SHREE MARUTI NANDAN CHARITABLE TRUST,DAHOD, GUJARAT vs. COMMISSIONER OF INCOME TAX, EXEMPTION, AHMEDABAD, EXEMPTION, AHMEDABAD
What did the Tribunal hold?
The Tribunal held that the issue of condonation of delay required a fresh examination by the CIT(E) in a justice-oriented manner, considering the bona fide mistake and evolving compliance framework. The matter was restored to the CIT(E) for de novo adjudication.
What were the facts?
The assessee trust applied for registration under Section 12A/12AB and 80G of the Income Tax Act. The applications were rejected by the CIT(E) primarily due to the delay in filing Form 10AB, even after considering administrative extensions.
What were the issues?
Whether the delay in filing applications for registration under Section 12A/12AB and 80G should be condoned, and if the CIT(E) properly exercised its discretion in rejecting the applications on this ground.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. Nos.2423&2424/Ahd/2025 (Assessment Years: 2023-24 & 2025-26) Shree Maruti Nandan Vs. Commissioner of Income Charitable Trust, Tax (Exemption), 1, Rajmajhal Road, Devgadh Ahmedabad Baria S.O., Devgadbaria, Dahod-389380 [PAN No.AAQTS4583E] (Appellant) .. (Respondent) Appellant by : Shri Harshit Patel, AR Respondent by: Shri Sher Singh, CIT-DR Date of Hearing 26.03.2026 Date of Pronouncement 23.04.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: Both appeals have been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide orders dated 29.09.2025 passed for A.Ys. 2023-24 and 2025-26. Since common facts and issues for consideration are involved for both the appeals before us, both the appeals are being disposed by way of a common order.
We shall first deal with assessee’s appeal in ITA No. 2423/Ahd/2025 2. The assessee has raised the following grounds of appeal:
“1) Considering the facts and circumstances of the case and in law, the Commissioner of lncome-tax Exemption, Ahmedabad (CIT(E)) has erred in not granting registration to the Appellant under section 12A/12AB of the Income-tax Act, 1961. 2. The CIT(E) erred in rejecting the Form 10AB application without appreciating that the delay was caused due to a genuine misunderstanding of the new 12AB compliance framework by the earlier CA. The Trust acted bona fide,
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 2–
with no intention to delay or evade compliance. The delay in filing Form 10AB be condoned and registration u/s 12A(1)(acXiii) be granted. ln such facts, the delay deserves to be condoned and the registration u/s 12A/12AB should be granted. 3) Considering the facts and circumstances of the case and in law, the CIT(E) while examining the application under Section 12A/12AB of the Act erred in rejecting the application filed by the Appellant under section 12A(1)(ac) on the ground that Appellant has not made submission / compliance to show cause notice issued. 4) The Trust has been carrying out continuous charitable activities since 2015. There is no adverse finding by CIT(E) about the genuineness of activities or the objectives of the Trust. The Courts and ITAT have consistently held that procedural lapses cannot deprive a trust of statutory benefits when substantive conditions are fulfilled. Therefore, the Trust is eligible for registration under section 12A/12AB, the CIT(E)'s rejection be quashed and registration u/s 12A be granted. 5) The CIT(E) erred in concluding that the Trust "did not respond" despite the Appellant having filed a reply on time. The order was passed without proper consideration of submissions and affidavit, violating natural justice. The impugned order be set aside and the registration should be granted. 6) The appellant draws attention to the fact that after introduction of the new 12AB scheme, the legislative and administrative authorities have recognised genuine hardship faced by charitable trusts in understanding the provisions and meeting the timelines. For instance, via Circular No. 6 of 2023 issued by Central Board of Direct Taxes (CBDT), the due date for filing Form 10AB (for conversion / renewal under certain clauses) was extended to 30 September 2023. Further, in recognition of continuing difficulties, the due date was extended further to 30 June 2024. Considering these facts and given that the present application was filed after a bona fide delay, the Hon'ble ITAT should condone the delay and grant registration under section 12A/12AB, in line with the principle of substantial justice. 7) Section 115TD applies only when registration is finally refused and appellate remedies are exhausted. initiating 115TD proceedings while the Trust is contesting the rejection and seeking registration is premature, arbitrary and contrary to law. Accordingly, the invocation of section 115TD should be dropped, till the pendency of outcome of the appeal and registration under 12A/12AB should be granted. 8) In light of the above facts and grounds, the Appellant respectfully prays that this Hon'ble Tribunal may be pleased to: (a) condone the delay in filing Form 10AB, (b) Quash the rejection order passed by CIT(E), (c) Direct the CIT(E) to grant final registration u/s 12A(1)(ac)(iii) (or grant registration directly under powers of the Tribunal), (d) Hold that section 115TD is not applicable to the Appellant-Trust or (e) Pass such further orders as deemed fit in the interest of justice.
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 3– 9) The Appellant craves leave to, add to, alter or amend, vary omit, substitute or modify the aforesaid Grounds of Appeal or add new grounds of appeal as and when advised.” 3. The brief facts of the case are that the assessee trust, namely Shree Maruti Nandan Charitable Trust, filed an application in Form No. 10AB on 31.03.2025 under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 ("the Act") seeking regular registration pursuant to the provisional registration earlier granted under section 12AB vide Form 10AC dated 25.10.2022 for Assessment Years 2023-24 to 2025-26. During the course of proceedings, CIT (Exemptions) issued notices asking for details and documents, to which the assessee furnished a reply dated 30.05.2025 along with certain documents. However, on examination of the material on record, the Ld. CIT (Exemptions) observed that the details submitted were partial and not in a structured or para-wise manner, and importantly, the application itself appeared to be filed beyond the time prescribed under the statutory provisions.
The Ld. CIT (Exemptions) observed that in cases where a trust has been granted provisional registration, it is mandatorily required to apply for regular registration either within six months from commencement of its activities or at least six months prior to the expiry of the provisional registration, whichever is earlier. In the present case, based on the assessee’s own submissions, CIT (Exemptions) noted that the trust had commenced its activities as early as July 2015, whereas provisional registration was obtained only on 25.10.2022. Accordingly, applying the statutory mandate strictly, CIT (Exemptions) held that the application in Form 10AB ought to have been filed within six months from the date of commencement of activities, i.e., in 2015 itself.
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 4– 5. The Ld. CIT (Exemptions) further noted that even if the benefit of relaxation granted by CBDT Circular No. 7/2024 dated 25.04.2024 was considered, which extended the timeline for filing such applications up to 30.06.2024, the assessee failed to avail the same and instead filed the application belatedly on 31.03.2025. Thus, the delay was not only beyond the original statutory time limit but also beyond the extended period granted administratively.
In response to this defect, CIT(E) issued a show cause notice dated 16.09.2025 to the assessee, pointing out that the application was time- barred and requiring the assessee to explain the delay and justify why the application should not be rejected as non-maintainable. The assessee was also given an opportunity to seek condonation of delay in light of the amendment introduced by the Finance (No. 2) Act, 2024 w.e.f. 01.10.2024, which empowers the Commissioner to condone delay upon showing reasonable cause supported by evidence and affidavit. However, despite this specific opportunity, CIT (Exemptions) noted that the assessee neither filed any reply to the show cause notice nor furnished any condonation application or supporting material. Even earlier, in response to the initial questionnaire, the assessee had not addressed the issue of delay or provided any justification in this regard.
Upon examining the conduct of the assessee, the Ld. CIT (Exemptions) held that the assessee had failed on multiple counts. Firstly, it did not comply with the statutory timeline prescribed under section 12A(1)(ac)(iii) of the Act. Secondly, it failed to avail the extended timeline granted by the CBDT. Thirdly, despite being made aware of the delay and being given an opportunity to explain the same under the newly inserted condonation provision, the assessee chose to remain non-responsive. The
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 5– CIT (Exemptions) observed that the conditions attached to the provisional registration in Form 10AC explicitly required the assessee to apply for regular registration within the prescribed time, and therefore, the assessee was deemed to be aware of such obligations. The plea implicit in the assessee’s earlier submissions that the activities were ongoing and charitable in nature was not considered sufficient by Ld. CIT(E) to override the mandatory procedural requirements.
The Ld. CIT (Exemptions) also placed reliance on CBDT Circular No. 11 of 2022 and Explanatory Circular No. 01 of 2024 to hold that provisional registrations are granted in an automated manner without verification of genuineness, and therefore, such provisional approval does not confer any vested right unless followed by timely compliance for regular registration. The CIT(E) further observed that if the assessee was unaware of the procedural requirements or had obtained provisional registration erroneously, it could have either surrendered the same or complied within the extended timeline, which it failed to do.
On the issue of condonation, the Ld. CIT (Exemptions) categorically held that although the law now permits condonation of delay, such relief is discretionary and conditional upon the assessee demonstrating reasonable cause with supporting evidence. In the present case, the assessee neither filed any condonation request nor provided any explanation whatsoever, and therefore, it was not entitled to such relief. The CIT (Exemptions) held that a party seeking equitable relief must demonstrate diligence and bona fide conduct, and a person who remains non-compliant and unresponsive cannot claim such discretionary benefit.
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 6– 10. In view of the above findings, the Ld. CIT (Exemptions) held that the application filed by the assessee in Form No. 10AB was barred by limitation and was liable to be rejected as non-maintainable. Consequently, the application was rejected without going into the merits of the genuineness of activities or objects of the trust. Further, as a corollary to such rejection, the provisional registration granted earlier under Form 10AC was also cancelled.
The assessee is in appeal before us against the order passed by CIT(Exemption) dismissing the appelication of the assessee.
We have considered the rival submissions, perused the material available on record and the impugned order passed by the Ld. CIT (Exemptions). We find force in the contention of the assessee that the Ld. CIT (Exemptions) has proceeded to reject the application primarily on technical grounds of limitation without recording any adverse finding with regard to the objects of the trust or the genuineness of its activities. It is now well settled that at the stage of grant of registration under section 12A/12AB, the scope of enquiry is confined to examination of the objects of the trust and the genuineness of its activities.
In the present case, we note that the Ld. CIT (Exemptions) has not doubted the charitable nature of the objects nor has he recorded any finding that the activities carried on by the assessee are not genuine. The rejection is thus founded entirely on the alleged delay in filing Form No. 10AB.
We further find that the assessee has specifically contended that the delay occurred due to a bona fide misunderstanding of the newly
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 7– introduced statutory framework under section 12AB, coupled with erroneous professional advice received from the earlier Chartered Accountant. The assessee has also placed on record that upon discovery of the mistake, it acted promptly by engaging a new professional and filing the application on 31.03.2025. The explanation so offered, prima facie, cannot be said to be lacking in bona fides. The Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) has laid down that a liberal approach should be adopted in condoning delay and that substantial justice should prevail over technical considerations. Similar view has been taken in N. Balakrishnan vs. M. Krishnamurthy (1998) 7 SCC 123, wherein it has been held that length of delay is not material, but acceptability of the explanation is the only criterion.
We also find merit in the contention of the assessee that the Ld. CIT (Exemptions) has recorded an incorrect finding that the assessee did not respond to the show cause notice. The assessee has categorically submitted that a reply dated 19.09.2025 along with affidavit explaining the delay was duly filed within the stipulated time. If such reply was indeed filed and not considered, the same would amount to a clear violation of principles of natural justice. It is trite law that any order passed without considering the submissions of the assessee and without affording effective opportunity of being heard is liable to be set aside. In this regard, reliance can be placed on the judgment of the Hon’ble Supreme Court in Andaman Timber Industries vs. CCE (2015) 62 taxmann.com 3 (SC), wherein it was held that denial of opportunity of hearing vitiates the entire proceedings.
We further note that the Ld. CIT (Exemptions) has also declined to exercise the power of condonation introduced by way of amendment
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 8– through Finance (No. 2) Act, 2024 w.e.f. 01.10.2024, on the ground that no sufficient cause was shown. However, in light of the submissions made before us and the material placed on record, including the explanation regarding bona fide mistake and reliance on professional advice, we are of the considered view that the issue of condonation requires a fresh and judicious examination. The discretion vested in the authority for condonation is to be exercised in a fair, reasonable and justice-oriented manner and not in a hyper-technical fashion.
We also take note of the fact that the CBDT itself has, from time to time, extended the due dates for filing such applications recognizing the practical difficulties faced by charitable institutions in transitioning to the new regime under section 12AB. This lends support to the contention of the assessee that the delay in the present case occurred in a backdrop of genuine confusion and evolving compliance framework.
Considering the totality of facts and circumstances, and in the interest of substantial justice, we are of the view that the matter deserves to be restored to the file of the Ld. CIT (Exemptions) for de novo adjudication. The Ld. CIT (Exemptions) shall proceed to examine the application on merits in terms of section 12AB of the Act.
The Ld. CIT (Exemptions) is also directed to duly consider all submissions filed by the assessee, including those claimed to have been filed in response to the show cause notice, and to afford adequate and reasonable opportunity of being heard before passing a fresh order.
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 9– 20. In view of the above discussion, the impugned order passed by the Ld. CIT (Exemptions) is set aside and the matter is restored to his file for fresh adjudication in accordance with law.
The appeal of the assessee is allowed for statistical purposes.
Now we shall take assessee’s appeal in ITA No. 2424/Ahd/2025 22. The assessee has raised the following grounds of appeal:
“1) Considering the facts and circumstances of the case and in law, the commissioner of Income tax Exemption, Ahmedabad (CIT(E)) has erred in not granting registration to the Appellant under section 80G of the Income tax Act, 1961. 2) The CIT(E) erred in rejecting the Form 10AB application without appreciating that the delay was caused due to a genuine misunderstanding of the new provisions in 80G compliance framework by the earlier CA. The Trust acted bona fide, with no intention to delay or evade compliance. The delay in filing Form 10AB be condoned and registration u/s 80G(5)(iii) be granted. In such facts, the delay deserves to be considered and the registration u/s 80G should be granted. 3) The Trust has been carrying out continuous charitable activities since 2015. There is no adverse finding by CIT(E) about the genuineness of activities or the objectives of the Trust' The courts and ITAT have consistently held that procedural lapses cannot deprive a trust of statutory benefits when substantive conditions are fulfilled. Therefore, the Trust is eligible for registration under section 80G, the CIT(E) rejection be quashed and registration u/s 80G be granted. 4) The appellant draws attention to the fact that after introduction of the new 80G scheme, the legislative and administrative authorities have recognised genuine hardship faced by charitable trusts in understanding the provisions and meeting the timelines and has extended the timelines 5 tímes. For instance, via circular No. 6 of 2023issued by central Board of Direct Taxes (CBDT), the due date for filing Form 10AB (for conversion / renewal under certain clauses) was extended to 30 September 2023. Further, in recognition of continuing difficulties, the due date was extended further to 30 June 2024. Considering these facts and given that the present application was filed after a bona fide delay, the Honourable ITAT should consider the delay and grant registration under section 80G, in line with the principle of substantial justice. 5) In light of the above facts and grounds, the Appellant respectfully prays that this Honourable Tribunal may be pleased to: (a) Quash the rejection order passed by CIT(E), (b) Direct the CIT(E) to grant final registration u/s 80G(5)(iii) (or grant registration directly under powers of the Tribunal or (c) Pass such further orders as deemed fit in the interest of justice.
ITA Nos. 2423&2424/Ahd/2025 Shree Maruti Nandan Charitable Trust vs. CIT(E) Asst.Years –2023-24 & 2025-26 - 10–
6) The Appellant craves leave to, add to, alter or amend, vary, omit, substitute or modify the aforesaid Grounds of Appear or add new grounds of appear as and when advised” 23. The facts in these appeals are that in similar circumstances, grant of registration under Section 80G of the Act was denied by Ld. CIT(E) on account of delay in filing of application by the assessee.
Accordingly, in light of our observations in the preceding paragraphs, the matter is hereby restored to the file of Ld. CIT(E) for de- novo consideration.
Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the combined result, both the appeals are allowed for statistical purposes. This Order pronounced in Open Court on 23/04/2026
Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 23/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 16.04.2026 (Dictated over dragon software) 2. Date on which the typed draft is placed before the Dictating Member 16.04.2026 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 16.04.2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement 23.04.2026 6. Date on which the fair order comes back to the Sr.P.S./P.S 23.04.2026 7. Date on which the file goes to the Bench Clerk 23.04.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order……………………………………
More judgments on Section 12A
- Desire Foundation, Jaipur vs Income Tax Officer, JaipurITA 1646/JPR/2026[2024-25]Status: Disposed21 Oct 2026AY 2024-25
- Sanskardham Nandan, Mehsana vs CIT(Exemption), AhmedabadITA 2980/AHD/2026[2025-26]Status: Disposed16 Oct 2026AY 2025-26
- Global University Foundation, Hyderabad vs CIT(Exemption), HyderabadITA 777/HYD/2026[2026-27]Status: Disposed16 Oct 2026AY 2026-27
- Global University Foundation, Hyderabad vs CIT(Exemption), HyderabadITA 776/HYD/2026[2026-27]Status: Disposed16 Oct 2026AY 2026-27
- Shiva Shiksha Samiti, Deendayal Puram, Up… vs Income-Tax Officer, Ward-Exemption, Agra…ITA 415/AGR/2026[2017-18]Status: Disposed15 Oct 2026AY 2017-18
Latest GST High Court judgments
Search GST case law →- Santa Singh vs. SuperintendentUttarakhand · 27 Oct 2026
- Azaad Builders vs. Assistant Commissioner SGSTUttarakhand · 27 Oct 2026
- M/S Kalra Traders vs. Union Of INDIAUttarakhand · 26 Oct 2026
- Ms Isoft vs. The Commissioner State TaxUttarakhand · 26 Oct 2026
- M/S Sita Enterprises vs. Office Of The CommissionerUttarakhand · 26 Oct 2026
