SMT GAURIBEN MADAN CHARLA JAIN CHARITABLE TRUST,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), MUMBAI

In ITA No. 7035/Mum./2026, the appellant had initially filed an application in Form No. 10AB seeking regularisation of its provisional registration. In the said application, the appellant had inadvertently mentioned clause (ii) of section 12A(1)(ac), whereas, admittedly, the appellant was holding provisional registration and the relevant provision applicable to it was clause (iii) of section 12A(1)(ac). The learned Commissioner (Exemptions), noticing the said mistake, provided an opportunity to the appellant. In response, the appellant admitted that the application had been filed under the wrong clause by mistake and requested that the registration be granted. The learned Commissioner (Exemptions), however, rejected the application on the ground that there was no provision under the Act permitting rectification or amendment of the clause under which the application had originally been filed.

The appellant has challenged the aforesaid order, inter alia, contending that the mistake in mentioning the particular clause of section 12A(1)(ac) was a curable procedural defect and that, while the original application was pending before the learned Commissioner (Exemptions), the appellant had filed another Form No. 10AB under the correct clause, namely clause (iii) of section 12A(1)(ac), together with a request for condonation of delay. It has been contended that the subsequent application and the request for condonation were made before the disposal of the original application and, therefore, the learned Commissioner (Exemptions) ought to have considered the subsequent application and the request for condonation instead of rejecting the original application merely on the ground that the wrong clause had been mentioned.

In ITA No. 7034/Mum./2026, the subsequent application filed in Form No. 10AB under section 12A(1)(ac)(iii) was rejected by the learned Commissioner (Exemptions) on the ground that it was filed beyond the prescribed period. The learned Commissioner (Exemptions) noticed that the appellant had obtained provisional registration in Form No. 10AC dated 06.04.2023 and proceeded on the basis that the application for regularisation ought to have been filed by the end of October, 2023. Since the application under the correct clause was filed on 28.08.2025, the same was treated as having been filed after a delay of more than 21 months. The learned Commissioner (Exemptions) accordingly rejected the application, observing that no reasonable cause for the delay had been demonstrated.

Before us, none appeared on behalf of the appellant. The learned Departmental Representative (ld.DR) was present and relied upon the respective orders passed by the learned Commissioner (Exemptions). He submitted that the orders passed by the learned Commissioner (Exemptions) were in accordance with law and deserved to be upheld.

We have considered the submissions of the ld.DR and carefully perused the material available on record, including the respective grounds of appeal filed by the appellant and the impugned orders passed by the learned Commissioner (Exemptions). Since there was no representation on behalf of the appellant at the time of hearing, the conclusions recorded hereinafter are arrived at independently on examination of the grounds raised by the appellant and the material forming part of the record.

On consideration of the matter, we find that certain undisputed facts are relevant for deciding the controversy. The appellant was granted provisional registration in Form No. 10AC dated 06.04.2023 for the period from Assessment Year 2023-24 to Assessment Year 2025-26. Thereafter, the appellant filed its first application in Form No. 10AB on 28.02.2025. In that application, the appellant mentioned section 12A(1)(ac)(ii), whereas the application for regularisation of provisional registration was required to be made under section 12A(1)(ac)(iii). The mistake in mentioning the particular clause is not in dispute. It is equally evident from the record that the appellant subsequently filed another application in Form No. 10AB on 28.08.2025 under the correct clause, namely section 12A(1)(ac)(iii), together with a request for condonation of delay.

The significance of the aforesaid factual position lies in the fact that the second application was not filed after the first application had been disposed of. The second application dated 28.08.2025 was filed during the pendency of the first application dated 28.02.2025. The first application was disposed of only subsequently, by order dated 08.09.2025. Therefore, when the learned Commissioner (Exemptions) passed the order dated 08.09.2025 rejecting the first application on the ground that it had been filed under the wrong clause, the subsequent application filed under the correct clause on 28.08.2025 was already on record and was pending consideration. The said subsequent application was accompanied by a request for condonation of delay.

In these circumstances, we find substance in the grievance raised by the appellant in ground No. 3 of the appeal against the order dated 08.09.2025. The first application contained a mistake with reference to the particular clause of section 12A(1)(ac). However, while that application was pending, the appellant filed a further application under the correct clause along with a request for condonation of delay. Therefore, the subsequent application and the request for condonation were relevant for determining the appellant's claim for registration and could not be divorced from the proceedings relating to the first application. The rejection of the first application merely on the ground that the wrong clause had been mentioned, without the matter being considered in the context of the subsequent application already filed under the correct clause, resulted in the appellant's substantive claim not being examined on merits.

We further find that the second application dated 28.08.2025 was rejected by the learned Commissioner (Exemptions) by order dated 27.03.2026 by treating the entire period from the prescribed due date up to the date of the second application as delay of more than 21 months. While considering the question of delay, however, it is material that the appellant had already approached the Department by filing its first application in Form No. 10AB on 28.02.2025. The said application remained pending before the learned Commissioner (Exemptions) and, during its pendency, the appellant filed the second application under the correct clause on 28.08.2025. Therefore, the conduct of the appellant has to be considered in its entirety and the period during which the first application remained pending cannot be regarded in the same manner as a period during which the appellant had taken no steps whatsoever for seeking registration.

We also take note of the fact that the statutory scheme relating to registration of trusts and institutions underwent substantial changes pursuant to the Finance Act, 2020, with effect from 01.04.2021. The amended scheme contemplated provisional registration, subsequent registration or regularisation and renewal in different circumstances, with corresponding provisions prescribing the manner and time within which applications were required to be filed. In the context of such changes, there was scope for genuine difficulty and confusion regarding the precise clause under which an application was required to be filed and the sequence in which the applications relating to provisional and regular registration were required to be made. In the present case, the appellant had, in fact, approached the Department by filing the first application on 28.02.2025, though under an incorrect clause, and thereafter, while that application was pending, filed the second application under the correct clause on 28.08.2025 along with a request for condonation of delay.

Having regard to the totality of these circumstances, we are of the considered view that the delay in filing the second application under section 12A(1)(ac)(iii) deserves to be condoned. The appellant had not remained completely inactive in pursuing its claim for registration. It had initially filed an application on 28.02.2025 and, while the same was pending, filed another application under the correct statutory provision on 28.08.2025. The mistake in the first application related to the particular clause under which the application was made, and the subsequent application under the correct clause was filed even before the first application came to be disposed of on 08.09.2025. These circumstances, considered along with the changes in the statutory scheme relating to registration, constitute sufficient circumstances for condoning the delay in filing the second application.

Accordingly, the delay in filing the application dated 28.08.2025 under section 12A(1)(ac)(iii) is hereby condoned. The application dated 28.08.2025 is required to be considered by the learned Commissioner (Exemptions) on its merits in accordance with law. Consequently, the order dated 27.03.2026 passed by the learned Commissioner (Exemptions) rejecting the said application merely on the ground of delay cannot be sustained and is accordingly set aside.

As regards the first application dated 28.02.2025, the same was admittedly filed under an incorrect clause, namely section 12A(1)(ac)(ii), and the application under the correct clause was subsequently filed on 28.08.2025. We, therefore, do not direct grant of registration on the basis of the first application dated 28.02.2025. However, since the subsequent application under the correct clause had already been filed before the first application was disposed of, and since the delay in filing the subsequent application has now been condoned, the order dated 08.09.2025 is also set aside to the extent necessary to facilitate consideration of the subsequent application dated 28.08.2025 in accordance with law.

It is made clear that, by condoning the delay and restoring the application dated 28.08.2025, we have not expressed any opinion on the substantive eligibility of the appellant for registration under section 12AB of the Act. The learned Commissioner (Exemptions) shall examine the application independently on merits and shall arrive at the requisite satisfaction in accordance with the provisions of the Act. The appellant shall furnish such relevant documents, evidences and other material as may be required in support of its claim for registration, and the learned Commissioner (Exemptions) shall consider the same and pass an appropriate order in accordance with law after affording reasonable opportunity to the appellant.

In view of the foregoing discussion, both the impugned orders dated 08.09.2025 and 27.03.2026 are set aside and the matter is restored to the file of the learned Commissioner of Income-tax (Exemptions), Mumbai, for de novo adjudication, with the specific direction that the application dated 28.08.2025 filed under section 12A(1)(ac)(iii) shall be considered on merits after condoning the delay. The learned Commissioner (Exemptions) shall independently examine the claim of the appellant for registration under section 12AB in accordance with law. We make it clear that nothing contained in this order shall be construed as an expression of opinion on the merits of the appellant's claim for registration.

In the result, both the appeals filed by the appellant are treated as allowed for statistical purposes.