ARTISTS CENTRE,MUMBAI vs. ITO EXEMPTIONS, MUMBAI

PER SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: These two appeals are filed by assessee against different orders of the Learned Commissioner of Income-tax (Exemptions), Mumbai [“Ld. CIT(E)”], dated 27.08.2026 in denying the registration u/s 12AB and approval under Section 80G of the Act.

“1.1 The Ld. CIT(E) has erred both in law and in facts in rejecting the application of the appellant in Form 10 AB for regularization of provisional Registration u/s 12AB of the Income Tax Act, 1961 on the ground that, applicant trust/institution has exhibited a casual and indifferent approach towards its statutory obligations under the Income Tax Act. The order passed is arbitrary, unjustified, and contrary to the principles of natural justice. That the Appellant Trust was under the genuine and bona fide belief that the provisional registration granted earlier constituted the final registration under. Section 12AB of the Income Tax Act. The Trustees, being not legally qualified and not well-versed in the intricate technicalities of the newly amended tax laws, acted under the impression that no further immediate action was required once the provisional certificate was received. That the learned authority failed to appreciate that the Trustees are primarily engaged in social/charitable activities and were unaware of the specific timelines and the distinction between provisional and permanent registration. It is a settled principle that for a lapse of a technical or procedural nature, a charitable institution should not be deprived of its substantive benefit of exemption. The Ld. CIT(E) has erred in passing the order rejecting the application for registration u/s 12AB without considering the fact that, the Appellant Trust has consistently complied with its charitable objects and utilized its income solely for the purposes for which it was established. The failure to apply for "regular registration" was a venial procedural lapse and not a deliberate defiance of the law. There was a complete change in the Board of Trustees during the intervening period. The incoming Trustees were under the impression that the outgoing management had fulfilled all statutory requirements and that the Trust possessed a valid, subsisting registration. The lack of proper handover of compliance calendars contributed to the delay. 1.2 The learned CIT(E) passed the order without providing a reasonable and sufficient opportunity to the appellant to represent its case or to clarify the queries raised, thereby violating the principles of natural justice. The Ld. CIT(E) ought to have issued show cause notice, seeking explanation from the appellant trust, regarding failure to comply with provisions of law before issuing the Order rejecting the Application for Regularization of registration u/s. 12AB of the Income Tax Act, 1961.

1.3. The delay in submission of the Application for the for registration u/s 12AB of the Act may be Condoned and the Ld. CIT (E) be directed to Grant the Registration to the Appellant Trust u/s 12AB of the Act.” 3. Learned counsel for the assessee, at the outset, submitted that the application for registration u/s 12A was denied for the reason that the assessee filed application for registration u/s 12AB beyond the expiry of 06 (six) months period of provisional registration and with a delay of more than 28 months and therefore the same is not valid. Ld. Counsel further referring to the order passed by the Ld. CIT(E) stated that it is the observation of the Ld. CIT(E) that the assessee also did not avail the extended period of time as notified by the C.B.D.T. Ld. Counsel for the assessee submitted that as per 3rd proviso to Section 12A(1) of the Act if the assessee filed an application for registration u/s 12AB beyond the time limit specified, the Principal Commissioner or Commissioner can condone the delay if the assessee was prevented with reasonable cause for the delay in filing the application and therefore an opportunity be given to the assessee to explain the delay.

Order pronounced in the open court on 17 /07/2026

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 17/07/2026 Kunal Copy to: Artists Centre, C/o. Kala Ghoda Association, C/o. ATE Enterprises, Dr. V.B. Gandhi Marg, 1 Fort, Mumbai-400023, Maharashtra

CIT (EXEMPTIONS), Room No. 601, 6th Floor, Cumballa Hill MTNL TE Building, Pedder Road, 2 Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026, Maharashtra

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR I.T.A.T., MUMBAI