SRI AUROBINDO TRUST,CHENNAI vs. CIT, EXMEPTIONS,, CHENNAI

At the outset, we find that there is a delay of 59 days in filing the present appeal by the assessee. In this regard, the assessee-trust, through its Trustee, has filed a petition seeking condonation of delay, duly supported by an affidavit explaining the circumstances which prevented the assessee from filing the appeal within the prescribed period of limitation. It has been submitted that the income-tax matters and other statutory compliances of the assessee-trust were being handled by a professional consultant and that the Trustees were under a bona fide belief that all notices, communications and orders issued by the Income-tax Department would be duly attended to and complied with by the said consultant in accordance with law. It has further been stated that the impugned order was initially received by the consultant, who failed to bring the same to the knowledge of the Trustees in a timely manner. Consequently, the Trustees remained unaware of the passing of the impugned order, resulting in the delay in preferring the present appeal within the statutory period. Upon perusal of the affidavit and after affording due opportunity of hearing from both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeal by 59 days is hereby condoned, and the appeal is admitted for adjudication on merits.

The assessee is a trust, engaged in social, spiritual and gosala activities and filed an application dated 02.05.2025 in Form 10AB under Rule 17A of the IT Rules, 1962 seeking registration under item (ii) of clause (ac) of sub-section (1) of section 12A of the Act. The ld.CIT(E) rejected the said application dated 24.12.2025 on the sole ground of delay in filing the application by 306 days.

The case of the ld.CIT(E) is as follows: The case of the ld.CIT(E) is that the assessee filed its application in Form 10AB u/s.12A(1)(ac)(ii) of the Act. The said provision is applicable to institutions that hold a valid registration for five

Additionally, upon examining the facts and partial reply along with its documents submitted by the assessee, the ld.CIT(E) observed that the assessee had not applied its resources toward charitable purposes, but rather for religious and general administrative purposes, and failed to demonstrate sufficient cause for the condonation of the delay in filing. Consequently, the ld.CIT(E) rejected the application filed by the assessee. Aggrieved by the order passed by the Ld.CIT(E), the assessee is in appeal before us.

The ld.AR submitted that the first Form No.10AB was filed within time, seeking registration u/s.12AB of the Act. However, owing to lack of tax-practice knowledge, the assessee bona fide believed that the compliance process stood completed, and remained unaware of the notices issued, resulting in the rejection of the said application. Further, the ld.AR argued that the ld.CIT(E) failed to examine the objects and genuineness of the activities of the assessee, which is primary requirement u/s.12A of the Act and the ld.CIT(E) has not brought any material on record to show that the activities of the assessee are not genuine or not in accordance with law. In view of the above, the ld.AR

Per contra, the Ld.DR supported the views taken by the ld.CIT(E) and argued that the rejection is justified and thus prayed that the appeal of the assessee may be dismissed.

We have heard the rival submissions and perused the material available on record. The principal issue for our consideration is whether the ld.CIT(E) was justified in rejecting the application seeking registration u/s.12AB of the Act on the ground of delay in filing Form No.10AB, without appropriately considering the assessee’s explanation for such delay. It is evident from the records that the assessee’s application dated 02.05.2025 was filed beyond the prescribed time limit. The assessee has explained that its income-tax compliance matters were entrusted to a consultant and that, owing to its bona fide belief that the requisite compliances had been duly attended to, it remained unaware of the notices issued in connection with the application. Consequently, the assessee could not effectively pursue the application before the ld.CIT(E).

In this regard, we observe that the Finance (No. 2) Act, 2024, with effect from 01.10.2024, inserted a proviso to clause (ac) of sub-section (1) of section 12A of the Act, empowering the Principal Commissioner or Commissioner to condone the delay in filing an application under the said clause, where the delay is supported by reasonable cause. In view of the aforesaid statutory provision, a belated application cannot be rejected merely on the ground that it was filed beyond the prescribed due date, without duly considering the explanation furnished by the assessee and the applicability of the condonation provision. In

We further observe that the ld.CIT(E) has noted that the assessee held only provisional registration for a period of three years and, therefore, the application was required to be considered u/s.12A(1)(ac)(iii) of the Act, rather than u/s.12A(1)(ac)(ii) of the Act. The ld.CIT(E) has also made certain observations regarding the utilisation of the trust’s resources towards religious and general administrative purposes. However, the eligibility of the assessee for registration is required to be determined upon examination of its objects, the genuineness of its activities and the relevant documentary evidence in the light of the applicable provisions of the Act. The nature of the expenditure incurred by the trust, by itself, would not dispense with the need to examine the objects and activities of the trust as a whole. Accordingly, we consider it appropriate to remit the matter to the file of the ld.CIT(E) for fresh adjudication on merits after condoning the delay.

In view of the foregoing discussion, we set aside the impugned order dated 24.12.2025 passed by the ld.CIT(E) and remit the matter to his file with a direction to condone the delay of 306 days in filing the application in Form No.10AB and treat the application as having been filed within the prescribed time. The ld.CIT(E) shall thereafter consider the application under the appropriate provision of section 12A(1)(ac) of the Act, having regard to the provisional registration held by the assessee, and adjudicate the same on merits in accordance with law. The ld.CIT(E) shall examine the objects of the

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

अपीलाथ'/Appellant 2. ()यथ'/Respondent 3.आयकर आयु/त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 0वभागीय (�त�न�ध/DR 5. गाड% फाईल/GF