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Facts
Fatema Charitable Trust, provisionally registered, applied for regular registration under Section 12AB. Its first application (Form 10AB, 30.05.2024), filed within the extended due date, was rejected due to an inadvertent error in selecting the sub-clause. A subsequent application was also rejected by the CIT(E) for being beyond the due date and incomplete, despite the CIT(E)'s own findings acknowledging the trust's charitable activities since AY 2022-23.
Held
The Tribunal held that the error in clause selection was a procedural defect and not a substantive non-compliance, noting the first application was timely. It found the CIT(E)'s rejection inconsistent with its own factual findings on the trust's activities. The CIT(E)'s order was set aside, and the CIT(E) was directed to grant registration under Section 12AB, treating the application as validly made within time and under the appropriate clause.
Key Issues
Whether the application for registration under Section 12AB should have been rejected due to an inadvertent error in clause selection and alleged delay, despite the application being filed within the extended due date and the trust's activities having commenced.
Sections Cited
12AB, 12A(1)(ac)(vi), 12A(1)(ac)(ii), 12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, “F” BENCH MUMBAI
Before: SMT. BEENA PILLAI & SHRI MAKARAND VASANT MAHADEOKAR
आदेश / ORDER
PER MAKARAND VASANT MAHADEOKAR, AM:
This appeal by the assessee is directed against the order dated 26.06.2025 passed by the Commissioner of Income Tax (Exemption), Mumbai [hereinafter referred to as “the CIT(E)”] under section 12AB(1)(b)(ii)(B)(I) of the Income-tax Act, 1961[hereinafter referred to as “the Act”].
Fatema Charitable Trust 2. The brief facts of the case are that the assessee is a trust settled on 24.12.2013 and registered under the Maharashtra Public Trusts Act, 1950 on 09.05.2014. It is engaged in providing assistance for educational and medical purposes to poor and needy persons. The assessee was granted provisional registration under section 12A(1)(ac)(vi) vide Form 10AC dated 08.02.2022, valid from AY 2022-23 to 2024-25.CBDT Circular No. 7/2024 extended the due date for filing Form 10AB up to 30.06.2024.The assessee filed Form 10AB on 30.05.2024 seeking regular registration. Due to an inadvertent error, it selected section 12A(1)(ac)(ii) instead of 12A(1)(ac)(iii).The CIT(E) rejected this application vide order dated 09.11.2024.After rejection of the first application, the assessee filed a second Form 10AB on 31.12.2024.The CIT(E), vide order dated 26.06.2025, passed under section 12AB(1)(b)(ii)(B)(I), rejected this application on the ground that it was filed beyond the prescribed due date.The CIT(E), also recorded that the Form 10AB application was incomplete and the assessee did not furnish the documents required under Item 17A of Form 10AB.
Aggrieved by the order of CIT(E), the assessee is in appeal before us raising following grounds of appeal:
1. On the facts and in circumstances of the case as well as law, the ld. CIT (Exemption) erred in rejecting assessee's application made under S. 12A(1)(ac)(iii) of the Income Tax Act, 1961 on the ground that the application has not been filed before the due date.
2. Ld. CIT (Exemption) failed to appreciate that the original application in form 10AB which was filed well within the extended period and Fatema Charitable Trust was rejected by him merely for a small typo error in mentioning the clause of S. 12A(1)(ac).
3. Ld. CIT (Exemption) failed to appreciate that the fresh application in form 10AB filed immediately after receipt of the rejection order in respect of the original application should have been treated as filed on the date of original application and thus should have been treated as filed in time.
4. Ld. CIT (Exemption) has failed to appreciate the fact that the applicant is an old Trust incorporated in the year 2013 for providing medical and educational help to poor and needy persons and denying registration under S. 12A(1)(ac)(iii) would only frustrate the cause of charity.
5. Ld. CIT (Exemption) erred in recording an incorrect finding that the appellant trust has been undertaking charitable activities since AY 2022-23. Ld. CIT (Exemption) failed to appreciate that the appellant trust is already in existence for more than a decade and is engaged in providing assistance for medical and educational purposes to the poor and needy persons.
6. Without prejudice, there being no objection on merit of the case, the CIT (Exemption) should have allowed the registration at least from the date of fresh application. Prayer: 7. The appellant beg the Hon'ble Tribunal for pardon and pray the Hon'ble bench of the Income Tax Appellate Tribunal to condone the delay and direct the Ld. CIT (Exemption) to grant the approval under S. 12A(1)(ac)(iii) of the Income Tax Act, 1961 with effect from 01/04/2024 or from the date of application as the Hon'ble Tribunal may deem fit.
During the course of hearing before us, the learned Authorized Representative (AR) reiterated the facts and submitted that the first application dated 30.05.2024 was filed within the extended due date and contained only a typographical error in clause selection and the fresh application dated 31.12.2024 was filed immediately after the rejection order of 09.11.2024. The AR submitted that the trust has been carrying out charitable Fatema Charitable Trust activities since 2013-14, and the CIT(E)’s contrary observation is erroneous. The AR pleaded that the mistake was inadvertent and technical, and the assessee should not be denied registration on such procedural grounds.
The learned Departmental Representative supported the order of the CIT(E).
We have carefully considered the rival submissions and examined the material available on record, including the order dated 26.06.2025 passed by the CIT(E). It is an undisputed fact that the assessee filed its first Form 10AB application on 30.05.2024, a date falling within the extended due date permitted by CBDT Circular No. 7/2024. The assessee’s explanation that an incorrect clause was selected due to inadvertent error is supported by the subsequent conduct of filing a second application immediately after the rejection order dated 09.11.2024. The record further demonstrates that the assessee furnished replies to notices issued by the Ld. CIT(E), including submissions on 15.04.2025, 05.04.2025, and a detailed response dated 10.06.2025, in which the assessee addressed the deficiencies pointed out. Nothing in the impugned order suggests that the Ld. CIT(E) doubted the objects or genuineness of activities of the trust.
On the contrary, the CIT(E)’s own findings record that the assessee is an existing trust that had already been granted provisional registration vide Form 10AC dated 08.02.2022 for AY Fatema Charitable Trust 2022–23 to AY 2024–25. More significantly, at paragraph 3 of the impugned order, the CIT(E) expressly states that “as per the financials submitted by the assessee, the applicant Trust has been carrying out charitable activities since AY 2022–23.” This factual finding not only affirms the operational existence of the trust but also reinforces that the assessee falls within the scope of section 12A(1)(ac)(iii), which applies to trusts whose activities have commenced. Once the CIT(E) himself acknowledges commencement of activities, the correct statutory provision governing regular registration stands identified, and the error in clause selection in the first application assumes the character of a mere procedural defect rather than a substantive non- compliance.
Despite this, the rejection was premised on the grounds that the application was filed under the wrong clause and beyond the prescribed time. However, having regard to the CIT(E)’s own admission that the trust had commenced activities since AY 2022–23, the prescribed timeline must necessarily align with the statutory framework applicable to regularization of commenced activities. The assessee’s Form 10AB application dated 30.05.2024 was filed within the extended time allowed by CBDT, and the incorrect clause selection does not, in such circumstances, legally invalidate an otherwise timely application. The CIT(E)’s observation that the trust should have filed the application “latest by September 2023” is inconsistent with his own factual finding regarding the trust’s commencement of Fatema Charitable Trust activities, and also with the extended statutory timeline. Taken together, these internal inconsistencies in the CIT(E)’s order weaken the foundation on which the rejection was based.
Having regard to the totality of facts, including the CIT(E)’s own recorded findings that the assessee is an existing trust which has been carrying out charitable activities since AY 2022–23, the long-standing existence of the trust, the nature and genuineness of its charitable activities, and the fact that the defect in the original Form 10AB application was purely technical and not substantive, we are of the considered view that the assessee’s application cannot be rejected on the ground of an inadvertent clause selection or alleged delay. The first application dated 30.05.2024 was filed within the extended time permitted by CBDT Circular No. 7/2024, and, in the facts of the present case, the said application is required to be treated as having been filed under the correct statutory clause applicable to a trust whose activities have commenced.
Accordingly, the impugned order passed by the CIT(E) is set aside, and the CIT(E) is directed to grant the registration to the assessee under section 12AB, if otherwise admissible in law, by treating the application as validly made within time and under the appropriate clause of section 12A(1)(ac). The assessee shall furnish any remaining documents, if required, and the CIT(E) shall complete the consequential formalities without revisiting the technical objections on which the registration was earlier denied.
Order pronounced in the open court on 08.12.2025.