SHRADHA MUKTAAI TRUST,THANE vs. EXEMPTION WARD, THANE

PDF · subscribers
ITA 708/PUN/2026Status: DisposedITAT Pune13 October 2026AY 2024-20258 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the CIT(E) was empowered to condone the delay in filing the application for registration under the proviso inserted in Section 12A(1)(ac) of the Income Tax Act, 1961, effective from October 1, 2024. The Tribunal noted that the CIT(E) had rejected the application purely on technical and procedural grounds without recording any adverse findings regarding the genuineness of the trust's activities. The Tribunal also found merit in the assessee's argument that the non-obtaining of prior permission from the Charity Commissioner for the loan from the trustee was a procedural lapse, not a violation of Section 12AB(1)(b)(B) of the Act, especially since the genuineness of the trust's activities was not doubted. Citing precedents from co-ordinate benches, the Tribunal decided to set aside the order of the CIT(E) and restore the matter to his file. The CIT(E) was directed to condone the delay if satisfied that there was a reasonable cause and to decide the application afresh, considering the affidavit of the trustee and other submissions, after providing a due opportunity of hearing. The assessee was directed to comply with notices without seeking adjournments. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Shradha Muktaai Trust, filed an application for regular registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, in Form-10AB for Assessment Year 2024-25, but with a delay on April 25, 2025. The Commissioner of Income Tax (Exemption), Pune (CIT(E)), issued notices to verify the trust's activities. Upon review, the CIT(E) found discrepancies, including the delay in filing the application and the acceptance of a loan from a trustee without prior approval from the Charity Commissioner, as required under Section 36A of the Maharashtra Public Trust Act, 1950. Consequently, the CIT(E) rejected the trust's application for registration. The trust appealed this order to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the rejection of the assessee's application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, solely on the ground of delay in filing Form-10AB, was justified, considering the assessee's contention of bona fide reasons for the delay and the availability of a proviso to condone such delays. 2. Whether the acceptance of a loan from a trustee without prior approval of the Charity Commissioner, as required under Section 36A of the Maharashtra Public Trust Act, 1950, constitutes a violation of Section 12AB(1)(b)(B) of the Income Tax Act, 1961, leading to the rejection of the registration application. Assessee's Contentions: The assessee argued that the delay in filing Form-10AB was due to lack of knowledge and erroneous belief regarding the procedure. They contended that the CIT(E) has the power to condone the delay under the amended proviso to Section 12A(1)(ac) of the Act. The assessee also argued that the loan from the trustee was for the trust's objects, and they had attempted to obtain approval, but it was not accepted. They relied on several ITAT Pune Bench decisions, including Shri Ramtirth Godavari Seva Samiti vs. CIT(E), Pune, and Snehabandh Foundation vs. CIT(E), Pune, to support their claims that procedural lapses should not defeat substantive justice and that non-obtaining of prior permission for loans from trustees is a procedural lapse, not a violation of law. Revenue's Contentions: The Revenue relied on the order of the Ld. CIT(E).

Which sections of the Income-tax Act were involved?

Section 12A,Section 12A(1)(ac),Section 12A(1)(ac)(iii),Section 12AB(1)(b)(B),Section 36A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI RAMA KANTA PANDA & Ms. ASTHA CHANDRA

For Appellant: CA Sailee Gujarathi
For Respondent: Shri Amit Bobde, CIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No. 708/PUN/2026 Assessment Year : 2024-25 Shradha Muktaai Trust, The Commissioner of Income Tax 3B/001, Anmol Garden, (Exemption), Shri Malang Road, vs. Room No. 322, 3rd Floor, Kalyan (E), Thane-421306. Income Tax Office, PAN : AAUTS8541G PMT Building, Shankar Seth Road, Pune-411037. (Appellant) (Respondent) Assessee by : CA Sailee Gujarathi (through virtual) Department by : Shri Amit Bobde, CIT-DR Date of Hearing : 28-07-2026 Date of Pronouncement : 13-10-2026 O R D E R PER ASTHA CHANDRA, J.M.:

The appeal filed by the assessee is directed against the order dated 06-12-2025 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”], pertaining to Assessment Year (“AY”) 2024-25.

2.

Briefly stated, the facts of the case are that the assessee is a public charitable trust registered under the Bombay Public Trust Act, 1950 since 2017. It is engaged in various charitable activities including education, medical relief, social welfare and relief to the poor. The assessee was earlier granted registration u/s. 12A of the Act and thereafter the provisional registration u/s. 12AB was granted to the assessee in Form- 10AC, dt. 06-11-2021. As per the newly introduced provisions of section 12A(1)(ac)(iii) of the Act, the assessee filed application in Form-10AB for grant of regular registration, but with a delay on 25-04-2025. On receipt of assessee’s application, in order to verify the genuineness of activities of the assessee-trust, the Ld.CIT(E) issued notices dt. 09-07-2025 and 03-09-

2 ITA No. 708/PUN/2026 2025 calling for certain information/clarification as stated therein. On verification of the details/documents submitted by the assessee, the Ld.CIT(E) noticed certain discrepancies which were communicated to the assessee vide notice dt. 03-09-2025, in response to which the assessee duly filed its reply. Having not satisfied with the reply/explanation of the assessee, the Ld.CIT(E) rejected the assessee’s application on the ground that there was delay in filing the application and the assessee has accepted loan from trustees without prior approval of the Charity Commissioner as required under the provisions of section 36A of the Maharashtra Public Trust Act, 1950.

3.

Aggrieved the assessee is in appeal before the Tribunal raising the following grounds of appeal:

“1. That the order dated 06.12.2025 passed by the Ld. CIT (Exemptions), Mumbai rejecting the application in Form 10AB is illegal, arbitrary and contrary to law. 2. That the Ld. CIT(E) erred in rejecting the application solely on the ground of delay in filing Form 10AB without appreciating that such delay was due to bona-fide and reasonable causes. 3. That the Ld. CITE) failed to appreciate that the activities of the appellant trust are genuine and in accordance with its charitable objects and no adverse finding has been recorded on the genuineness of activities. 4. That rejection of registration on purely technical and procedural grounds defeats the very object of beneficial provisions relating to charitable institutions. 5. That the Ld. CIT(E) ought to have exercised powers to condone delay especially in view of CBDT Circular No.07/2024 dated 25.04.2024 granting relief to similarly placed trusts. 6. That the impugned order has been passed mechanically without considering documentary evidence and submissions placed on record. 7. That the Ld. CITE) failed to appreciate that procedural delays cannot override substantive justice when activities of the trust are admittedly genuine. 8. That the appellant craves leave to add, amend, modify or withdraw any ground of appeal at the time of hearing. 9. The appellant prays that the Hon'ble ITAT may kindly delete the addition and allow the appeal.”

4.

We have heard the Ld. Representatives of the Parties and perused the material available on record and the paper book filed by the Ld.AR on

3 ITA No. 708/PUN/2026 behalf of the assessee. We have also perused the various judicial precedents relied upon by the Ld.AR. Referring to the order of the Ld.CIT(E), the Ld.AR brought to the attention of the Bench that the assessee’s application for final registration u/s. 12A of the Act has been rejected on account of delay in filing of the application and that the trust acquired loan from trustees without prior permission of the Charity Commissioner. He submitted that the delay in filing of the application occurred due to lack of knowledge and erroneous belief of the trustees regarding the procedure of Charitable Trust. Before the Ld.CIT(E), the assessee had submitted detailed replies explaining the reasons for delay and also establishing that the trust has been continuously carrying on genuine charitable activities; there is no change in its objects and the activities carried out by the trust are fully in accordance with the trust deed and requested for condonation of delay by filing an application dt. 24- 04-2025 (pg. 12-13 of the paper book refers). The Ld.CIT(E), however, rejected the assessee’s application without recording any adverse finding regarding the genuineness of the activities/objects of the trust, but purely on technical and procedural grounds without appreciating the bonafide reasons for the delay. The Ld.AR also filed an affidavit of the trustee, Mr. Ram Kumar Harischandra Singh, by way of an additional evidence before the Tribunal stating therein the reasons for delay in filing of the application for registration and prayed that the same may be taken on record (pg. 44-47 of the paper book refers). The Ld.AR further submitted that the Ld.CIT(E) is empowered to condone the delay as per the amended proviso to section 12A(1)(ac) of the Act w.e.f. 1st October, 2024. In support of his contention, the Ld.AR relied on the following decisions of the Co-ordinate Bench of the Pune Tribunal, wherein under the similar set of facts as that of the assessee in the present case, the matter was remanded

4 ITA No. 708/PUN/2026 to Ld.CIT(E) with a direction to condone the delay in filing of the application: i. Shri Ramtirth Godavari Seva Samiti vs. CIT(E), Pune [ITA No. 2602/PUN/2025]; and ii. Pimpri Chinchwad Mahanagar Palika Divyang Bhavan Foundation vs. CIT(E) [ITA No. 2582 & 2583/PUN/2025]

5.

As regards the contravention in relation to the loans obtained from the trustees without Charity Commissioner’s approval, giving the factual background, the Ld.AR submitted that the loan was obtained from the trustee, Mr. Ram Kumar Harischandra Singh for the purpose of the objects of the trust and for construction/acquisition of immoveable property. He submitted that in the affidavit of Mr. Ram Kumar Harischandra Singh placed on record before the Tribunal, he has stated that he had approached the office of the Charity Commissioner for obtaining the required permission, however, his application was not accepted or acknowledged giving the reason that such approval is not required by the trust if loan is not obtained from banks or financial institutions and hence, the Ld.AR submitted that under this bonafide belief, the approval was not sought. Without prejudice, relying on the below decisions of the Co-ordinate Bench of the Pune Tribunal, he submitted that non-obtaining of prior permission of Charity Commissioner for advances/loans is a procedural lapse and not a violation of law as envisaged in section 12AB(1)(b)(B) of the Act: i. Snehabandh Foundation vs. CIT(E), Pune [2025] 213 ITD 125 (Pune); ii. Arham Foundation vs. CIT(E), Pune (ITA No. 1584 & 1585/PUN/2025); iii. Shri Gurumauli Sevabhavi Sanstha vs. CIT(E), Pune (ITA No. 1141 & 1142/PUN/2025)

5 ITA No. 708/PUN/2026

6.

The Ld.DR relied on the order of the Ld.CIT(E).

7.

As stated earlier, the assessee’s application has been rejected by the Ld.CIT(E) on the following two grounds i.e. (i) delay in filing of the application and (ii) acceptance of loan from trustees without prior approval of the Charity Commissioner as per section 36A of the Maharashtra Public Trust Act, 1950. So far as the delay in filing of Form-10AB is concerned, we find that an identical issue had come up before the Co-ordinate Bench of the Tribunal in the case of Pimpri Chinchwad Mahanagar Palika Divyang Bhavan Foundation vs. CIT(E) (supra), wherein the matter was remanded back to the file of the Ld.CIT(E) to decide the application afresh by observing as under: “7. We have heard Ld. Counsels from both the sides and perused the material available on record. We find that admittedly the assessee could not furnish any reply before Ld. CIT, Exemption, Pune. However, we find force in the arguments of Ld. Counsel of the assessee that a proviso has been inserted in section 12A(1)(ac) w.e.f. 01.10.2024 which permits the Commissioner to condone the delay if he considers that there is a reasonable cause for delay in filing the application for registration and then such application shall be deemed to have been filed within time. 8. Considering the totality of the facts of the case, & also in the interest of justice and without going into merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him to decide the application for registration afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to explain the reason of delay in filing of application for registration without taking any adjournment under any pretext, otherwise, Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes. 9. In the result, the appeal filed by the assessee in ITA No.2582/PUN/2025 is allowed for statistical purposes.”

8.

Similar view has been taken by the Co-ordinate Bench of the Tribunal in the case of Shri Ramtirth Godavari Seva Samiti vs. CIT(E)(supra), wherein the Tribunal remanded the matter back to the Ld.CIT(E) with a direction to condone the delay and decide the assessee’s application afresh, holding as under: “4. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee wherein copy of acknowledgement of application seeking post

6 ITA No. 708/PUN/2026 facto permission from Charity Commissioner, Nashik is also enclosed. In this regard, we find that CBDT vide Circular No.7/2024 dated 25-04- 2024 considered & acknowledged the issue of wrong section code & already gave relaxation to the assessee to file application upto 30.06.2024 and the assessee has applied on 08.07.2024 i.e. with a delay of 7 days. Admittedly the provisional registration u/s 12A(1)(ac)(vi) was granted to the assessee on 08.07.2024 for the period starting from assessment year 2025-26 to assessment year 2027-28. As per section 12A(1)(ac)(iii), the assessee was required to apply for final registration at least six months prior to expiry of provisional registration or within six months from commencement of its activities whichever is earlier. In this regard, we find that w.e.f. 01.10.2024 a proviso is inserted in section 12A(1)(ac) which reads as under :- “12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— xxxx (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,— (i) (ii) (iii) (iv) (v) (vi) [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. Accordingly, in the light of above proviso, we find that the Commissioner has been empowered to condone the delay, therefore, we deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to condone the delay and decide the application afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT, Exemption, Pune in this regard and to furnish documents/evidences and case laws, if any, in support of application for registration without taking any adjournment under any pretext, otherwise Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate orders as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes.” 9. Now, coming to the issue of contravention of the provisions of section 36A of the Maharashtra Public Trust Act, 1950, we find that the Ld.CIT(E) has observed that the trust could have obtained ex-post facto permission from the Charity Commissioner, however, it failed to do so. We find that the Tribunal in the decisions (supra), has taken a consistent view in the facts and circumstances of those cases that not obtaining

7 ITA No. 708/PUN/2026 permission from the Charity Commissioner by the assessee-trust for taking loan from its trustees which is utilized for the purpose of achieving its objects and without creating any encumbrances on property of the trust, is a procedural lapse and is not a violation of law as envisaged in section 12AB(1)(b)(B) of the Act. Undisputedly, in the instant case, the objects and activities of the assessee-trust have not been doubted by the Ld.CIT(E) and therefore, there is no dispute or doubt about the genuineness of the activities of the assessee-trust. At the same time, we also find that the trustee of the assessee-trust in his affidavit placed on record before the Tribunal has stated that on approaching the Charity Commissioner for ex-post facto approval, the assessee’s application was not accepted/acknowledged for the reasons which we have already reproduced above. Further, we find some force in the arguments advanced by the Ld. Counsel for the assessee that the Ld.CIT(E) ought to have condoned the delay in filing of the application in view of the proviso inserted in section 12A(1)(ac) w.e.f. 01-10-2024 which permits the Ld.CIT(E) to condone the delay if he considers that there is a reasonable cause for delay in filing the application for registration and then, such application shall be deemed to have been filed within time.

10.

Considering the totality of facts and in the circumstances of the case and in light of the legal position set out above, we deem it fit and in the interest of justice to set aside the impugned order of the Ld.CIT(E) and restore the matter back to his file with a direction to condone the delay in filing of the assessee’s application if he is satisfied that there was a reasonable cause for such delay and consider the assessee’s application for registration u/s. 12A of the Act afresh and as per fact and law more specifically in light of the reasons/explanation stated in the affidavit of the trustee filed by way of an additional evidence before the Tribunal and such other submission as may be made by the assessee during the fresh

8 ITA No. 708/PUN/2026 proceedings, after affording due opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by the Ld.CIT(E) and make its submissions as may be required/called upon without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld.CIT(E) shall be at liberty to pass appropriate order in accordance with law. The grounds raised by the assessee are accordingly allowed for statistical purposes.

11.

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

Order pronounced in the open Court on 13-10-2026

Sd/- Sd/- (RAMA KANTA PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER पुणे/Pune; दिन ांक/Dated : 13-10-2026 TNMM

आिेश की प्रदिदिदप अग्रेदिि/Copy of the Order is forwarded to: 1. अपीि र्थी / The Appellant प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. ग र्ड फ ईि / Guard file. आदेशानुसार/ BY ORDER, Sunil Kumar Digitally signed by Sunil Kumar More // True Copy // More Date: 2026.10.24 12:55:15 +05'30' Assistant Registrar आयकर अपीिीय अदिकरण ,पुणे / ITAT, Pune

More judgments on Section 12A

All 6,064 judgments and leading authorities on Section 12A →

Recent GST High Court judgments

Search GST case law →