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Facts
The assessee was granted provisional registration under Section 80G(5) of the Income Tax Act, valid from March 23, 2022, to Assessment Year 2024-25. They filed an application for regular registration on March 18, 2025, which was rejected by the Commissioner of Income Tax (Exemptions) due to a delay of over 17 months.
Held
The Tribunal held that the delay in filing the application for regular registration was caused by an inadvertent mistake and misconception by the assessee. Considering the assessee is an old entity with a valid registration since 1996 and had already obtained registration u/s 12A, the delay was condoned. The matter was restored to the CIT(E) for fresh consideration on merits.
Key Issues
Whether the delay in filing the application for regular registration under Section 80G(5) of the Income Tax Act can be condoned.
Sections Cited
80G(5), 12A, 254(1), 12A(1)(ac)(iii), 119
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRYSHRI GIRISH AGRAWAL
O R D E R Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 29.09.2025, impugned herein, passed by Ld. Commissioner of Income Tax (Exemptions), Mumbai [in short Ld. Commissioner] u/s 80G(5) of the Income Tax Act, 1961, [in short ‘the Act’] for the A.Y. 2025-26.
Rashtra Tej Manch 2. In the instant case, the Assessee was granted a provisional registration u/s 80G(5) of the Act, on dated 23.03.2022 valid from 23.03.2022 to Assessment Year 2024-25 and therefore the Assessee filed an application for regular registration u/s 80G(5) of the Act, in Form -10AD on dated 18.03.2025, which has been rejected by the Ld. Commissioner, vide impugned order on the reason that the Assessee’s trust has filed application for regularization of the provisional approval after delay of more than 17 months, therefore it is not valid as per the provisions of Section 80G(5) of the Act, as the application is beyond permissible time limit.
The Assessee before us has claimed that due to inadvertent mistake and on misconception, could not file the Form – 10AD within the time prescribed, as the Assessee understood that because he has already got approved the registration u/s 12A of the Act, permanently and/or regular registration and also having provisional registration u/s 80G of the Act, therefore no further extension/regular registration of the registration u/s 80G of the Act, was required.
On the contrary, the Ld. DR refuted the claim of the Assessee.
We have heard the parties and perused the relevant material available on record. Admittedly, the Assessee is an old entity having been registered with the Exemption Department of the Revenue in the year 1996, and since then was enjoying the registration u/s 80G of the Act. Further, the Assessee is having valid registration u/s 12A of Rashtra Tej Manch the Act, which is still in existence. We further observe that the identical situation as involved in this case has also been dealt with by the Hon’ble Coordinate Bench of the Tribunal in the case of Mohanji Bharat Welfare Foundation Vs. CIT(Exemptions) in [ITA No.2617/M/2025 decided on 14.10.2025], wherein, the Hon’ble Coordinate Bench of the Tribunal not only considered the identical facts and circumstances but also various judgments concerning the issue and ultimately condoned the delay in filing of regular registration application u/s 80G of the Act, by observing and holding as under:-
13. Further with regard to whether the Tribunal can condone the delay in filing the Form 10AB u/s 80G of the Act, the Ld. Coordinate Bench of ITAT Surat in Swach Vapi Mission Trust (supra) has held that the Tribunal is a final fact finding authority, and based on the assessee facts and undue hardship created by the clause (iii) of 3rd proviso of section 80(5) of the Act, the Tribunal may condone the delay in filing the Form No.10AB, u/s 80G(5) of the Act. Therefore, the Tribunal may condone the delay in filing the Form No.10AB, u/s 80G(5) in the interest of justice. In that regard the Coordinate Bench of Surat relied the judgment of Hon'ble Delhi High Court in the case of DCIT(Exemption) vs. Vishwa Jagriti Mission [2013] 30 taxmann.com 41 (Delhi)/[2013] 213 Taxman 65 (Delhi), wherein it was held in para 18 that the question 'whether there was sufficient cause for the delay is also a question of fact. The Hon'ble Delhi High Court relied on the decision of Hon'ble Supreme Court in the case of Udhaydas Kewalram v. CIT [1967] 66 ITR 462 (SC) wherein the Hon'ble Supreme Court held that the Income-tax Appellate Tribunal performs a judicial function under the Indian Income-tax Act and it is vested with authority to determine finally all questions of fact. It is further held that the Legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on the merits. The expression sufficient cause" employed by the Legislature is adequately elastic to enable the courts to apply the law in justice that being the life-purpose of the existence of the institution of courts. The acceptance of the explanation furnished should be the rule and refusal, an exception, more so when no negligence or inaction or want of bona fides can be imputed to the defaulting party. It was further held that the court cannot set aside the Tribunal's finding of fact if there is Rashtra Tej Manch some evidence to support that finding even though the court itself might have come to a different conclusion upon the evidence.
It is to be noticed that the condonation of delay is sought by the assessee before the Ld. CIT(E) alleging those facts, which in the facts and circumstances, makes out a sufficient cause for condonation of delay. Since the Tribunal is the last fact finding authority, hence this question whether the assessee is entitled for condonation of delay in filing the Form 10AB, u/s 80G(5) of the Act and its determination is within the domain and power of the Tribunal because the Tribunal may pass such orders thereon as it thinks fit(reference section 254(1) of the Act). The reliance placed by Ld. DR on the case of Sila for Change Foundation vs. CIT(E), & 4275/Mum/2024 order dated 20.12.2024 is not applicable to the facts of the case in hand because in the said case, it was held that mere existence of objet clauses permitting activities outside India is sufficient ground to deny or cancel registration u/s 12AB and consequently u/s 80G of the Act, even if no such activity has yet been undertaken. The facts of the said case are also different from the facts of the present case because in the said case the assessee has failed to modify the object clause despite multiple opportunities given, thereby justifying the cancellation, but in the case in hand, the assessee has already taken required steps to modify the object clause by removal of provision of spending money outside India and we have no reason to disbelieve the affidavit filed in that regard which is placed at page no. 335 to 430 of the Paper Book 2.
15. The copy of the proposed amendment to the MOA of the Appellant, along with a copy of the acknowledgement for Form GNL-1 filed by the Appellant with the Ministry of Corporate Affairs (MCA) has been placed at page no. 283 to 294 of the paper book 1 and copy of Resolution passed by the Board of Directors of the Appellant clarifying that the clause in the MoA granting power to apply funds outside India is a drafting error and is proposed to be rectified is placed at page no. 295 of the paper book 1.
16. Therefore, in view of the above facts, we are of the considered opinion that the case relied by Ld. DR is of no help and does agitate against the claim of the assessee for regularization of provisional registration of the assessee u/s 12AB of the Act.
17. As has already been discussed since the provisional registration granted vide Form 10AC was valid from 09.02.2022 to AY 2024-25 and since the trust is old entity carrying out its charitable activities much before granting of provisional approval, therefore assessee is entitled to get regular registration u/s 12AB of the Act, by moving an application 6 months before the expiry of provisional approval i.e. 6 months prior to 31 March 2025 and the said date would be 30th September 2024. The application was filed on 3rd August 2024, therefore it is well within the time limit. However in the affidavit filed by the Director of the assessee Rashtra Tej Manch company, it is categorically admitted that the provisional registration as per Form 10AC u/s 12AB of the Act was lapsed on 31 March 2024, though it seems to be misinterpretation of the provisional registration granted as per Form 10AC of the Act. However, it is to be considered that the provisional registration is lapsed on 31.03.2024 and the CBDT extended the registration till 30th June 2024; as discussed by us, the reasons for condonation of delay as elaborated in the affidavit of the director of the assessee company constitute sufficient cause for seeking condonation of delay. In these facts and circumstances, the Ld. CIT(E) ought to have considered the request for condonation of delay. Moreover the Parliament has amended section 12A(1)(ac)(iii) of the Act by adding proviso by Finance (No.2) Act, 2024 w.e.f. 01.10.2024 which provides as under:- "Where the application is filed beyond the time allowed in sub clauses (i) to (vi), the Principle 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 the time.”
18. Thus, the above provision has given power to the Principle Commissioner or Commissioner to condone the delay in addition to section 119 of the Act which empowers the CBDT to issue orders and instructions to subordinate income tax authorities regarding condonation of delay to the tax payers who have missed statutory deadlines due to genuine hardship. Since the assessee has already taken necessary steps for carrying out amendments in the objectives of the assessee to bring the parameters of section 11 and 12 of the Act by removing the provision of spending charitable amount outside India or carrying out activity outside India, therefore a holistic approach was required to be adopted by Ld. CIT(E) by considering those amendments in the objective clause which will be effective after approval of the registrar of the companies because the assessee is a private limited company incorporated under the Companies Act. The objection of the Ld. DR regarding amendment of the said objective clause after the rejection of the application, does not hold water because it is a settled law that carrying out the activity outside India and spending of the money for charitable purpose outside India can be considered only at the time of grant of exemption to the said amount and the same is not required to be considered at the time of granting regularisation of registration u/s 12AB by filing Form 10AB.
19. In the given facts and circumstances, we are of the considered opinion that the assessee has made out sufficient cause for condonation of delay in filing the application beyond the period of limitation which was elapsed on 31.03.2024 as mentioned in the affidavit and is to be considered as such notwithstanding that the provisional registration was valid till AY 2024-25. Under these circumstances, we find it a fit case to condone the delay and the delay in filing the application u/s 12A in Form Rashtra Tej Manch 10AB seeking regularization of registration u/s 80G(5)(iii) of the Act, is accordingly condoned. Accordingly, we restore the matter to the file of Ld. CIT(E) to consider the request of the assessee for regular registration on merit and to verify the fact of the amendments made out in the objective clauses, if the same has been incorporated in the Memorandum of Association with the approval of the competent authority or not. Once the Ld. CIT(E) is satisfied in that regard, the Ld. CIT(A) is directed to consider for granting regular registration to the assessee and decide the matter afresh. The question no. 1 enumerated by us is decided in affirmative due to admission in affidavit of the director of the assessee regarding admission of lapse of provisional approval on 31.03.2024. The question no. 2 is also decided in affirmative holding that the Tribunal u/s 254(1) of the Act as well as Ld. CIT(E) u/s 12A(1)(ac)(iii) (proviso) has power to condone the delay. Accordingly, the grounds raised by the assessee are allowed in above terms.”
We further observe that the Hon’ble Coordinate Bench of the Tribunal recently in the case of Anybody can Help Foundation vs. Income-tax Officer (Exemptions) [ITA No.7245/M/2025 decided on 06.01.2026] has also dealt with identical issue, as involved in the instant case, such as the provisional registration under that particular case was available upto Assessment Year 2024-25 and therefore the Assessee filed application in Form – 10AB on dated 01.03.2025 u/s 80G(5) of the Act, for regular approval/registration.
The Hon’ble Coordinate Bench also considered the factual aspect that as per Assessee, it had commenced its activities much prior to the grant of provisional approval and prior to the introduction to the provisional registration w.e.f., 01.04.2021 and ultimately set aside the impugned order and remanded the case to the file of the then Ld. CIT (Exemptions) with a direction to grant approval u/s 80G of the Act, on finding the Assessee being eligible in accordance with law, after examining the genuineness Rashtra Tej Manch of the activities and compliance with statutory conditions. For brevity and ready reference, the observations made and the conclusion drawn by the Hon’ble Coordinate Bench of the Tribunal is reproduced herein below:-
“9.We have considered the rival submissions and perused the material available on record. It is an admitted position that the assessee trust commenced its activities on 01.02.2016, whereas the provisional approval under section 80G was granted on 31.08.2021. Thus, the commencement of activities clearly predates both the grant of provisional approval and the introduction of the provisional approval regime itself with effect from 01.04.2021.
The controversy raised before us is no longer res integra. The coordinate Bench of the Tribunal in National Association for the Blind (supra), after considering and following a series of earlier decisions including Kailashmath Trust v. CIT (Exemption) [IT Appeal No.1177/Pun/2023, dated 5.01.2024), has examined the scheme of section 80G(5) in the light of the amendments introduced by the Finance Act, 2020, the Memorandum explaining the provisions, and the Budget Speech of the Hon'ble Finance Minister.
The consistent ratio emerging from these decisions is that the concept of provisional approval was primarily introduced to facilitate newly constituted trusts or institutions which had not yet commenced their charitable activities. The requirement contained in clause (iii) of the proviso to section 80G(5) prescribing filing of an application within six months from commencement of activities is intended to operate only in such cases. For trusts and institutions which were already in existence and carrying on charitable activities prior to the grant of provisional approval, the relevant and operative time limit is the requirement to apply at least six months prior to the expiry of the provisional approval.
The coordinate Benches have further held that interpretation of the phrase "within six months commencement of activities" so as to apply it to longstanding trusts would lead to an absurd and unintended consequence, namely that such trusts would be permanently barred from seeking approval under section 80G, which could never have been the legislative intent. Such an interpretation would render the statutory scheme unworkable and defeat the object of the amendments introduced to simplify and streamline the registration process.
Applying the above settled principles, it has been consistently held that where the assessee trust had commenced its activities much prior Rashtra Tej Manch to the grant of provisional approval and prior to the introduction of the provisional registration regime with effect from 01.04.2021, the second limb of clause (iii) of the proviso to section 80G(5) has no application. In such cases, rejection of the application solely on the ground that it was not filed within six months from commencement of activities is legally unsustainable.
14. Respectfully following the binding coordinate Bench decisions and the judicial principles laid down therein, we hold that the rejection of the assessee's application by the CIT(E) on this ground cannot be upheld.
As regards the alternative limb relating to filing the application six months prior to expiry of provisional approval, it is evident from the record that the CIT(E) has rejected the application only on the ground of delay, without examining the eligibility of the assessee or the genuineness of its activities.
In the present case, the CIT(E) has not recorded any adverse finding regarding the charitable nature of activities or noncompliance with the conditions of section 80G(5). The rejection is founded solely on limitation. In such circumstances, we are of the considered view that the delay deserves to be condoned, and the application ought to be examined on merits.
In view of the above discussion and respectfully following the judicial precedents cited hereinabove, we hold that: i. The rejection of the assessee's application in Form No. 10AB solely on the ground of delay is not sustainable in law. ii. The delay in filing Form No. 10AB is condoned. iii. The impugned order passed by the CIT(E) dated 28.09.2025 is set aside.
The matter is restored to the file of the CIT(E) with a direction to grant approval under section 80G, if the assessee is otherwise found to be eligible in accordance with law, after examining the genuineness of activities and compliance with statutory conditions, after affording due opportunity of being heard to the assessee.
In the result, the appeal is allowed for statistical purposes.
8. Thus, on the aforesaid analyzations, and respectfully following the judgments referred to above, we are inclined to condone the delay in filing an application for registration u/s 80G of the Act.
Rashtra Tej Manch Consequently, the impugned order is set-aside and the case is remanded to the file of the Ld. Commissioner to consider the application filed by the Assessee on merit and decide accordingly.
In the result the Assessee’s Appeal is allowed for statistical purposes.