SHRI BHAVODADHI-TARAK SHWETAMBER MURTIPUJAK TAPAGACHH JAIN RELIGIOUS TRUST,BYCULLA, MAZGAON vs. CIT EXEMPTION, CUMBALLA HILL PEDDER ROAD

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ITA 2177/MUM/2026Status: DisposedITAT Mumbai10 August 20268 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) had not examined the explanation for the delay and the supporting affidavit provided by the assessee. Therefore, the matter was restored to the CIT(E) to decide on the condonation of delay and then, if condoned, to examine the application on merits.

What were the facts?

The assessee, a charitable trust, had its application for regular registration under section 12AB rejected by the CIT(E) primarily due to a delay in filing the application. The trust attributed the delay to erroneous professional advice.

What were the issues?

Whether the delay in filing the application for regular registration under section 12AB was supported by reasonable cause, and if so, whether the registration should be granted on merits.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12A(1)(ac)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI PAWAN SINGH

For Appellant: Shri Krish Desai, CA
For Respondent: Shri Basavaraj Hiremath, CIT DR
Hearing: 24/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER)

ITA No. 2177/MUM/2026 Assessment Year: 2025-26

Shri Bhavodadhi Tarak CIT(Exemption), Room No.601, Shwetamber Murtipujak 6th Floor, Cumballa Hill, MTNL Tapagachi Jain Religious Vs. TE Building, Pedder Road, Dr Trust, Flat No.305, 3rd Floor, Gopalrao Deshmukh Marg, Vimalchand Building, Byculla, Cumballa Hill, Mumbai – Mazgaon, S.O., Mumbai – 400026. 400010, Maharashtra. PAN NO. AAYTS 9074 N Appellant Respondent

Assessee by : Shri Krish Desai, CA Revenue by : Shri Basavaraj Hiremath, CIT DR

Date of Hearing : 24/07/2026 : 10/08/2026 Date of pronouncement

ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 23/12/2025 read with corrigendum/amendment dated 24/12/2025 passed by the Ld. Commissioner of Income-tax (Exemption), Mumbai [in short ‘the Ld. CIT(E)’], wherein the application of the assessee seeking regularisation of registration in

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u/s 12AB of the Income-tax Act, 1961 (in short the Act) came to be rejected.

2.

The assessee has raised the following grounds of appeal:

1.

On the facts and in the circumstance of the case and in law, the CIT(E) erred in not granting registration to the Appellant u/s 12AB pursuant to application under section 12A(1)(ac)(iii) of the Act contrary to the specified violation provided in the Explanation to sub-section (4) of section 12AB of the Act. 2. The Appellant prays that it be held the action of the CIT(E) is contrary to the ‘specified violation’ provided under the Explanation to section 12AB(4) of the Act and as such the same may be deleted and the Appellant be granted registration u/s 12AB of the Act. 3. On the facts and in the circumstance of the case and in law, the CIT(E) erred rejecting the application for registration under section 12AB of the Act on the ground that the application for registration made u/s 12A(1)(ac)(iii) was filed belatedly; and, the cause submitted by the Appellant for delay in filing the application is not ‘reasonable cause’. 4. The Appellant prays that it be held the action of the CIT(E) be deleted and registration be granted to it. 5. The Appellant craves leave to add to, alter, amend and / or vary all or any of the foregoing grounds of appeal. 3. Briefly sated facts of the case are that the assessee is a public charitable trust. It was granted provisional registration under section 12AB vide order dated 23.09.2021 in Form No. 10AC, valid from Assessment Years 2022-23 to 2024-25.

3.1 On 18.11.2024, the assessee filed Form 10AB seeking regularisation of the provisional registration, invoking item (B) of sub-clause (vi) of clause (ac) of section 12A(1). This application was

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rejected on 23.06.2025 on the short ground that it had been filed under the wrong limb of section 12A(1)(ac)

3.2 During the pendency of the said proceedings, the assessee filed a second application on 16.06.2025, this time correctly invoking sub-clause (iii) of clause (ac) of section 12A(1) i.e. the provision applicable to a trust already holding provisional registration seeking regularisation thereof.

3.3 The aforesaid second application of the assessee has been rejected by the CIT(E) by the impugned order dated 23.12.2025 read with corrigendum dated 24.12.2025, principally on the ground that it had been filed beyond the time prescribed under section 12A(1)(ac)(iii), holding that the delay of more than thirty-eight months was not supported by any reasonable cause.

3.4 Section 12A(1)(ac)(iii) requires an application for regularisation to be filed "at least six months prior to expiry of the period of provisional registration or within six months of commencement of its activities, whichever is earlier." The Ld. CIT(E) observed that the assessee had commenced its activities after obtaining provisional registration on 23.09.2021 and, therefore, in terms of section 12A(1)(ac)(iii), the application for regular registration ought to have been filed within six months from the commencement of such activities. According to the Ld. CIT(E), the application filed on 16.06.2025 was delayed by more than 38 months.

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3.5 The explanation furnished by the assessee dated 24.11.2025 that it was under a bona fide belief that the application was required to be filed before the expiry of the provisional registration and that the delay occurred due to "lack of knowledge and necessary professional guidance" and the "complexity of the legal provision " was not accepted as constituting "reasonable cause".

3.6 The Ld. CIT(E) further observed that despite various relaxations and condonation measures issued by the CBDT, including Circular No.7 of 2024 dated 25.04.2024, the assessee had failed to avail the benefit thereof within the stipulated period. Holding that timely filing of Form No.10AB is a substantive statutory requirement, the Ld. CIT(E.) rejected the application without proceeding to examine the assessee's eligibility for registration on merits.

4.

The ld Counsel for the assessee submitted that the rejection rests solely on the question of limitation and not on the genuineness of the objects or activities of the trust. He submitted that the assessee is a charitable trust guided by a professional tax consultant, and that the delay and the initial filing under the wrong limb of section 12A(1)(ac) were attributable entirely to erroneous professional advice and not to any negligence, mala fide, or want of bona fides on the part of the trust itself. The learned It was

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contended that the delay was neither deliberate nor attributable to any mala fide conduct.

4.1 It was submitted that by the Finance (No. 2) Act, 2024, the first proviso to clause (ac) of section 12A(1) has been amended to empower the Principal Commissioner/Commissioner to condone delay in filing an application under sub-clauses (i) to (iii) and (v) to (vi), where he is satisfied that there existed "reasonable cause" for such delay. It was submitted that the expression "reasonable cause" is not defined under the Act and must be construed liberally, in consonance with settled judicial interpretation, relying upon:

4.2 The learned Counsel further relied upon an affidavit of the Chartered Accountant, sought to be admitted as additional evidence, wherein it has been categorically affirmed that the assessee had entrusted the entire registration process to the tax consultant; that the consultant had advised filing the application six months before expiry of the provisional registration instead of within six months of commencement of activities; and that the first application was also filed under an incorrect statutory provision on the basis of the same professional advice. It was thus contended that the delay as well as the filing under an incorrect provision resulted from erroneous professional advice and not from any deliberate disregard of the statutory provisions. It was accordingly prayed that the matter be restored to the file of the Ld. CIT(E) for

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adjudication on merits after considering the affidavit and all supporting material.

4.3 The learned Departmental Representative supported the impugned order. However, he fairly did not dispute that the assessee had subsequently furnished further explanation along with supporting material, including the affidavit relied upon before us.

5.

We have carefully considered the rival submissions and examined the material available on record. A perusal of the impugned order shows that the application has been rejected solely on the ground of delay in filing Form No.10AB. The Ld. CIT(E.) has not recorded any adverse finding regarding the charitable objects of the trust, the genuineness of its activities or compliance with other statutory requirements governing grant of registration under section 12AB.

5.1 Before us, the assessee has placed on record an affidavit of its Chartered Accountant explaining the circumstances leading to the delayed filing as well as the filing of the first application under an incorrect statutory provision. The affidavit specifically states that the delay occurred on account of erroneous professional advice regarding both the applicable provision and the prescribed limitation. The explanation, if found to be correct upon verification, has a direct bearing on the question whether the assessee had

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established "reasonable cause" within the meaning of the proviso empowering condonation of delay.

5.2 Since this material was not examined by the Ld. CIT(E.) while deciding the application, and having regard to the fact that the rejection is founded exclusively on limitation without examination of the assessee's entitlement on merits, we consider it just and appropriate, in the interest of substantial justice, to restore the matter to the file of the Ld. CIT(E.).

5.3 The Ld. CIT(E.) shall first examine the explanation for delay, including the affidavit and other supporting material relied upon by the assessee, and determine, in accordance with law, whether the assessee has established reasonable cause warranting condonation of delay. If the delay is condoned, the Ld. CIT(E.) shall thereafter examine the assessee's application for registration on its own merits, including the objects of the trust, the genuineness of its activities and fulfilment of all statutory conditions prescribed under section 12AB, by passing a reasoned and speaking order after affording adequate opportunity of hearing to the assessee.

5.4 It is clarified that we have expressed no opinion on the merits of the assessee's eligibility for registration under section 12AB, and all issues are left open for adjudication by the Ld. CIT(E.) in accordance with law.

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6.

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

Order pronounced in the open Court on 10/08/2026.

Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 10/08/2026 M. Ranganath Vittal, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

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