: Steps for Charitable Trusts

If you're navigating registration, follow this three-point checklist:

1. File Form 10AB completely: Include trust deed, audit reports, objectives, beneficiary demographics.

2. Submit supporting evidence: Activity reports, financials, and correspondence should back claims.

3. Don’t wait for RPT registration: While advisable in due course, it's not a prerequisite for tax status.

💡 Trust Tip:

Maintain an organized file of communications and audit docs—critical during the 12AB process.

Real World Example

🚀 Take "Sunrise Education Trust":

• Applied for 12AB despite pending RPT registration.

• Received a show‑cause notice citing Form 10AB issues.

• Promptly responded with required details and a trust deed.

• Earned 12AB status within 6 weeks, well before RPT certificate arrival.

This mirrors ITAT's supportive position—file for 12AB with valid info, fix any deficiencies on time, and you're on track.

FAQs

1. Is RPT Act registration now unnecessary?
✔️ Not required for 12AB, but still advisable for state-level legal standing and compliance.

2. What if my 12AB was rejected due to RPT registration?
Appeal to ITAT, referencing this precedent. Even past denials may be reconsidered.

3. What if Form 10AB is incomplete?
Respond quickly to notices with documentation or rectify omissions—ITAT supports a remedial approach.

4. Can I file 12AB even before RPT registration?
Yes, proceed with 12AB, and later, separately file for RPT as per state law.

5. Does this apply only in Rajasthan?
No. Other ITAT benches have echoed similar rulings. It's becoming a universal principle.

Conclusion: A Progressive Ruling for Trusts

The ITAT Jaipur’s decision serves as a milestone—flexible, fair, and encouraging. Charitable trusts can now confidently pursue Section 12AB registration without unnecessary delays over state trust formalities. However, diligence in documentation remains non-negotiable.

At Manika FinTax Solutions, we guide nonprofits through every step—application, compliance, and appeals—ensuring stress-free and successful registrations.

📞 Let Us Help You: Contact Us for Professional 12AB Filing Support!

Need help with your 12AB application or facing rejection? Get expert assistance from Manika FinTax Solutions. We offer personalized review, documentation support, and liaison with authorities.

Contact us today for seamless, paid filing support and ensure your trust gets the exemptions it deserves.

Keywords
12AB registration without RPT, RPT Act not essential for 12AB, ITAT Jaipur 12AB RPT Act, Section 12AB process, Charitable trust tax exemption, Trust 12AB tips, Dhapi Devi Tormal Seva Samiti case explained