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Facts
The assessee trust filed an application for registration under Section 12AB and 80G of the Income Tax Act in Form 10AB. The CIT(E) rejected the application, holding it to be incomplete and filed after the due date.
Held
The Tribunal held that a liberal view should be taken for condoning delay in filing applications for registration, especially when substantial justice is involved. The CIT(E) was directed to treat the application as filed on time and decide it on merits.
Key Issues
Whether the delay in filing the application for registration under Section 12AB and 80G is condonable, and whether the CIT(E) erred in rejecting the application on technical grounds.
Sections Cited
12A(1)(ac)(iii), 12AB, 80G, 1961, 17A(2)
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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM
O R D E R Per Kavitha Rajagopal, J M: These are captioned appeals filed by the assessee trust, challenging the order of the learned Commissioner of Income Tax (Exemptions), Mumbai (‘ld. CIT(E)’ for short), rejecting the application made by the assessee in form 10AB u/s. 12A(1)(ac)(iii), seeking registration u/s. 12AB and Section 80G of the Income Tax Act, 1961 (‘the Act'), vide order dated 22.01.2025.
As the facts are identical in both these appeals, we hereby pass a consolidated order by taking as a lead case.
The assessee has raised the following grounds of appeal:
1. & 1863/Mum/2025 (A.Y. N.A.) Amba Shanti Foundation “1. On the facts and circumstances of the case and in the law, Commissioner of Income Tax (Exemptions), hereinafter referred to as CIT(Exemptions), has erred in not allowing the application for regularization of provisional approval in Form 10AB due to late filling of the application.
2. The CIT(Exemptions) has failed to appreciate the fact that the appellant has filed Form 10AB on 23.07.2024 before the commencement of major activities of the organization on 13.08.2024.
3. The CIT(Exemptions) has failed to appreciate the fact that the extended due date vide circular no. 07/2024 dated 25.04.2024 for filing of application for Form 10AB was 30.06.2024, whereas the appellant has filed the application on 23.07.2024 causing slight delay. The act of late filing of application clearly shows the intention of the appellant to rectify the procedural lapse for regularization of provisional approval in Form 10AC obtained on 23.02.2022 which was valid from 23.02.2022 to AY 2024-25.
4. The CIT(Exemptions) has erred in mentioning that no response has been received by the appellant against notice issued vide DIN No. ITBA/EXM/F/EXM43/2024- 25/1071251316(1) dated 16.12.2024 requesting to furnish the complete set of documents mentioned.”
Brief facts of the case are that the assessee is a trust and is registered as non- governmental, non-profitable and secular voluntary organization and its main objectives is to initiate various socio-economic, educational, health, community development and environmental activities for the welfare and the development of the rural and urban sectors. It is observed that the assessee trust had filed an application in form 10AB u/s. 12A(1)(ac)(iii) of the Act, for registration u/s. 12AB of the Act, which the ld. CIT(E) held to be incomplete and without complete documents that are required to be accompanying along with the application. The ld. CIT(E) issued notice to the assessee to furnish the required documents as per Rule 17A(2) of the IT Rules, 1962 and the assessee has not responded to the same. The ld. CIT(E) further observed that the assessee had obtained provisional approval in form 10AC, dated 23.02.2022 which & 1863/Mum/2025 (A.Y. N.A.) Amba Shanti Foundation is valid from A.Y. 2022-23 to 2024-25. On perusal of the same, the ld. CIT(E) held that the assessee trust should have applied either within 6 months of the commencement of its activities or atleast 6 months prior to the expiry of the period of the provisional approval which falls before September, 2023 whichever is earlier. The ld. CIT(E) held that application to be not valid for the reason that the trust has filed an application for regularization of provisional registration only on 24.07.2024 and even otherwise, the extended due date for filing the application was 30.06.2024 as per circular no. 07/2024 dated 25.04.2024. The assessee’s contention that it did not have any procedural knowledge of obtaining the final registration certificate in Form 10AD within the specified due date was not accepted by the ld. CIT(E) and thereby the delay in filing form 10AB for grant of registration u/s. 12A was not condoned by the ld. CIT(E).
Aggrieved the assessee is in appeal before us, challenging the impugned order of the ld. CIT(E).
We have heard the rival submissions and perused the materials available on record. The only moot issue that requires adjudication is whether the assessee is entitled to registration u/s. 12A after the specified due date and also the extended due date, for filing an application in form 10AB. It is observed that the extended due date for filing form 10AB as per CBDT circular no. 07/2024 dated 25.04.2024 was 30.06.2024, where the assessee contends that it had filed form 10AB on 24.07.2024 with a delay of 23 days in filing the application for regularization of registration u/s. 12AB. It is observed that there is a catena of decision of the Tribunal as well as the Hon’ble High Courts where a liberal view has been taken in case of condoning the delay in filing application for & 1863/Mum/2025 (A.Y. N.A.) Amba Shanti Foundation registration in form 10AB. We would place our reliance on the decision of the Hon’ble Delhi High Court in the case of Director of Income-tax (Exemption) vs. Vishwa Jagriti Mission [2013] 30 taxmann.com 41 (Delhi)/[2013] 213 Taxman 65 (Delhi)/[2014] 268 CTR 444 (Delhi)[21-12-2012], where after considering various decisions had laid down the principles that are to be taken into consideration for condoning such delay. We hereby extract the relevant portion of the said order for ease of reference: “22. The following general principles were laid down and it is these principles which guide the Court in approaching the question of condonation of delay: - "And such a liberal approach is adopted on principle as it is realized that:
1. 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner.
4. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
6. It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
From the above, it can be inferred that the Hon’ble High Court has held that a liberal view has to be taken in case of condoning the delay which according to the said decision is a mere technicality which if found genuine has to be decided in favour of the assessee. Even otherwise, the extended due date by the board vide circular no. 07/2024 is also evident that the intention was to provide one more opportunity to the applicant trust for & 1863/Mum/2025 (A.Y. N.A.) Amba Shanti Foundation filing the application till 30.06.2024, which rather has not adhered strictly to the stipulated time limit prescribed by the Act.
From the above observation, we deem it fit to extend the assessee with one more opportunity to file the application in form 10AB for regularisation of provisional approval granted to the assessee, before the ld. CIT(E). The ld. CIT(E) is directed to treat the application as being filed on time without any delay and to decide the assessee’s application on the merits and in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purpose.