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Facts
The assessee, an old trust with existing Section 12A and 80G registrations, applied for registration under Section 12A(1)(ac)(iii) by filing Form 10AB following amendments to the Income Tax Act. The CIT (Exemptions) rejected the application and cancelled the provisional certificate due to alleged non-compliance and non-filing of Form 10A. The assessee filed an appeal with the ITAT, which was delayed by 13 days.
Held
The Tribunal condoned the 13-day delay, acknowledging sufficient cause. It noted that the assessee, being an old trust, should have applied under Section 12A(1)(ac)(i) rather than seeking provisional registration. Citing that the rejection was based on non-compliance, the Tribunal set aside the CIT (Exemptions)'s order and remanded the matter back for fresh consideration, providing the assessee another opportunity to present details.
Key Issues
Whether the rejection of Section 12A registration application due to non-compliance and non-filing of Form 10A was justified, and whether an old trust should apply for provisional registration or under a different section. Also, whether the delay in filing the appeal should be condoned.
Sections Cited
12A, 12A(1)(ac)(iii), 12A(1)(ac)(i), 12AA, 11, 12, 80G, 80G(5)
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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI PRADIP KUMAR CHOUBEY & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Exemptions)-Kolkata [hereinafter referred to as the “Ld. CIT (Exemption)”] passed in respect of registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) dated 20.12.2024. 1. 1. The Registry has informed that the appeal filed by the assessee is barred by limitation by 13 days. An affidavit along with an application I.T.A. No.: 528/KOL/2025 Assessment Year: N.A. Sri Maheswari Dharmsala. seeking condonation of delay has been filed by the assessee. The contents of the condonation petition are as under: “Sri Maheswari Dharmasala Trust is in existence since 11th February 1991. Certification u/s 12A order issued on 2nd April 1991 and 80G order issued on 30th July 1992 for the perpetuity. A copy of the Order(s) is attached. Due to the amendment in the Income Tax Act, 1961 pertaining to charitable Trust effective from 1st April 2020, Assessee filed form 10A pertaining to 80G(5) on 31 August 2021. However, Assessee didn't file form 10A pertaining to Sec 12A due to unawareness of the all the changes in law. However, Assessee did file form 10AB both for Sec 80G(5) and Sec 12A. CIT (Exemption) rejected form 10AB pertaining to Sec 12A due to non-filing of Form 10A pertaining to Sec 12A on 20th December 2024. Although Assessee had provided all the documents as and when required except form 10AC (Provisional Approval for Sec 12A) as Assessee didn't file form 10A. After rejection of the form 10AB by CIT(Exemption), the only option left with Assessee was to go for appeal. Unfortunately, there was no one in the Trust conversant with IT laws, and we decided to file appeal against the same. The Trust tried to file appeal before the Ld. CIT(Appeals), however it was informed by the auditor that we require to file appeal before the Income Tax Appellate Tribunal (ITAT) and not before CIT(Appeals). As there was no one capable enough to file appeal before ITAT, the Trust on advice of the Auditor approached Sri Raju Mukherjee CS, to prepare and file appeal before ITAT. He took some time to prepare the draft and finalise the ground, which resulted in a bit delay in filing the appeal. Thus, in the absence of proper guidance from a tax advisor the Assessee failed to adhere to 60 days’ time limit for filing appeal before ITAT against CIT(Exemption)'s order. As a result, there was a delay to file the appeal which was supposed to be filed by 18th February 2025. The Assessee thus request your goodself to be kind enough to condone the delay which was purely unintentional, and for this act of kindness, we shall remain much grateful.”
Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication. I.T.A. No.: 528/KOL/2025 Assessment Year: N.A. Sri Maheswari Dharmsala.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. That the rejection of form 10AB is arbitrary and not justified as Assessee had filed form 10AB for Sec 12A within the extended due date of 30th June 2024 vide circular no. 07/2024 dated 25.04.2024. Mere non-filing of form 10A (to get provisional registration) could not be a basis to reject form 10AB.
That the rejection was on the ground that the trust could not submit certificate in Form 10AC, which is issued only after filing form 10A (to get provisional registration). Non filing of form 10A is a technical error for which the registration u/s 12A should not be denied, and this should not be the basis to decide the genuineness of the trust when all other documents viz audited accounts etc were available with the learned CIT (Exemption).
That the Income tax department has provided form 10AC for the same trust when form 10A was filed afresh, hence non availability of form 10AC should not be the ground for denial of registration u/s 12A, The requirement of filing form 10A was newly inserted and this was required to be filed for 12A and 80G both, and the trust was not aware of the same, and filed the form for 80G only. Prior to this the trust had registration u/s 12AA and 80G which were valid till perpetuity. Rejection of registration for mere non filing of form 10A which is technical in nature will be too harsh for a small trust like us.
That the Trust is in existence since 11th February 1991 and Certification u/s 12A order issued on 2nd April 1991 and 80G order issued on 30th July 1992. A copy of the Order(s) is attached.
That the appellant reserves the right to raise additional grounds during hearing”
Brief facts of the case are that the assessee had filed an application for registration u/s 12A(1)(ac)(iii) of the Act in Form No. 10AB. Accordingly, notice was issued to the assessee calling for certain information. In reply, the assessee submitted various details along with the supporting documents. The Ld. CIT (Exemption) perused the documents filed by the assessee and issued another notice seeking certain clarifications from the assessee. Since no reply from the assessee was received, the Ld. CIT (Exemption) rejected the assessee’s I.T.A. No.: 528/KOL/2025 Assessment Year: N.A. Sri Maheswari Dharmsala. application u/s 12A(1)(ac)(iii) of the Act and further cancelled the provisional certificate issued to the assessee observing as under: “The assessee has failed to submit/furnish submit/furnish its reply on the above mentioned query and accordingly the genuineness of the activities of the trust is not established and therefore is not eligible for registration u/s. 12A(1)(ac) (iii) of the Act. Hence, the application filed by the assessee treated as non-maintainable and assessee's application u/s. 12A(1)(ac)(iii) is hereby rejected. The Provisional Certificate issued to the assessee is hereby cancelled w.e.f. the date of its issue.”
Aggrieved with the cancellation order for the provisional approval and rejection of the grant of approval for registration, the assessee is in appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that though earlier notice was complied with however, subsequent notices could not be complied with and the application was rejected. It was requested that the matter may be remanded back to the Ld. CIT(Exemption) and an opportunity may be given to the assessee to file the details.
We have considered the submission and find that since the assessee was an old Trust, it ought to have applied under 12A(1)(ac)(i) of the Act and there was no need to apply for provisional registration and as per clause (a) of the Proviso below sub-section (2) of section 12A, the provisions of sections 11 and 12 would have applied from the assessment year from which the trust was earlier granted registration. Hence, the Bench was of the view that i we are oh all 02 n the interest of justice and fair play and considering the facts and circumstances of the case that the rejection of application was made on account of non- compliance made by the assessee, another opportunity may be provided to the assessee. Hence, the order of the Ld. CIT (Exemption) cancelling I.T.A. No.: 528/KOL/2025 Assessment Year: N.A. Sri Maheswari Dharmsala. the provisional registration and denying the final registration is hereby set aside and the matter is remanded back to him for deciding the application afresh after granting another opportunity of being heard. The assessee shall not seek unnecessary adjournments and shall file the required details, which shall be considered while deciding the application.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 12th June, 2025. [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 12.06.2025 Bidhan (P.S.) I.T.A. No.: 528/KOL/2025 Assessment Year: N.A. Sri Maheswari Dharmsala. Copy of the order forwarded to:
Sri Maheswari Dharmsala, West Block, 3rd Floor, 1, A.J.C. Bose Road, L.R. Sarani, Kolkata, West Bengal, 700020. 2. CIT (Exemptions), Kolkata.
CIT(A)-
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order