CUTCHI MEMON TENEMENT BOARD,MUMBAI vs. CIT (EXEMPTIONS), MUMBAI, MUMBAI

Briefly stated, the assessee had obtained provisional registration under section 12AB of the Act vide Form No. 10AC dated 04.04.2022, which was valid from assessment year 2022-23 to assessment year 2024-25. The assessee thereafter filed an application in Form No. 10AB on 29.09.2025 seeking regularisation of the provisional registration. The learned CIT(E), on examination of the application, noted that the assessee had commenced its activities and, therefore, in terms of section 12A(1)(ac)(iii) of the Act, the application was required to be filed within the prescribed period. According to the learned CIT(E), the application ought to have been filed by the end of October 2022, whereas the same was filed only on 29.09.2025, involving a delay of more than 34 months. The learned CIT(E), accordingly, rejected the application primarily on the ground of delay in filing Form No. 10AB.

Before us, the learned Authorised Representative (“the learned AR”) submitted that the delay in filing Form No. 10AB deserves to be considered in the light of the changes brought about in the statutory provisions governing provisional registration and regularisation under section 12AB of the Act. The learned AR submitted that the assessee had obtained provisional registration under section 12AB and was under a bona fide belief that such provisional registration was sufficient compliance for availing the benefit of exemption under section 11 of the Act and, therefore, there was no immediate requirement to file Form No. 10AB for regularisation. It was further submitted that the changes introduced in the statutory provisions governing provisional registration and the requirement of filing Form No. 10AB resulted in some confusion regarding the requirement of filing the application for regularisation and the time within which such application was required to be filed. The learned AR contended that the delay was thus neither deliberate nor intentional, but arose on account of the aforesaid bona fide belief and the confusion caused by the changes in the statutory regime. The learned AR further relied upon three decisions of the co-ordinate Benches of the Tribunal at Mumbai, namely, Sunder Nagar Satsang Sabha v. Commissioner of Income-tax (Exemptions), 182 taxmann.com 613, dated 19.01.2026; Saarth Pratishthan v. Commissioner of Income-tax (Exemptions), 185 taxmann.com 331, dated 27.03.2026; and Cartrade Foundation v. Commissioner of Income-tax (Exemptions), 184 taxmann.com 159 dated 27.02.2026. According to the learned AR, in all the aforesaid cases, the delay in filing Form No. 10AB was condoned and the matters were restored to the file of the learned CIT(E) for adjudication of the applications for registration on merits. Relying upon the aforesaid decisions and the explanation furnished for the delay, the learned AR prayed that the delay in filing Form No. 10AB be condoned and the matter be restored to the file of the learned CIT(E) for consideration of the application for registration on merits.

The learned Departmental Representative (“the learned DR”), on the other hand, supported the order passed by the learned CIT(E) and submitted that the application in Form No. 10AB had admittedly been filed beyond the period prescribed under section 12A(1)(ac) of the Act. It was accordingly submitted that the learned CIT(E) was justified in rejecting the application on the ground of delay.

We have considered the rival submissions and perused the material available on record. We have also carefully considered the three decisions relied upon by the learned AR, namely, Sunder Nagar Satsang Sabha, Saarth Pratishthan and Cartrade Foundation. We find that, in all the aforesaid cases, the co-ordinate Benches considered the issue of delayed filing of Form No. 10AB in the context of the statutory provisions applicable to provisional registration and, having regard to the circumstances of the respective cases, condoned the delay and directed the learned CIT(E) to adjudicate the applications for registration on merits. The learned AR has specifically relied upon these decisions in support of the contention that the delay in the present case also deserves to be condoned and that the application should thereafter be considered on merits.

In the present case, the explanation advanced by the learned AR is that the assessee was under a bona fide belief that the provisional registration already granted under section 12AB was sufficient compliance for availing the benefit of exemption under section 11 of the Act and, therefore, that there was no immediate requirement to file Form No. 10AB for regularisation. The learned AR has further submitted that the changes brought about in the statutory provisions governing provisional registration and regularisation created some confusion regarding the requirement of filing Form No. 10AB and the time within which such application was required to be filed. We find that this explanation has to be considered in the context of the statutory transition relating to provisional registration and subsequent regularisation. The assessee had admittedly obtained provisional registration and thereafter did file Form No. 10AB seeking regularisation thereof, though belatedly. Thus, the conduct of the assessee, as placed before us, indicates that it ultimately approached the Department seeking regularisation of the provisional registration. Having regard to the explanation furnished by the learned AR regarding the bona fide belief entertained by the assessee and the confusion arising from the changes in the statutory provisions, we are of the considered view that the delay deserves to be condoned.

We also find that the approach adopted by the co-ordinate Benches in the three decisions relied upon by the learned AR supports the course of action sought by the assessee in the present case. Since the delay in all the aforesaid cases was condoned and the matters were thereafter restored to the file of the learned CIT(E) for consideration of the respective applications on merits, we see no reason to adopt a different approach in the present case, particularly when the explanation furnished by the learned AR is founded upon a bona fide belief regarding the sufficiency of provisional registration and the confusion arising from the changes in the statutory provisions. The question of condonation of delay is required to be considered in a manner consistent with the statutory scheme and the circumstances of the case. In the facts before us, we are satisfied that the explanation furnished by the learned AR constitutes sufficient basis for condoning the delay in filing Form No. 10AB.

We further note that the learned CIT(E) has rejected the application essentially on the ground of delay in filing Form No. 10AB and has not adjudicated the assessee's eligibility for registration under section 12AB on merits. The impugned order, therefore, does not contain any adjudication on the objects of the assessee-trust, the genuineness of its activities or the other substantive requirements relevant for determining its eligibility for registration. Once the delay is condoned, the application is required to be considered by the competent authority on its merits. It would, therefore, be appropriate to restore the matter to the file of the learned CIT(E) for such consideration.

Accordingly, respectfully following the aforesaid three decisions of the co-ordinate Benches relied upon by the learned AR and considering the bona fide explanation furnished by the learned AR, we condone the delay in filing Form No. 10AB. Consequently, the impugned order passed by the learned CIT(E) is set aside and the matter is restored to his file for adjudication of the assessee's application for registration under section 12AB on merits. The learned CIT(E) shall examine the application in accordance with the applicable provisions of law and consider the objects of the assessee-trust, the genuineness of its activities and such other statutory requirements as may be relevant for determining its eligibility for registration under section 12AB of the Act.

Needless to say, the learned CIT(E) shall afford reasonable and effective opportunity of being heard to the assessee and shall consider such documents, explanations and other material as may be furnished by the assessee in support of the application. The learned CIT(E) shall thereafter pass a speaking and reasoned order in accordance with law. We make it clear that, having condoned the delay and restored the matter for consideration on merits, we have not expressed any opinion on the merits of the assessee's application for registration under section 12AB. All issues relating to the eligibility of the assessee for registration are left open for consideration by the learned CIT(E).

In the result, the appeal of the assessee is allowed for statistical purposes.