P N AMERSEY EDUCATIONAL TRUST ,MUMBAI vs. CIT(EXEMPTION), MUMBAI

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ITA 1335/MUM/2026Status: HeardITAT Mumbai09 July 20266 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted the assessee's explanation for the delay and the recent amendment empowering PCIT/CIT to condone delays. Consequently, the order of the CIT(E) was set aside, and the matter was remitted back for fresh consideration.

What were the facts?

The assessee trust obtained provisional registration under Section 12AB but filed the application for regularization of this registration late. The CIT(E) rejected the application due to the significant delay, deeming it invalid.

What were the issues?

Whether the delay in filing the application for regularization of provisional registration can be condoned, and if the CIT(E) erred in rejecting the application solely on grounds of delay.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH MUMBAI

Before: SHRI SAKTIJIT DEY, HONBLE & SHRI GIRISH AGRAWAL

Hearing: 06.07.2026Pronounced: 09.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, HON'BLE VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 1335/MUM/2026 Assessment Year: N.A P N Amersey Educational Commissioner of Income-tax Trust, (Exemption), 00, Arvind House Quay Street, Mumbai Mazgaon Reclamation, Vs. Mumbai – 400010 (PAN AAATP0038K) (Appellant) (Respondent) Present for: Assessee : Ms. Kinjal Bhuta, Advocate Revenue : Shri Amit Dua, CIT DR Date of Hearing : 06.07.2026 Date of Pronouncement : 09.07.2026 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of CIT(E), Mumbai vide order No. ITBA/EXM/F/EXM45/2025- 26/1084129333(1), dated 26.12.2025, u/s. 12AA of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

2.

Grounds taken by the assessee are reproduced as under: 1. The Ld. CIT (Exemptions) Mumbai erred in rejecting the application for final registration on the grounds of late filing. That the rejection is harsh and leaves the appellant trust remediless and prayed to be set-aside. 2. The Ld. CIT (Exemptions), Mumbai, erred in not condoning the delay in filing of application for regularization of provisional registration filed in Form no.10AB without appreciating the facts and circumstances of the delay presented before him.

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3.

Without Prejudice to the above, the Ld. CIT (Exemptions), Mumbai erred in computing the delay in filing the application to 29 months without appreciating that since the trust was into existence since last several years and even at the time of making provisional registration, the second condition of making application within 6 months of commencement of activities becomes redundant and does not apply to the instant facts of the case. 4. Without Prejudice to the above, the actual delay in filing application is approximately 2 months as the first application was made and withdrawn due to some errors in filing and these facts ought to have been considered. 5. The appellant craves leave to add, amend, alter, or delete any of the above grounds of appeal

3.

Brief facts as culled out from records are that assessee obtained provisional registration u/s. 12AB of the Act vide order dated 12.05.2022 in Form 10AC, having validity from Assessment Year 2023- 24 to 2025-26. Assessee filed application in Form 10AB on 05.06.2025 u/s. 12A(1)(ac)(iii) seeking regularization of the said provisional registration granted u/s. 12AB. Ld. CIT(E) noted that since assessee has been carrying out its activities subsequent to obtaining provisional registration, it was incumbent upon it to apply for regularization of the provisional registration on or before the end of November, 2022, being six months from the commencement of its activities, i.e., the date of granting of provisional registration on 12.05.2022. According to him, since the regularization application has been filed after a delay of 29 months, such an application is invalid and not maintainable. He thus, held that Form 10AB filed by the assessee is in violation of the provisions of time limitation and thus, rejected it. In this respect, a show cause notice was issued dated 15.12.2025 which was duly complied with by the assessee. Ld. CIT(E), after considering the submissions made by the assessee, denied the regularization of the provisional registration. However, he granted liberty to the assessee to pursue remedies available in the statute without any prejudice.

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4.

Contention of the assessee is that delay noted by the ld. CIT(E) is incorrect, since renewal should have been considered due from 01.11.2025 onwards and not 01.11.2022, since the provisional registration itself was granted from Assessment Year 2023-24 to Assessment Year 2025-26. Observations of ld. CIT(E) are based on erroneous appreciation of facts. According to the assessee, provisions for exemption are meant for benevolent purpose and therefore, a liberal approach is called for in respect of such procedures. Ld. Counsel for the assessee explained that assessee is an old trust operating since its day of incorporation of 11.09.1989. It is registered with Commissioner of Charity, Mumbai vide registration No.E-10399(Mumbai). The object of the assessee for charitable purposes is education. When the new regime of registration was brought on the statute from 01.04.2021, inadvertently, assessee instead of applying for the renewal of its registration under the amended new regime, applied for a provisional registration which has led to the present state of affairs. It was also submitted that ld. CIT(E) has not taken into consideration amendment brought to section 12A effective from 01.10.2024 whereby ld. PCIT/CIT are empowered to condone the delay by considering reasonable cause.

4.1. Assessee made a submission dated 02.06.2025 whereby it was informed to the ld. CIT(E) that it had filed its application under the wrong clause of 12A(1)(ac)(ii) instead of 12A(1)(ac)(iii) as an oversight. In the said application, assessee also submitted to withdraw its Form- 10AB which was filed with a wrong clause. To this effect, ld. CIT(E) passed an order dated 13.06.2025 accepting this application whereby it was noted that assessee had made a new application.

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4.2. Ld. Counsel for the assessee also referred to online submission made by the assessee on 22.12.2025 explaining the reason for delay in filing Form-10AB for which ld. CIT(E) has not considered its condonation. The said submission was made through e-proceedings response acknowledgement No. 920274711221225. The explanation given is reproduced for ready reference:

“We, the trustees of P N Amersey Educational Trust, humbly seek condonation of delay in filing Form 10AB for regularisation of our provisional registration. We had filed application for regularisation of provisional registration clause (ii) of section 12(A)(1)(ac) of the Income tax Act in Form 10AB dated 26.11.2024. Thereafter the application was withdrawn since wrong section was selected and fresh application was filed on 05.06.2025 under clause (iii) of section 12(A)(1)(ac) of the Income tax Act in Form 10AB. The condition for making application for regularisation in Form 10AB is governed by the provision of section 12A(1)(ac) (iii) of the Income tax Act. According to the provision, we should have applied either within six months of the start of the activities or at least six months prior to expiry of the period of the provisional registration i.e. before September 2024 whichever is earlier. However, we inadvertently filed correct application for regularisation of provisional registration order u/s 12A on 05.06.2025. Therefore, there has been a delay in filing the application. The delay in filing the application was inadvertent and unintentional, as detailed below: 1.Most of the Trustees are not conversant with the complexities of Income Tax Laws and receiving notices and filing responses on the online Income Tax Portal. 2. The Trustees were unaware of the shift from physical to online communication from the Income Tax Department, assuming that notices would be served physically. 3. The Trust was primarily dependent on external professionals like accountants, advocates and Chartered Accountants for compliance. 4. The Trustees were not aware of the process of receiving notices through the Income Tax e-Portal or to submit replies online. One of the trustees is senior citizen and are not conversant with modern means of online communication. 5. They were under the impression that once provisional registration was granted, it would remain valid indefinitely, as was the case under the earlier provisions. However, upon becoming aware of the new provisions, they immediately took action and filed the application for registration before your Honour. 6. The delay was also caused by the transition from physical to digital systems, which led to confusion. 7. The delay was unintentional and occurred despite our bona fide intentions to comply with statutory timelines. There was no willful negligence or intent to evade tax. Denying condonation would cause undue hardship and the loss of tax-exempt status, severely impacting our charitable activities. Thus, due to reasons stated above, there was an unintended delay in filing the application. The delay was purely due to honest reasons. The Trustees believed that notices would be received physically or that the tax consultant would manage and respond to any communication from the Department. We rely on the following case laws which support the principle that procedural delays should not defeat substantive rights when the cause is genuine and honest: 1.Mela Ram & Sons V/s CIT (1956) 29 ITR 607 (SC) The words sufficient cause should receive liberal construction so as to advance

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substantial justice where no negligence nor in action nor want of bona fide is imputable to the applicant. 2. The mistake of the accountant or lawyer may be a good reason for condonation of delay. United Christmas Celebrations Committee Charitable Trust V/s ITO (2017) 83 Taxmann.com 293 Madras 3. The power to condonation is expected to be exercised liberally so as to advance the cause of justice Voltas Ltd V/s DCIT (2000) 241 ITR 471 (AP) This decision is in line with the view taken by Supreme Court in collector. Land Acquisition Mst Katiji (1987) 167 ITR 471 (SC). We request your honour to kindly condone the delay and grant the registration at the earliest.”

5.

We have heard both the parties and perused the material available on record. Before us, ld. Counsel for the assessee admitted that there is a delay in filing Form-10AB. For the purpose of explaining this delay, reference was made to circular No.7 of 2024 issued by Central Board of Direct Taxes (CBDT), which extended the time period to 30.06.2024. Attention was drawn to the newly inserted proviso to sub-clause (ac) to sub-section (1) of section 12A, inserted by Finance (2) Act, 2024 w.e.f. 01.10.2024, wherein ld. PCIT/CIT have been empowered to condone the delay, if they find that there was reasonable cause, in not filing the application within the prescribed time limit. We note that assessee has explained its case of inadvertent mistake committed in filing the application for registration under the wrong clause which has resulted into issuing of provisional registration requiring regularisation, wherein assessee is held to commit a delay. Considering this proviso brought on statute, we find it appropriate to set aside the order of ld. CIT(E) to condone the delay and remit the matter back to the file of ld. CIT(E), to consider the application for registration, denovo.

5.1. Needless to say, assessee be given reasonable opportunity of being heard and be allowed to make any further submission, if so required. Assessee is also directed to be diligent in attending the hearing as and when fixed and make all the required submission without seeking adjournments unless warranted by compelling reasons. Accordingly,

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grounds raised by the assessee in this regard are allowed for statistical purposes.

6.

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

Order pronounced in the open court on 09 July, 2026.

Sd/- Sd/- (Saktijit Dey) (Girish Agrawal) Vice President Accountant Member

Dated: 09 July, 2026 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai

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