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Facts
The assessee, a Charitable Trust, filed an application for registration under Section 12AB which was rejected by the CIT (Exemption) due to being beyond the prescribed time limit. The assessee filed an appeal against this rejection with a delay of 45 days, seeking condonation of the delay.
Held
The Tribunal condoned the delay of 45 days in filing the appeal, finding that the assessee had a reasonable cause. It then set aside the CIT (Exemption)'s order, remanding the matter back for reconsideration of the Section 12AB registration application, instructing to consider all relevant facts and provide an opportunity of hearing.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the application for registration under Section 12AB was wrongly rejected by the CIT (Exemption) due to time limits.
Sections Cited
12AB
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Income Tax Appellate Tribunal, Hyderabad ‘ DB-B ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
Per Vijay Pal Rao, Vice President
This appeal by the assessee is directed against the order dated 13/03/2025 of the learned CIT (Exemption) whereby the application of the assessee for registration u/s 12AB was rejected.
There is a delay of 45 days in filing the present appeal. The assessee has filed an application for condonation of delay along with an affidavit of the assessee. The learned Counsel for Page 1 of 5 the assessee has submitted that the assessee is a Charitable Trust and filed the application for regular registration in Form 10AB on 28/09/2024 which was rejected by the learned CIT (Exemption) on the ground that the application was beyond the time limit, being not within 6 months from the date of commencement of the activities of the assessee. He has pointed out that after receiving the order, the assessee consulted the Tax Advisor for the future course of action against the said order and it took some time which caused the delay of 45 days in filing the present appeal before the Tribunal. Thus, the learned Counsel for the assessee has submitted that the delay in filing the appeal is neither intentional nor deliberate but due to the reason that the assessee was consulting with the Tax Advisor as to what is the efficacious remedy and course of action in such a situation whereby the application of the assessee was dismissed as barred by limitation. Thus, he has pleaded that the delay of 45 days in filing the appeal be condoned and the appeal of the assessee be admitted for adjudication.
On the other hand, the learned DR has submitted that the assessee has not explained any reasonable cause for the delay in filing the appeal.
We have considered the rival contentions as well as the relevant material available on record. The assessee in the affidavit has explained the cause of the delay that after receiving the Page 2 of 5 impugned order, the assessee was consulting with the Tax Consultant/Advisor to decide the future course of action and in this process, a considerable time has lapsed which has causes the delay in filing the present appeal. Having regard to the facts and circumstances of the case when the learned CIT (Exemption) has dismissed the application of the assessee by referring a CBDT Circular No.07/2024, this is not at all relevant for the application filed by the assessee for regular registration u/s 12AB of the Act for the A.Ys 2023-24 to 2025-26 and further, the assessee has given a fair account of the circumstances which has caused the delay in filing the appeal, we are satisfied that the assessee was having a reasonable cause for the delay in filing the appeal. Accordingly, the delay of 45 days in filing the appeal is condoned.
The assessee has filed the following grounds of appeal:
We have heard the learned AR and the learned DR and considered the relevant material available on record. The learned CIT (Exemption) has rejected the application of the assessee by giving the reason in para 3 and 4 as under: “3. In response to the above notice, the assessee submitted his reply. On perusal of the submissions made by the assessee, it is observed that the CPC has issued provisional registration in form 10AC dated 21.12.2022 valid from AY 2023-24 to AY 2025-26. As per the finance Act, 2020, the assessee should have applied form 10AB for regular registration u/s 12AB, at least six months before the expiry of provisional registration or within six months from the date of commencement of activities, whichever is earlier. Further, the CBDT vide circular No. 7 of 2024 dated 25.04.2024 extended the time limit for filing of form 10A/10AB till 30.06.2024. However, the assessee has applied form 10AB for regular registration u/s 12AB on 28.09.2024, i.e. beyond the time limit prescribed for filing of form 10AB. 4. Keeping in view of the above, as the assessee has made the application in form 10AB beyond the time limit prescribed, the present application in form 10AB for registration u/s 12AB is herewith rejected.”
Thus, the learned CIT (Exemption) has considered the application of the assessee as beyond the time limit in the context of 6 months from the date of commencement of the activities and also referred to the CBDT Circular No.7/2024 dated 15/04/2024 whereas the said circular is not relevant for the application for registration from A.Ys 2023-24 to 2025-26. Further, in a case where the assessee Trust is already in existence and started its activities prior to granting provisional registration, then the limitation cannot be taken as reckoning from the date of commencement of the activity. The learned CIT (Exemption) has not given the details as how the date of commencement of the Page 4 of 5 activity is relevant for counting the limitation in the case of the assessee. Accordingly, in the facts and circumstances of the case, we set aside the impugned order of the learned CIT (Exemption) and remand the matter to the record of the CIT (Exemption) for reconsideration of the application of the assessee for registration u/s 12AB of the Act after considering the relevant facts and record regarding the activities carried out by the assessee. Needless to say, the assessee shall be given an appropriate opportunity of hearing before passing the fresh order.
In the result, appeal filed by the assessee is allowed for statistical purposes.