CHEYUTHA FOR WELLBEING FOUNDATION,RANGA REDDY vs. CIT (EXEMPTION), HYDERABAD

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ITA 1227/HYD/2025Status: DisposedITAT Hyderabad31 October 2025AY 2024-256 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that the assessee's application in Form 10AB for regular registration under Section 80G was filed on 20/12/2024, which was beyond the extended due date of 30.06.2024 as per CBDT Circular No. 7/2024. While the delay was procedural, the Tribunal noted that procedural lapses should not defeat substantive rights, especially for charitable trusts. Although there is no explicit provision in the Act or rules for condoning the delay in filing Form 10AB for Section 80G registration, the assessee was granted liberty to approach the CBDT for condonation under Section 119(2)(b) of the Act. Following such condonation by the CBDT, the CIT(Exemptions) was directed to consider and dispose of the assessee's application for regular registration under Section 80G on merits, after providing the assessee with due opportunity of being heard. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Cheyutha for Wellbeing Foundation, filed an appeal against the order of the Commissioner of Income Tax (Exemptions) [CIT(Exemptions)], Hyderabad, dated 17.06.2025. The CIT(Exemptions) rejected the assessee's application in Form No. 10AB for regular registration under Section 80G(5) of the Income-tax Act, 1961. The assessee had previously been granted provisional registration under Section 80G by the CPC on 24/10/2022, valid from AY 2023-24 to AY 2025-26. The CIT(Exemptions) rejected the application for regular registration because it was filed on 20/12/2024, which was beyond the extended due date of 30.06.2024 stipulated by CBDT Circular No. 7/2024 for filing Form No. 10AB. The assessee argued that the delay was justifiable and should have been condoned, especially since a similar delay was condoned for its Section 12AB application.

What were the issues?

1. Whether the CIT(Exemptions) erred in law and facts by arbitrarily rejecting the assessee's application for registration under Section 80G of the Act, contrary to the principles of natural justice, without issuing a notice for explanation of the delay in filing Form 10AB. 2. Whether the CIT(Exemptions) erred in rejecting the Section 80G application while accepting the Section 12A application based on the same reason for delay, thereby condoning the delay for one but not the other. 3. Whether the CIT(Exemptions) failed to provide an adequate opportunity to the assessee to present its case for the 80G application separately from the 12AB application, violating natural justice. 4. Whether the rejection of the 80G application was based on a technicality rather than a substantive deficiency, and if the assessee complied with all substantive requirements for approval. Assessee's contentions: The Ld. AR argued that the CIT(Exemptions) arbitrarily declined to condone the delay for the 80G application despite accepting the same explanation for the 12AB application. The delay was not inordinate and had justifiable reasons, thus it should be condoned and the matter considered on merits. The assessee also contended that having been granted registration under Section 12AB(1)(b), it is entitled to registration under Section 80G. Revenue's contentions: The Ld. CIT-DR supported the order of the CIT(Exemptions), submitting that the time limit for filing an application under Section 80G is mandatory and the CIT(Exemptions) has no discretion to condone the delay in filing Form 10AB.

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5),Section 12A,Section 12AB,Section 12AB(1)(b),Section 119(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad A Bench, Hyderabad

PER RAVISH SOOD, JM: The present appeal filed by the assessee trust is directed against the order passed by the Commissioner of Income Tax (Exemptions) [hereinafter referred to as “CIT(Exemptions)"], Hyderabad, dated 17.06.2025 rejecting its application filed in “Form No. 10AB” for regular registration under Section 80G(5) of the Income-tax Act, 1961 (for short, “the Act”). The assessee trust has assailed the impugned order on the following grounds of appeal before us:

“1. BECAUSE, the Ld. 'CIT' has erred in law as well as in the facts and circumstances of the case in arbitrarily rejecting the application filed by the 'appellant' seeking registration under section 80G of the 'Act'.

2.

BECAUSE, the Ld. 'CIT' has erred in rejecting the application under Section 80G without issuing any notice requiring to offer explanation of delay in filing Form 10AB. Thus, the order is passed without giving opportunity in violation of the principles of natural justice.

3.

BECAUSE, the Ld. 'CIT' erred in rejecting the application under Section 80G, while accepting the application under section 12A, accepting the reason given by the appellant for delayed filling the application and thereby condoning the delay ignoring that similar reason prevented the appellant from presenting application under Section 80G within the stipulated time.

4.

BECAUSE, the Ld. 'CIT' failed to provide the Appellant with an adequate opportunity to present its case regarding 80G application separately from the 12AB application. The rejection without such an opportunity is a violation of the principles of natural justice.

5.

BECAUSE, the Ld. 'CIT' had incorrectly rejected the application for 80G of the 'Act'. The Appellant has complied with all the substantive requirements for approval under Section 80G and that the rejection is based on a technical short coming which to is condonable rather than a substantive deficiency.

6.

BECAUSE, appellant having been granted registration under section 12AB(1)(b) of the Act is entitled for registration/approval under section 80G of the 'Act'. The 'appellant' craves leave to add, alter OR vary the grounds of appeal before OR at the time of hearing.

2.

Succinctly stated, the assessee trust was granted provisional registration under Section 80G of the Act by the Central Processing Centre (CPC) in “Form No. 10AC” dated 24/10/2022, valid for the period from AY 2023-24 to AY 2025–26. 3. The assessee trust had thereafter filed an application for regular registration under Section 80G of the Act in Form No. 10AB. During the course of the proceedings, the assessee trust had in response to notices issued by the CIT(Exemptions), dated 27/03/2025 and 19.05.2025, vide its replies submitted the requisite details/information in response to the queries that were raised by him.

4.

However, the CIT(Exemptions) rejected the aforesaid application vide his order dated 17.06.2025, on the ground that the assessee trust had failed to apply for regular registration within the prescribed time limit. It was observed by him that as per the amended provisions introduced by the Finance Act, 2020, an application in “Form No. 10AB” should be filed at least six months prior to the expiry of the provisional registration or within six months from the commencement of its activities, whichever is earlier.

5.

The CIT(Exemptions) further observed that the CBDT vide Circular No. 7/2024 dated 25.04.2024 had extended the “due date” for filing Form No. 10A/10AB till 30.06.2024. It was observed by him, that as the assessee trust had filed its application in “Form 10AB” on 20/12/2024, therefore, it was time- barred. Accordingly, the CIT(Exemptions) rejected the application filed by the assessee trust for regular registration under Section 80G of the Act on the ground of the delay involved in filing the same.

6.

Aggrieved, the assessee trust has carried the matter in appeal before us.

7.

Sri Anurag Sinha, Advocate, Ld. Authorised Representative (for short, "AR") for the assessee trust at the threshold of hearing, submitted that the application filed by the assessee trust for regular registration under Section 80G has been rejected by the CIT (Exemption), Hyderabad for the reason that the same was filed beyond the prescribed time period. The Ld. AR submitted that though the CIT(Exemption) had accepted the explanation of the assessee trust regarding the delay in filing the application for regular registration under Section 12AB of the Act and granted the said registration, but he had most arbitrarily declined to condone the delay based on the same explanation insofar the application for regular registration under Section 80G(5) of the Act is concerned. The Ld. AR further submitted that as the delay in filing the application for regular registration was not inordinate and had crept in for justifiable reasons, therefore, the same in all fairness be condoned and the matter be restored to the file of the CIT(Exemption) for considering the same on merits.

8.

Ms. U. Mini Chandran, Ld. CIT-DR supported the order of the CIT(Exemptions), and submitted that the time limit for filing an application for registration under section 80G of the Act, as prescribed under the law is mandatory in nature, and the CIT(Exemptions) has no discretion to condone the delay in filing of “Form 10AB”.

9.

We have heard the Ld. Authorized Representatives of both parties and perused the material available on record.

10.

Admittedly, the assessee trust that was granted provisional registration under Section 80G of the Act had filed “Form 10AB” for regular registration on 20/12/2024. As observed by us hereinabove, the CBDT, vide Circular No. 7/2024 dated 25.04.2024, had extended the “due date” for filing such application till 30.06.2024, therefore, there can be no denying the fact that the application filed by the assessee trust was beyond the prescribed time limit.

11.

Although the delay in filing the application for regular registration under Section 80G in “Form 10AB” is procedural in nature, but we are afraid that the provisions of the Act read along with the CBDT Circular No. 7/2024 (supra) are clear on the prescribed time limit in so far the filing of an application for regular registration in “Form 10AB” under Section 80G of the Act is concerned. However, we are at the same time of a firm conviction that procedural lapses should not be allowed to defeat the substantive rights, particularly in matters of charitable trusts seeking exemptions. Although there is no explicit provision under the Income-tax Act or rules for condonation of the delay in filing of “Form 10AB” for regular registration under Section 80G of the Act, but the assessee trust remains at liberty to approach the CBDT for condonation under Section 119(2)(b) of the Act. Thereafter, the CIT(Exemptions) is directed to take up and dispose of the application filed by the assessee trust for regular registration under Section 80G of the Act, on merits, in accordance with the extant law and after providing due opportunity of being heard to the assessee trust.

12.

Resultantly, the appeal of the assessee trust is allowed for statistical purposes in terms of our aforesaid observations.

Order pronounced in the Open Court on 31ST October, 2025. (मधुसूदन सावडिया) (MADHUSUDAN SAWDIA) लेखासदस्य/ACCOUNTANT MEMBER (रवीश सूद) (RAVISH SOOD) न्यायिकसदस्य/JUDICIAL MEMBER

Hyderabad, dated 31.10.2025. OKK/sps

आदेशकीप्रतिलिपिअग्रेषित/

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