DR BABASAHEB LELE SMARAK SAMITTEE,SINDHUDURG vs. CIT (E), PUNE

The assessee has raised the following grounds of appeal : “1. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Exemptions), Pune erred in rejecting the appellant's application in Form 10AB dated 17/12/2024 solely on the ground of alleged delay under section 12A(1)(ac)(iii), without appreciating that the appellant had earlier registration under section 12A and continues to carry out genuine charitable activities. 2. The Learned Commissioner of Income Tax (Exemptions) erred in law and on facts in not condoning the delay, particularly when the delay was due to bona fide interpretation of newly introduced provisions and procedural changes, which are technical in nature and not affecting the genuineness of charitable activities. 3. The Learned Commissioner of Income Tax (Exemptions) erred in rejecting the application without examining the merits of the case, thereby depriving the appellant of substantive justice and defeating the object of granting registration to genuine charitable institutions.

Briefly stated, the facts of the case are that on receipt of the assessee’s application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in force, the Ld. CIT(E) issued notice on 27.01.2025 through ITBA portal which was duly served on the assessee requesting the assessee to upload certain information/clarification contained therein by 11.02.2025. On verification of the details filed by the assessee in response to the said notice, the Ld. CIT(E) observed various discrepancies which were communicated to the assessee vide issue of another notice/show cause notice dated 23.04.2025 seeking compliance by 30.04.2025. The said discrepancies pointed out by the Ld. CIT(E) are reproduced below : “4. "(i) Note on activity has not been furnished by you. Furnish activity note giving details viz. dates and places of each activities carried out by your trust, details of beneficiaries, how they were identified, etc. (ii) You have not furnish any supporting credible evidences in respect of the activities. Kindly furnish the same. In absence of any such tangible material in respect of proof of activities being carried out it is not possible to arrive at any conclusion about the genuineness of activities and also to ascertain as to whether the activities are in line with the objects of the trust / institution. (iii) Furnish the copies of bills/invoices of expenses done on each activities. (iv) Without prejudice to the above, it is seen that the expiry date of provisional registration under section 12AB of the Act in your case is 31/03/2025. As per the provisions of section 12A(1)(ac) (iii) of the Act, where a trust or institution has been provisionally registered under section 12AB of the Act, the application for regular registration under section 12AB is required to be filed, at least six months prior to expiry of period of the provisional registration or within six months from the date of commencement of activities, whichever is earlier. Since, the period of provisional registration was due to expire on 31/03/2025, the present application was required to be filed before 30/09/2024. The extended due date as per CBDT Circular No. 7 of 2024 was 30/06/2024. However, the present application filed by you is on 17/12/2024 i.e. after the expiry of period allowed under section 12A(1)(ac)(iii) of the Act. Thus, it is seen that you have not filed the present application within the time limit allowed under section 12A(1)(ac) (iii) of the Income Tax Act, 1961.”

The assessee furnished its response to the above notice on 06.05.2025. The Ld. CIT(E) duly considered the assessee’s contention but did not find them satisfactory. The Ld. CIT(E) therefore rejected the assessee’s application for regular registration filed on 17.12.2024 in Form 10AB, without going into the merits of the case by observing as under : “6. The assessee furnished its response on 06/05/2025. On the issue of obtaining provisional registration in form 10AC under item (A), the assessee admitted that the trust was previously registered as 12A. The assessee's contention is duly considered. It is, however, not found to be acceptable. As it is seen from the submissions that the date of commencement of activities of the trust is right from the FY 1989-90. It has obtained provisional registration in form 10AC on 10/12/2024 u/s 12A(1)(ac)(vi) - Item 'A' of the Income-tax Act, 1961. As the activities of the trust were already commenced it was required to file application in form 10AB u/s 12A(1)(ac) (vi) - Item 'B' of the Income-tax Act, 1961. Said provision is reproduced hereunder for ready reference: "12A(1)(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution, - (vi) in any other case, where activities of the trust or institution have (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought; (B) commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or subclause (v) or sub-clause (vi) or sub- clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities." 7. As stated by the assessee, its activities were commenced right from FY 1989- 90 i.e. before obtaining the provisional registration in form 10AC on 10/12/2024. Therefore, it was required to file application u/s u/s 12A(1)(ac)(vi) - Item 'B' of the Income-tax Act, 1961.”

Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

The Ld. AR, at the outset, submitted that the Ld. CIT(E) has rejected the assessee’s application for registration under section 12A of the Act due to delayed filing of application for registration u/s 12A(1)(ac)(iii) without appreciating the fact that the assessee had earlier registration u/s 12A and continue to carry on genuine charitable activities. He submitted that the delay occurred due to newly inserted provisions and procedural changes. The Ld. CIT(E) has rejected the assessee’s application on the hyper-technical grounds. The Ld. AR submitted that given an opportunity the assessee is in a position to

The Ld. DR, on the other hand, supported the order of the Ld. CIT(E).

We have heard the heard the Ld. Representatives of the parties and perused the material available on record. We find that the Ld. CIT(E) has rejected the application of the assessee for registration u/s 12A of the Act for the reasons reproduced in the preceding paragraph. Before us, the ld. AR submitted that given an opportunity the assessee is in a position to substantiate its case before the Ld. CIT(E) by filing the requisite details/ submission/explanation to his satisfaction. Considering the totality of the facts and in the circumstances of the case, we deem it fit and proper, in the interest of justice, to set aside the impugned order of the Ld. CIT(E) and restore the matter to his file with a direction to decide the assessee’s application for registration u/s 12A of the Act afresh on merits as per fact and law after affording one more opportunity of hearing to the assessee. The assessee is also hereby directed to make its submissions before the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext whatsoever unless required for the sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds of appeal raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.