BAL KRISHNA AMRATLAL CHARITABLE TRUST ,MUMBAI vs. CIT(EXEMPTIONS), MUMBAI

IN THE INCOME-TAX APPELLATE TRIBUNAL“B” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA 1626/MUM/2026 & ITA 1627/MUM/2026 Balkrishna Amratlal Commissioner of Income Tax v/s. Charitable Trust (Exemptions) बनाम 15 Vibha-Vasu, Tejpal Room No. 601, 6th Floor, Cumballa Hill, Road, Vile Parle (East) MTNL TE Building, Pedder Road, Dr. Mumbai – 400 057, Gopalrao Deshmukh Marg, Cumballa Maharashtra Hill, Mumbai – 400026, Maharashtra स्थायी लेखा सं./जीआइआर सं./ PAN/GIR No: AAATB1735F Appellant/अपीलाथी .. Respondent/प्रतिवादी

Appellant by : Shri Aditya Ajgaonkar & Ms. Rupal Shrimal, ARs Respondent by : Shri Vimal Kumar Meena, CIT DR

Date of Hearing 07.05.2026 Date of Pronouncement 23.06.2026 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The above captioned appeals have been preferred by the assessee Trust against the orders of even date as passed by the Learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”] pertaining to the orders passed u/s section 12AB and 80G of the Income-tax Act, 1961[hereinafter referred to as “Act”]. Since the appeals

P a g e | 2 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust are interconnected and also the fact that appeals were heard together, they are being taken up together for adjudication vide this composite order for the sake of brevity. 2. The grounds of appeal are as under: ITA 1627/MUM/2026 1. In the facts of the matter and in law, the Ld. CIT (Exemptions) erred in rejecting the application for regularisation of registration u/s 12AB of the Income-tax Act, 1961, despite the Appellant being eligible for the same. 2. In the facts of the matter and in law, the Ld. Commissioner Income Tax (Exemptions) erred in rejecting the application for regularisation of registration u/s 12AB of based on the mistaken the assumption that the activities of the charitable trust were being carried on from the date of the provisional registration without appreciating that the trust was incorporated in the year 1995 and started its activities soon thereafter. 3. In the facts of the matter and in law, the Ld. Commissioner Income Tax (Exemptions) erred in rejecting the application for regularisation of registration u/s 12AB of the Income-tax Act on a strict interpretation of Section 12A(1)(ac)(iii) of the Act without appreciating the proviso to Section 12A(1)(ac) of the Act though it was specifically pointed out and the delay explained. 4. In the facts of the matter and in law, the Ld. Commissioner Income Tax (Exemptions) erred in rejecting the application for regularisation of registration u/s 12AB of the Income-tax Act without appreciating that it was not possible for a trust that had already started activities in 1995 to file formForm 10AB within six months of commencing its activities after receiving provisional registration in 06.10.2022. 5. In the facts of the matter and in law, the Ld. Commissioner Income Tax (Exemptions) erred in rejecting the application for regularisation of registration u/s 12AB of the Income-tax Act without considering that the Appellant had filed Form 10AB six months prior to the expiry of the provisional registration. 6. In the facts of the matter and in law, the Ld. Commissioner Income Tax (Exemptions) erred in rejecting the application for regularisation of registration u/s 12AB of the Income-tax Act without considering that the

P a g e | 3 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust Appellant had complied with all the requirements for the grant of the said registration. 3. In this case, the assessee Trust filed application for registration u/s 12A of the Act after it was allowed provisional registration. However, the ld.CIT(E) rejected the claim on the grounds that the assessee did not comply with the time line laid down in the Act in this regard and also because it filed a wrong Form which was applicable to a new Trust and not an old Trust like the assessee.

P a g e | 4 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust purchased via purchase deed dated 09.08.2024. The trust has registration under Section 12A of the Act ever since 02.07.1996.

5.1 It is submitted further that the assessee filed an application for regularization of registration on 12.05.2025 under Section 12A of the Act. However the same was also filed under the wrong clause of Section 12, being Section 12(1)(ac)(iii) of the Act as the assessee was under the bonafide belief that registration must be taken u/s 12A(1)(ac)(vi)(B). of the Act. The CIT called for a list of documents including copy of trust deed, copy of form 10AC granting provisional registration, activities commenced since provisional registration along with details of expenses,

P a g e | 5 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust etc. In response, the assessee submitted all the documents which are as follows: a. Details of expenses since provisional registration dated 06.10.2022 b. Photos of activities done on the purchased land c. Details of expenses of work done on purchased land in tabular form d. Certified copy of trust deed e. Copy of Form 10AC f. Copy of Audit financials for the year ending 2022, and 2024 g. From 10A for under section 12 h. From 10A for under section 80G i. Form 10BD j. Change reports k. Purchase deed of land l. Form of FD 5.2 The ld.CIT(E) observed that the assessee had not filed the application for regularization of registration in Form 10AB within the prescribed time limit. According to him, the section under which the assessee filed the application in Form 10AB under Section 12A(1)(ac)(iii).As per the said section, “where the trust or institution has been provisionally registered under section 12AB for provisionally approved under sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10], at least six months prior to expiry of period of the provisional registration [or provisional approval, as the case may be, or within six months of commencement of its activities, whichever is earlier;” Therefore, the Appellant should have applied for regularization at least six months prior to expiry of period of the provisional registration for

P a g e | 6 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust provisional approval, as the case may be, or within six months of commencement of its activities, whichever is earlier;”

5.3 It is further submitted that the ld.CIT also stated there was no irrevocability or dissolution clause in the trust deed/MOA which is mandatory as per the provisions of the Act. He also called upon the assessee to submit details of expenditure, bank statement and list of donors. However, in the operative part of the order did not refuse registration on this ground. The assessee in its reply stated it is an old trust registered u/s. 12A vide registration no. TB/2007 dated 02.07.1996. The erstwhile trustees had applied for registration of trust in Form 10A under section 12A(1)(ac)(vi) of the Act 1961. The same was ought to be done under Section 12A(1)(ac)(i) for A.Y. 2023-24 to A.Υ. 2025-26.The mistake occurred due to change in the process of registration and the complexity of the law. However, the assessee also stated that by virtue of amendment in Finance (no. 2) Bill 2024, the Commissioner was empowered to condone delays provided there is a reasonable cause for delay. Therefore, it requested the Commissioner to condone the delay.

5.4 With regard to the irrevocability or dissolution clause, the assessee stated the trust had already filed an application with the Charity

P a g e | 7 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust Commissioner's office and the same was also attached to the reply.The Appellant also submitted details of expenses, Bank statement (PB Pg. 136-139) and a list of donors. However, the operative part of the order did not refuse registration on this ground.

5.5 The CIT(E) passed order rejecting the condonation of delay, despite it being brought to his notice that the trust was an old trust. The CIT(E) also held that ignorance of the law cannot be pleaded as a valid defence for delay and that strict compliance of 12A was called for. This is in stark variance with the CBDT circular dated 25.04.2024 where the Board observed the confusion caused by the new amendments and extended the deadlines accordingly. The CIT(E) passed order dated rejecting 80G approval as well as the registration u/s 12A was rejected.

5.6 It is also submitted that the CIT(E) should have guided the assessee in getting the application in the requisite form. The confusion had arisen due to discrepancies and lack of clarity in the relevant provisions/Rules and forms. The Provisional registration under Form 10AC should be treated as regular registration and there should be no gap /adverse effect based on this mistake as held in Shreee Kukarwada Kelavani Mandal v. CIT(E) ITA. No. 2514/Ahd/2025 & 2515/Ahd/2025

P a g e | 8 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust dated 30.01.2026. It is also submitted that by virtue of amendment in Finance (no. 2) Bill 2024, a proviso was added to Section 12A. As per the proviso, the Commissioner is empowered to condone delays. The proviso reads as follows: “Provided that where the application is filed beyond the time allowed in sub- clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time.” 5.7 Reliance is placed in this regard on Cartrade Foundation v. Commissioner of Income-tax (Exemptions) [2026] 184 taxmann.com 159 (Mum - Trib.) Shree Saibaba Charitable Trust v. Commissioner of Income-tax (Exemption) [2026] 184 taxmann.com 651 (Rajkot - Trib.) Saarth Pratishthan v. Commissioner of Income-tax(Exemption) [2026] 185 taxmann.com 331 (Mum- Trib.)

5.8 It was admitted that the assessee had only mistakenly applied for registration under Section 12A(1)(ac)(vi) instead of 12A(1)(ac)(i). The error occurred due to change in process of registration and the process being technical in nature. The CIT can consider the application for registration even if it is filed under the wrong clause or allow rectification or fresh application if permissible

P a g e | 9 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust under law as held in House of Humanity Charitable Trust v. CIT (Exemption) [2025] 176 taxmann.com 452 (Ahm - Trib.),Ananya Education and Charitable Trust v. Commissioner of Income-tax (Exemption) [2025] 177 taxmann.com 98 (Ahm-Trib.).

5.9 It is pleaded that the condition under Section 12A(1)(AC)(iii) of applying “at least six months prior to expiry of period of the provisional registration [or provisional approval, as the case may be,] or within six months of commencement of its activities, whichever is earlier” does not apply to old trust as held in Anybody Can Help Foundation v. ITO Exemp. 1(1)in ITA No. 7245/Mum/2025). Besides, the CIT could not reject the application solely on the ground of absence of irrevocability or dissolution clause in the trust deed. 6. The ld.DR on the other hand relied on the impugned order. 7. We have carefully considered all the relevant facts of the case and find that the ld.CIT(A) has rejected the application for registration without fully appreciating the contentions of the assessee and without affording adequate opportunity of hearing. He did not appreciate the bonafide mistake on part of the assessee to make the application in a correct Form and also without appreciating the reasons for the delay.

P a g e | 10 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust In any case, under the amended provisions he is empowered to look into the reasons and condone the delay if satisfied. 7.1 Admittedly, the assessee society was granted provisional registration and had filed "Form 10AB" for regular registration. As observed above, the CBDT, vide Circular No. 7/2024 dated 25.04.2024, had extended the "due date" for filing such application till 30.06.2024, therefore, there can be no denying the fact that the application filed by the assessee society was beyond the prescribed time limit. However, apart from the delay,we find that the impugned order does not record any defect either in the activities or objects of the assessee company or the documents submitted. Also, its bonafides are not in dispute, and the delay in filing the application, in our considered view, prima facie, does not appear to be deliberate.

7.2 We find that on identical issue of delay, the coordinate bench of ITAT, Mumbai in the case of Narke Green Foundation Charitable Institution ITA no.1864/Mum/2025 gave following directions: "5.9 At this juncture we refer to the pragmatic approach advocated by Justice V.R. Krishna Iyer, wherein he advocated a flexible approach to procedural law, that serve as "handmaid" to justice, and not a hinder it. The Principle of Justice Krishna Iyer emphasised that procedural laws should be tools to

P a g e | 11 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust facilitate administration of justice various decisions of Hon'ble Supreme Court has emphasised to strike a balance between strict adherence to procedural rules and the need to ensure that justice is not denied due to technicalities. 5.10 We agree with the above preposition observed by Hon'ble Pune Tribunal. However genuine and bonafide reason stated by the assessee cannot be over looked. Further we also note that, flexible and pragmatic approach to such procedural laws is necessary as against recognising a strict adherence to do which could sometime lead to injustice. Hon'ble Supreme Court in plethora of cases always emphasised that while considering delay, one must first ascertain bonafides of the explanation offered by the party seeking condonation. Thereafter there must be sufficient cause which is sustainable based on the genuine reasonable explanation. 5.11 While condoning the delay it is crucial to ensure the party seeking condonation provide genuine explanation for the delay. In present facts of the case, we note that, the reason that caused delay is based on a bonafide belief on behalf of the assessee without there being any malafide intention. 6. In our considered opinion assessee must get an opportunity to present its case before the Ld.CIT(E) and to explain the reason that caused the delay. The Ld.CIT(E) shall consider the application of assessee seeking condonation of delay in accordance with law keeping in view to the above principles of natural justice."

7.3 We find that the legislature in all its wisdom had vide the Finance Act, 2024 from 01.10.2024 made available on the statute a "Proviso" to Section 12A(1)(ac) that formally allows the ld.CIT(E) to condone the delay if reasonable cause is shown. We are of the considered view that the matter deserves to be restored to the file of the ld.CIT (E) for fresh consideration. The assessee society shall remain at liberty to file

P a g e | 12 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust an application for the condonation of the delay involved and the ld.CIT(E) shall consider such application in accordance with the extant law and dispose of the same after granting a reasonable opportunity of being heard to the assessee Trust. 8. In the result, the appeal is allowed for statistical purposes. 9.ITA 1626/MUM/2026 1. In the facts of the matter and in law, the Learned Commissioner Income Tax (Exemptions) erred in not granting approval u/s 80G of the Income-tax Act, 1961, despite the Appellant being eligible for the same. 2. In the facts of the matter and in law, the Ld. Commissioner Income Tax (Exemptions) erred in not granting approval u/s 80G of the Income-tax Act, 1961, only on the basis that the Application of the Appellant for registration u/s 12AB of the Income-tax Act, 196, had been rejected. 3. In the facts of the matter and in law, the Ld. Commissioner Income Tax (Exemptions) erred in rejecting the application in Form 10AB and not granting approval u/s 80G of the Income-tax Act, 1961, without appreciating that the Application of the Appellant for registration u/s 12AB of the Income-tax Act, 196, had been wrongly rejected. 10. According to the impugned order, the assessee had filed Form 10AB and requested for approval u/s 80G of the Act. The applicant had also applied for registration u/s 12AB of the Act which was rejected. The ld.CIT observed that the applicant failed to fulfil any of the criteria in view of the application for registration u/s 12AB of the Act. Thus, its application for approval u/s 80G of the act became untenable. In view of

P a g e | 13 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust the above, application in Form 10AB for approval u/s 80G of the Act was rejected.

Order pronounced in the open court on 23/06/2026.

Sd/- Sd/- AMIT SHUKLA PRABHASH SHANKAR (न्यातयक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER)

Place: म ुंबई/Mumbai दिनाुंक /Date 23.06.2026 Lubhna Shaikh / Steno आदेश की प्रतितलतप अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant

P a g e | 14 ITA No. 1626 & 1627/Mum/2026 Balkrishna Amratlal Charitable Trust 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त / CIT 4. दिभागीय प्रदिदनदि, आयकर अपीलीय अदिकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यादपि प्रदि //True Copy// आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अतधकरण/ ITAT, Bench, Mumbai.