SHREE GURUDEV DATTA MANDIR TRUST ,MUMBAI vs. ITO WARD 2(3), MUMBAI

ii. The assessee was under impression that the application for final registration has to be made at the end of provisional registration. iii. The assessee instead of applying by 30.09.2023 i.e. within six months from the start of activities but had applied on 28.09.2024. iv. The assessee submits that owing to the confusion in the interpretation of relevant laws, procedural error committed may please be condoned.

C. The Appellant therefore prays that order rejecting the application u/s 12AB of the Act may please be squashed.

The appellant craves leave to add to, alter, and or amend the above grounds of appeal.”

“Where the application is filed beyond the time allowed in sub clauses (i) to (vi), the Principle Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within the time.”

8. Thus, the above provision has given power to the Principle Commissioner or Commissioner to condone the delay and also section 119 of the Act empowers the CBDT to issue orders and instructions to subordinate income tax authorities regarding condonation of delay to the tax payers who have missed statutory deadlines due to genuine hardship. Since the Parliament has already granted the power to the PCIT /CIT for condonation of delay, there is no need of approaching the CBDT for condonation of delay u/s 119 of the Act. Moreover considering the submission of the assessee, we are convinced that the assessee has filed the application before the expiry of 6 months of the provisional registration i.e. before AY 2025-26.

9. We have now to consider whether the assessee has made out a sufficient cause for condonation of delay before the Ld. CIT(E). The Ld. CIT(E) has recorded the reasons in para no. 4 and 4.1 of its order which are extracted below:-

“4. In response, the applicant made submission vide letter dated 07.03.2025. The applicant's reply is carefully perused. In response to the delay in filing Form 10AB, the applicant has admitted that the Trust must apply for regular registration at least six months before the expiry of the provisional registration or within six months of commencement of activities, whichever is earlier. The applicant has stated that due to lack of awareness and due to absence of proper professional guidance the applicant did not file the application within the required timeframe. As the trust is very old and was incorporated in 1979 and knows the rules and Regulations of the I.T. Act very well. Therefore, the reason of 'Lack of awareness and absence of proper professional guidance' is not tenable.

4.1 It is appropriate to mention that the due date of filing application on or before 30.06.2024 as per the Circular 7 was an extension provided by the board to all the Trust/Institution to file/re-file their applications under certain conditions. But the trust has not availed the benefit of the same. Further, the applicant has not been able to show any reasonable cause for delay or to establish that the applicant trust had genuine hardship in filing of the application within the due date. In absence of a reasonable cause of delay the request of the applicant for grant of registration in not acceptable.”

10. We have noticed that the reasons given by the assessee before the Ld. CIT(E) statesdue to lack of awareness and due to absence of proper professional guidance, the assessee did not file the application within the required timeframe. Ld. CIT(E) dismissed the said plea of assessee on the ground that the trust is very old and was incorporated in 1979 and knows the rules and Regulations of the Income Tax Act very well, therefore, the reason of 'Lack of awareness and absence of proper professional guidance' is not tenable. We are not convinced by the above reasoning and are of the considered opinion that without appreciating the reasons given by the assessee and rejecting the application by the Ld. CIT(E) has resulted into miscarriage of justice. Moreover the principle of natural justice has not been followed by Ld. CIT(E) as the material submitted by the assessee was not considered in an objective manner. In the given facts and circumstances, a more holistic approach was required to be adopted by the Ld. CIT(E). Our view is fortified by the recent pronouncement of Ld. Coordinate Bench on identical issue in order dated 30.09.2025. Para 7.3 onward is relevant and extracted below:-

“7.3 Coming to the main question/issue posed “as to whether the Assessee is entitled to get the deduction claimed on the basis of Form10-B filed belatedly”, we observe that various High Courts including the Hon'ble Gujarat High Court in the aforesaid case, also dealt with identical issue, wherein there was a delay in filing of Form 10B and, therefore, the claim of the Assessee u/sec. 11 of the Act was denied. The Hon'ble High Court by analyzing various judgments of the Hon’ble High Courts ultimately held “that filing of audit report is held to be substantive requirement but not the mode and stage of filing, which is procedural. Once the audit report in Form 10B is filed to be available with the Assessing Officer, before assessment proceedings take-place, the requirement of law is satisfied”.

"That in the cases of delay in filing form 10B the approach of the authorities ought to be equitious, balancing and judicious. Further, availing of exemption should not be denied merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. This Court in CIT Vs. Gujarat Oil and Allied Industries Ltd. (1993) 201 ITR 325 (Guj.) has also held that provision regarding furnishing of audit report with the return has to be treated as a procedural proviso. It is directory in nature and its substantial compliance would suffice. Benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the Assessee to produce the audit report at a later stage either before the Income Tax Officer or before the appellate authority by assigning sufficient cause".

The Hon'ble Gujarat High Court by taking cognizance of the fact and the decision in the case of Sarvodaya Charitable Trust case (supra) approved the decision of the Tribunal in following the judgment in the case of Social Securities Scheme of GICEA Vs. Commissioner of Income Tax (Exemption), Ahmedabad dated 21.12.2022 in Special Civil Application No.17612 of 2022}, wherein it has been held as under:

"That though filing of audit report is mandatory in nature and substantial compliance is required to be made, however, furnishing of audit report along with return filed, is to be treated as a procedural requirement".

12. Thus, on the aforesaid analyzations, the question posed is answered in "affirmative" and consequently, we direct the AO to consider Form no.10B filed by the Assessee, as valid and verify the facts and determine the tax liability qua deduction/exemption claimed by the Assessee u/sec. 11 of the Act as per law.”

11. For the above discussion, we are of the considered opinion that the assessee has sufficient cause for condonation of delay on merit in view of contents of the application seeking regularisation of the provisional registration. Therefore, the impugned order is not sustainable and is accordingly set aside. Accordingly, matter is restored to the file of Ld. CIT(E) for considering the application on merit after giving proper opportunity of hearing to the assessee and decide the matter de novo. The appellant/assessee shall present its case before the Ld. CIT(E) within 60 days of this order and furnish the necessary documents.

Order pronounced in the open court on 13.10.2025.