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Facts
The assessee trust was granted provisional registration and was required to file for regular registration within 6 months of its commencement or 6 months prior to expiry of provisional registration. The assessee filed its application for regular registration with a delay of 38 days after the extended due date.
Held
The Tribunal held that the Commissioner ought to have considered the application on merits after giving the assessee an opportunity to furnish requisite details.
Key Issues
Whether the Commissioner was justified in rejecting the application for registration solely on the ground of delay without considering the merits and providing an opportunity for furnishing details, especially when the delay was minor and for bonafide reasons.
Sections Cited
12AB, 12A(1)(ac)(iii), 250
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Before: SHRI ANIKESH BANERJEE & SMT. RENU JAUHRI
आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Income Tax Department ITBA/EXMF/EXM45/2024-25/1073641154(1) CIT(Exemptions), Mumbai 24.02.2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year: NA.
The assessee has raised the following grounds:
1. Kidney Warriors foundation “1. The Learned Commissioner of Income Tax (Exemptions) erred in rejecting the appellant’s application for registration under section 12AB of the Act only on the ground of delay in filing of application for renewal.
2. The learned commissioner of Income Tax (Exemptions) ought to have condoned the delay in filing of application for renewal, in view of the power of condonation of delay having been delegated to the commissioner by the Central Board of Direct Taxes.
3. The learned commissioner of Income Tax (Exemption) failed to appreciate that there was a delay in filing the application due to a genuine misunderstanding of the due date of filing application for renewal.
4. The learned commissioner of Income Tax (Exemptions) erred in rejecting the appellant’s application without considering details submitted by the appellant in support of the genuineness of the activities being carried out.”
Brief facts of the case are that the assessee trust was granted provisional registration as per Form 10AC issued on 24.09.2021. Thereafter, the application for regularisation was required to be filed at least 6 months prior to the expiry of period of provisional registration or within 6 months of commencement of its activities whichever is earlier, as per the provisions of Section 12A(1)(ac)(iii) of the Act. Ld. CIT(E) observed from the documents that the trust had been undertaking charitable activities since 2014, and therefore, it should have filed the application in Form 10AB for regularisation within 6 months of obtaining provisional registration i.e. by 31.03.2022. Since the applicant had filed the application on 10.08.2024, it was treated on account of being beyond time and the application for condonation of delay was rejected. After noting that the assessee had failed to file the application for regular registration by due date despite several extensions granted by the CBDT, the last one being vide Circular No. 7/24 granting extension till 30.06.2024. As the assessee had failed to file the application even by the extended due date, Ld. CIT(E) rejected his application as well as regular for condonation of delay of 38 days.
Kidney Warriors foundation
Aggrieved with the order of Ld. CIT(E), the assessee has preferred an appeal before the Tribunal. Before us, Ld. AR has contended that there was delay in filing of application due to genuine misunderstanding regarding the due date. It has been submitted that the provisional registration was granted on 24.09.2021 which was valid for a period of 3 years. He has further submitted that, all the relevant documents regarding its activities were submitted to establish the genuineness as required by Ld. CIT(E). Thereafter, vide a show cause notice dated 11.02.2025 was received seeking copy of provisional registration and audited financial statements which were also made available. However, vide order 24.02.2025, Ld. CIT(E) rejected the application on merits as well as on account of delay in filing of application.
Ld. AR explained that the CBDT had repeatedly extended the due date for filing of applications for various compliance keeping in view the difficulties faced by the entities in understanding and complying with the provisions under the new regime. As per the circular dated 25.04.2024, the last extension for filing the application granted by the CBDT was till 30.06.2024. The assessee has filed its application on 10.08.2024 resulting in a minor delay of 38 days. Ld. AR has further, placed reliance on various decisions of the Co-ordinate Benches with regard to rejection of application for minor delays in favour of the assessees specifically, in a: Baburao Chandere Social Foundation Vs CIT(E) 2025(6) TMI 1057 -ITAT Pune Similar facts were involved. The assessee had furnished Kidney Warriors foundation all the details and there was a delay of 27 days and, therefore, considering the totally of the facts and in the interest of justice, the issue of granting registration was restored to the file of Ld. CIT(E) with a direction to adjudicate it afreshly the co-ordinate bench.
In view of the above facts and circumstances as well as the decision of the co-ordinate bench, Ld. AR has requested that the matter may be restored to the Ld. CIT(E) for a fresh decision on merits.
6.1. Ld. DR, on the other hand, has supported the decision of Ld. CIT(E) on the ground that even the extended time for filing the application for regular registration had lapsed and no reasonable cause for delay had been established by the assessee while seeking condonation of delay.
We have heard the rival submissions and perused the material available before us. Admittedly, the assessee had duly filed the application for provisional registration which was granted vide order dated 24.09.2021 and was valid for 3 years. The assessee was required to furnish its application for regular registration by 30.06.2024 in view of the extended timeline available. However, the application could only be filed on 07.08.2024 with a minor delay of 38 days which was for genuine and Bonafide reasons.
7.1 We are of the considered opinion that the Ld. CIT(E) ought to have considered the application on merits after giving due opportunity to the assessee to furnish requisite details. Respectfully following the decision of the Kidney Warriors foundation co-ordinate bench cited by the Ld. AR, we hereby restore the matter to the Ld. CIT(E) for fresh adjudication on merits after giving due opportunity to the assessee to furnish requisite details regarding its activities.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 31.07.2025. Sd/- Sd/- ANIKESH BANERJEE RENU JAUHRI (न्यानयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 31.07.2025 दिव्य रमेश न ुंिग वकर/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER,