ESTRELA FOUNDATION CHARITABLE TRUST,SURAT vs. CIT(E), EXEMPTION WARD, SURAT

The brief facts of the case are that the assessee had filed an application in Form No. 10AB for registration u/s. 12A(1)(ac)(iii) of the Act. The Ld. CIT(E) noted that the assessee trust was granted provisional registration on 24th March 2023 and the application for regular registration was required to be made within six months of commencement of activities or six months prior to expiry of provisional registration, whichever was

Shri Sapnesh Sheth the Ld. Sr. Counsel of the assessee submitted that the Ld. CIT(E) had allowed only two opportunities on 07.07.2025 and 15.12.2025. The Ld. CIT(E) had passed the order without taking into account substantial details and documents. He submitted that considering the amendment in the provisions of the Act, the delay in filing of application should have been condoned by him. The Ld. AR requested that the assessee may be allowed another opportunity of being heard and the

Per contra, Shri Mukesh Jain, the Ld. CIT-DR, supported the order of Ld. CIT(E). He, however, had no objection if the matter was set aside the file of the Ld. CIT(E) for deciding the matter on merits, after allowing another opportunity to the assessee.

I have carefully considered the facts of the case, the impugned order passed by the Ld. CIT(Exemption), and the submissions made by the assessee. The undisputed facts emerging from the record are that the assessee-trust was granted provisional registration and thereafter filed an application under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 seeking regular registration. The Ld. CIT(Exemption), however, rejected the application solely on the ground that the same was not filed within the period prescribed under the Act. The application was not examined on merits and no adverse finding has been recorded with regard to the objects of the trust, genuineness of its activities, or compliance with the conditions prescribed under section 12AB of the Act. It is well settled that procedural provisions are intended to facilitate the administration of justice and should not ordinarily be construed in a manner that defeats substantive rights. The object of the registration provisions contained in sections 12A and 12AB of the Act is to identify and grant registration to institutions carrying on genuine charitable activities. Therefore, where the claim of an assessee is otherwise capable of being examined on merits, rejection thereof solely on account of delay in filing the prescribed application would not advance the legislative intent. Further, the Legislature itself has recognized the hardship caused on account of

In the present case, the rejection of the assessee's application is founded exclusively on the issue of limitation. No finding has been rendered by the Ld. CIT(Exemption) regarding the charitable nature of the objects, genuineness of the activities, or any other factor relevant for grant of registration. In these circumstances, denial of an opportunity to have the application examined on merits would result in substantial injustice. Having regard to the totality of facts and the legislative intent underlying the amended provisions, I am of the considered view that the delay in filing the application under section 12A(1)(ac)(iii) deserves to be condoned. Consequently, the impugned order cannot be sustained.

Accordingly, the order passed by the Ld. CIT(Exemption) is set aside. The delay in filing the application under section 12A(1)(ac)(iii) is condoned. The matter is restored to the file of the Ld. CIT(Exemption) with a direction to examine the assessee's application for regular registration afresh on merits in accordance with the provisions of section 12AB of the Act. The Ld. CIT(Exemption) shall verify the objects of the trust, the genuineness of its activities and compliance with the statutory requirements and thereafter pass a reasoned and speaking order in accordance with law. The assessee shall extend full cooperation and

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

The application for approval u/s. 80G(5) of the Act was rejected by the Ld. CIT(E) for the reason that the assessee was not having a valid registration u/s. 12A/12AB of the Act. Since the matter regarding registration u/s. 12A of the Act has been set aside to the Ld. CIT(E), the present appeal in respect of approval u/s. 80G(5) of the Act is also set aside to the file of Ld.CIT(E), who should re-adjudicate the issue of grant of approval u/s. 80G(5) of the Act, after first deciding the issue of registration u/s. 12A/12AB of the Act.

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

In the final result, both the appeals of the assessee are allowed for statistical purpose.