ASHU SHAH CANCER FOUNDATION,BENGALURU vs. COMMISSIONER OF INCOME TAX (EXEMPTION), BENGALURU

This appeal is filed by Ashu Shah Cancer Foundation [the assessee/Appellant/Trust] against the order dated 20-03-2021 passed by the Commissioner of Income Tax (Exemption) under section 12AA(1)(b)(ii) of the Income Tax Act, 1961 [the Act], rejecting the assessee trust’s application for registration under section 12A filed on 19.09.2020. 2. The Assessee has raised the following grounds of appeal:

The appellant is a registered trust located at D3, Oriental Garden, behind IOC Petrol Bunk, Konankunte Cross, Kanakapura Road, Bengaluru 560062, Karnataka. It applied for provisional registration under section 12A on 19.09.2020. The Appellant Trust carries out charitable healthcare activities in Bangalore, including free health camps, cancer awareness and early-detection programmes, donation of chemotherapy medicines, and free oncology surgeries for underprivileged patients. During the pandemic, it also distributed masks and relief kits, facilitated plasma donations, and offered free medical consultations, thereby advancing its charitable medical-relief objectives.

As in this case the order is passed on 20th March 2021 however the appeal is filed before us on 26th of February 2026 and thus the appeal is delayed by 1731 days.

The assessee seeks condonation on the ground that, after the rejection under section 12AA on 20.03.2021 for AY 2022-23, it bona fide believed that the proper remedy was to file a fresh application under section 12A (1) (ac)(i), which was later approved by the CIT(E), rather than to prefer an appeal. On subsequent professional advice, the assessee learnt that an appeal ought to have been filed. The delay was therefore unintentional and arose from a procedural misunderstanding, not negligence. The assessee requests that the delay be condoned and the appeal admitted on merits, as refusal would cause serious hardship without prejudicing the Department. Reliance is placed on Collector, Land Acquisition v. Mst. Katiji, Concord of India Insurance Co. Ltd. v. Nirmala Devi, Mela Ram & Sons v. CIT, and CIT v. West Bengal Infrastructure Development Finance Corp.

The learned authorized representative, along with the doctor-trustee of the Trust, explained the reasons for the delay as stated above. The assessee reiterated that the delay arose from a bona fide mistaken belief and was supported by sufficient cause; accordingly, it prayed that the delay be condoned and the appeal admitted.

The learned CIT-DR, Shri Somnath S. Ukkali, submitted that the delay was extraordinary and unsupported by sufficient cause, and therefore should not be condoned.

We have carefully considered the rival submissions and perused the reasons stated by the assessee in the condonation petition. We find that the assessee was under a bona fide misunderstanding regarding the remedy against the CIT(E)’s rejection order. Believing that the appropriate course was to file a fresh application under section 12A (1) (ac)(i), the assessee did so, and the said application was subsequently approved. Only upon obtaining professional advice did the assessee realize that an appeal ought to have been filed within the prescribed time. Thus, the delay was neither deliberate nor attributable to negligence but arose from an inadvertent procedural misunderstanding while the assessee acted bona fide and pursued the matter diligently. On these facts, we are satisfied that the delay in filing the appeal was supported by sufficient cause. Accordingly, the delay is condoned, and the appeal is admitted for adjudication on merits. 9. The Ld. CIT(E) rejected the application on the ground that, despite applying under section 12A on 19.09.2020, the Trust did not furnish the information called for by letter dated 10.02.2021, including trustee details, evidence of activities, relevant trust deed clauses, financial statements, bank and address details, approvals, institutional particulars, confirmation that it had no religious objects, and details of outstanding demands. In the absence of these records, the CIT(E) held that the genuineness of the Trust’s objects and activities could not be verified. Since no response was filed by 19.02.2021, the CIT(E) held that the non-compliance prevented verification and reflected a lack of seriousness. Relying on Ganjam Nagappa and Son Trust v. DIT(E), DBA Institution, and Self Employers Institution v. CIT, he noted that registration under section 12AA is not automatic and may be denied where charitable activities are not substantiated. Applying the maxim “Vigilantibus non dormientibus jura subveniunt,” he rejected the application under section 12AA. 10. Aggrieved, the assessee contends that the notice dated 13.02.2021, issued during the COVID-19 crisis, granted only one week for compliance and was not formally served on the trustees. The trustees, being frontline medical professionals on emergency COVID duty, were unaware of the notice and could not respond, which constituted reasonable cause. It is submitted that the ex parte order, passed without adequate opportunity, enquiry, or show-cause notice, violated the principles of natural justice. The appellant further states that, due to a bona fide clerical error, it selected section 12A (1) (ac)(i) instead of section 12A (1) (ac)(vi), and therefore seeks remand for rectification, proper hearing, condonation of the technical error, and grant of registration under section 12A. During the hearing, the trustees appeared and explained the reasons for non-compliance before the CIT(E). The doctor-trustee stated that the Trust is ready to furnish all information required by the CIT(E), who may examine the same and conduct any necessary enquiry before deciding the registration application. 11. The learned CIT-DR submitted that the application was rejected principally because the assessee failed to comply with the requirements for registration under section 12A of the Act. In the absence of the required details, CIT(E) could not verify the claim or grant registration. He further submitted that he had no objection if the matter was restored to the file of the CIT(E), with an opportunity to the assessee to furnish the required information for verification. 12. We have carefully considered the rival submissions and perused the order of the learned CIT(E), who rejected the assessee’s application because the information required for examining its registration under section 12A of the Act was not furnished. In the absence of such information, CIT(E) could not have granted registration. However, the details were called for during the difficult COVID-19 period and only one week was granted for compliance. The trustee, who is herself a doctor, explained that the Trust’s staff and doctors were then engaged as frontline workers in saving lives. She also placed before us the work undertaken by the Trust during that period. Although there was no compliance by the assessee, the circumstances show reasonable cause. We therefore find that the assessee deserves one more opportunity to furnish the required details before the learned CIT(E). 13. In view of the above, we restore the matter to the file of the learned CIT(E) with directions to the assessee to furnish all details called for earlier, along with any further information that may be required. The learned CIT(E) shall thereafter decide the issue of registration in accordance with law, after granting the assessee a proper opportunity of being heard. 14. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 24.07.2026.