SATYANARAYAN SOMANI MEMORIAL FOUNDATION,MUMBAI vs. COMMISSIONER OF INCOME TAX EXEMPTIONS MUMBAI, MUMBAI

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ITA 1838/MUM/2026Status: DisposedITAT Mumbai07 May 2026AY 2025-268 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the application for regular registration, considering the peculiar facts and circumstances and the potential for substantial justice. The case was remanded to the Commissioner for a decision on merits.

What were the facts?

The assessee, a cooperative society, obtained provisional registration under Section 12A. They applied for regular registration late, citing a bonafide belief about the filing deadline. The Commissioner rejected the application due to the delay.

What were the issues?

Whether the delay in filing the application for regular registration under Section 12A should be condoned, and if so, whether the application should be decided on merits.

Which sections of the Income-tax Act were involved?

Section 12A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE NARENDER KUMAR CHOUDHRY & HON’BLE JAGADISH

For Respondent: Ms. Rajni Rani Roy
Pronounced: 07.05.2026

आदेश / ORDER

PER NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER: This appeal has been preferred by the Assessee against the order dated 23.12.2025, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2025-26

2.

In the instant case, the Assessee being a Cooperative Society obtained provisional registration under Section 12A of the Act, vide order dated 23.11.2021 filed from AY 2022-23 to AY 2024-25.

3.

In order to regularize the aforesaid provisional registration and following the guidelines laid down in the provisions of the Act, the Assessee filed an application for regular registration in Form no. 10AB on dated 30.05.2025, which was taken into consideration by the ld. Commissioner by issuing a showing cause notice with regard to the delay in filing of such application.

4.

The Assessee before the ld. Commissioner has claimed as under:-

“3.6 Vide aforesaid partial submission dated 10.11.2025, the applicant has stated that, "The Trust was under a bonafide belief that the application for final registration was to be filed after the expiry of the provisional registration period, i.e., after A.Y. 2024-25. Neither the authorised representative nor the provisional certificate indicated any such condition requiring earlier application. The delay was purely inadvertent and unintentional, arising from a genuine misunderstanding of the procedural requirement and not with any mala fide intention." The applicant has further requested for condonation of delay in filing of Form 10AB.”

5.

Though the ld. Commissioner considered such reply filed by the Assessee, however, not being convinced with the same and by referring to the circular no.07/24 dated 25.04.2024 issued by the CBDT granting various extensions and/or permitting filing or re-filing of applications for registration in the cases, where trusts had failed to do so within the prescribed time or where such applications were rejected on specified grounds and following the judgments by the Hon’ble Apex Court in the of PCIT Vs. Wipro Ltd. 2022 taxmann.com 223 SCC 1 and Commissioner of Customs vs. Dilip Kumar & Co. (2018) 9 SCC 1, ultimately rejected the application filed by the Assessee on the ground of delay, in filing the same.

6.

The Assessee before us has filed a specific affidavit, with regard to the delay occurred in filing of application before the ld. Commissioner, which read as under:-

“2. That, the Applicant company was incorporated on 4th September 2021 with the main object to promote commerce, art, science, sports, education, research, welfare, religion, charity, protection of environment, promote diverse cultural and heritage of ancient Indian history or any such other object. The Applicant is also carrying on the activity of developing, establishing, promote, facilitate, promotion, improvement of educational, social, cultural, economic and medical relief to the poor and advancement of any other charitable and developmental objects of general public utility and community welfare. 3. That, the Applicant company had been granted provisional registration under section 12A vide order dated 23.11.2021 for the period from AY 2022-23 to AY 2024-2025. 4. That, we were under the Bonafide belief that the Applicant had to apply for regularization of provisional registration granted under section 12A of the Act within 6 months from the end of the assessment year for which provisional registration is granted by the competent authority. 5. That, therefore, we have not followed up with our tax consultant for filing of application in Form No. 10AB for regularization of provisional approval granted under section 12A of the Act. 6. That, it was only when we have met our tax consultant in the month of May 2025 for making application for regularization of provisional approval, he informed us that we should have made the application for regularization of provisional approval within 6 months from the start of activity of the trust or before 6 months from the expiry of the approval granted i.e., AY 2024-25. 7. That, the tax consultant had advised us to file an application on urgent basis for regularization of the provisions application already granted vide order dated 23rd November 2021 for the period AY 2022-23 to 2024-25. 8. That, as per the advice of the tax consultant, the Applicant immediately filed an application in Form No. 10AB of the Act on 30.05.2025 for regularization of provisional approval. 9. That, considering the changes made in the statue book which had caused enormous difficulties to the trust's in applying for regularization of provisional approval, CBDT vide Circular No.7 of 2024 dated 25th April 2024 had also extended the due date for filing the application seeking final registration under section 12A of the Act to 30.06.2024. 10. That, we could not be able to take the benefit of above circular, as we were under the Bonafide belief that application for regularization of provisional application is to be made within 6 months from the end of the assessment year for which provisional registration is granted and therefore, we were under the impression that we have to make application by 30.06.2025. 11. That, the application for regularization of provisional approval granted under section 12A of the Act was filed on 30.05.2025. However, by that time the application filed by the Appellant was delayed by 333 days. 12. That, it was under the above peculiar facts and circumstances, which were unforeseen and beyond my control, that the application of registration could not be filed before the Ld. CIT (E) within the limitation period. 13. That, otherwise, the Applicant had never been guilty of such default in earlier or subsequent assessment year.” 7. On the contrary, the ld. D.R. refuted the claim of the Assessee.

8.

We have heard the parties and perused the material available on record. Admittedly, the Assessee was formed on dated 18.08.2021 by way of Memorandum of Association/Articles of Association and thereafter registered with the Ministry of Corporate Affairs vide incorporation certificate dated 04.09.2021 and thereafter, the Assessee was granted provisional registration in Form 10AC on dated 23.11.2021 issued under Section 12A of the Act and therefore, as per the provisions of the Act, the Assessee was supposed to file an application for regular registration within 6 months prior to expiry of period of provisional approval or within 6 months from the commencement of its activities, whichever is earlier. As in the instant case, the Assessee commenced its activities after forming/incorporating on dated 18.08.2021 and applied and got the provisional registration on 23.11.2021 therefore, the time limit of 6 months for filing regular application for registration under Section 12AB would be “within 6 months of commencement of its activities” and therefore, the Assessee was supposed to file an appropriate application for regular registration on or before 17.02.2022. Whereas the Assessee, in the instant case, has filed the same on 30.05.2025. Even otherwise did not fulfill the second condition and /or limitation, which says that Form No.10B is to be filed within time period of at least 6 months prior to the expiry of period of provisional approval. The Assessee with regard to the delay in filing application for regular registration before the ld.

Commissioner, has claimed that it was under impression that such application was supposed to be filed within 6 months from the end of the assessment year, for which the registration was granted by the competent authority and therefore, the Assessee has not followed up with its tax consultant for filing of application in form 10AB for regularization of provisional approval granted under Section 12A of the Act. And once the Assessee met its tax consultant in the month of May, 2025 for making application for regularization of provisional approval, ld. Tax Consultant informed the Assessee that the application should have been filed within 6 months from the start of its activities and / or before 6 months from the expiry of the approval granted i.e. AY 2024-25. Thus, the ld. Tax Consultant advised the Assessee to file an application on urgent basis for regularization of the provisional registration granted vide letter dated 23.11.2021, and therefore, the Assessee immediately filed the application in Form 10AB on dated 30.05.2025, for regularization of provisional approval.

9.

Considering the changes made in the statute book, which has caused enormous difficulties to the trusts in applying for provisional approval, the CBDT vide Circular No.7 of 2024 dated 25.04.2024 had also extended the due date for filing application seeking final registration under Section 12A of the Act to 30.06.2024. The Assessee somehow could not apply to get benefit of above circular on the bona-fide belief that application for regularization of provisional application is to be made within 6 months from the end of assessment year for which the provisional registration was granted.

10.

The Assessee at last submitted that it was under unforeseen circumstances and beyond its control that the application for registration could not be filed before the ld. Commissioner within the limitation period. Otherwise, the Assessee had never been guilty of such default in earlier or subsequent assessment year.

11.

On the contrary, the ld. D.R. refuted the claim of the Assessee.

12.

Having considering the reasons stated by the Assessee, at the outset, appears to be after thought and not in consonance with the relevant provisions of law and interpretation of the provisions as per wisdom is not allowable. Further, it is a fact that, in the instant case, the Assessee not only failed to adhere to first condition i.e. 6 months for filing of application from the start of its activities but also failed to adhere to second condition though not applicable, i.e. the application has to be filed within at least 6 months prior to expiry of period of provisional approval which has also been crossed and therefore, on the aforesaid reasons, the Assessee deserve no leniency.

13.

However, considered the peculiar facts and circumstances in totality as the provisional registration granted to the Assessee has neither been cancelled nor doubted by the authorities below but in fact, elapsed by efflux of time. Further, it is a fact that the Assessee by filing a duly sworn affidavit has accepted its fault for misinterpreting/misunderstanding the relevant time limit for filing the application for regular registration. Further, the Assessee could not get any benefit for delaying the application for regularization and no prejudice shall be caused to the Revenue, if application filed by the Assessee is to be decided on merit, considering the activities of the Assessee and the spheres of the legal parameters as applicable thereto. Further, as observed above, as the new provisions were introduced by the legislature in the statute, with regard to the provisional and regular registration, which created many confusions in the minds of the Assessee and therefore, the CBDT was constrained to issue clarification circulars and/or extension circulars from time to time. Further, in case we will not allow the adjudication of the application on merit, then certainly it would cause undue hardship to the Assessee.

14.

Thus, considering the peculiar facts and circumstances in totality again, for just and proper decision of the case, and substantial justice, and by following the dictum laid down by the Hon’ble Apex Court in the case Collector Land Acquisition vs. MST Katiji (1987) 167 ITR 471, wherein it had been laid down as under :

"i. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. ii Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. iii 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common-sense and pragmatic manner. iv When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay. v There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. vi It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." We are inclined to condone the delay of 33 months in filing of an application for regular registration on dated 30.05.2025 however, subject to deposit of Rs.33,000/- in the Revenue Department under ‘other heads’ within 15 days from date of this order. Thus, the delay is condoned, subject to above cost.

15.

Coming to the merits of the case, as we have condoned the delay and it is a fact that the ld. Commissioner has not decided the application filed by the Assessee for regular registration under Section 12 A on its merits and thus, the case is remanded to the file of the ld. Commissioner for decision afresh, suffice it to say, by affording reasonable opportunity of being heard to the Assessee and subject to deposit of Rs.33,000/- as directed above.

16.

In the result, Assessee’s appeal is allowed for statistical purposes.

Order pronounced in the open court on 07.05.2026.

Sd/- Sd/- JAGADISH NARENDER KUMAR CHOUDHRY ACCOUNTANT MEMBER JUDICIAL MEMBER

Tarun Kushwaha (Sr. Private Secretary)

Copy to: SATYANARAYAN SOMANI MEMORIAL FOUNDATION, TOP FLOOR DRISHTIR HOUSE 15 MATHEW ROAD 1 OPERA HOUSE MUMBAI, MUMBAI-400004, MAHARASHTRA COMMISSIONER OF INCOME TAX EXEMPTIONS MUMBAI, ROOM NO 601 6TH FLOOR CUMBALLA HILL MTNL 2 TE BUILDING PEDDER ROAD DR GOPALRAO DESHMUKH MARG MUMBAI, MUMBAI-400026, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE TRUE COPY

ASSISTANT REGISTRAR / SR. PRIVATE SECRETARY I.T.A.T., MUMBAI

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