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Facts
The assessee, a charitable trust, was granted provisional registration and applied for regular registration under Section 12AB of the Income Tax Act, 1961. The CIT(E) rejected the application, citing that it was filed beyond the prescribed time limit. The assessee contended that the delay was due to genuine hardship, ambiguity in law, and lack of professional assistance, despite filing the application before the expiry of provisional registration.
Held
The Tribunal observed that the law regarding trust registration has undergone amendments causing confusion and that the CIT(E) rejected the application routinely without considering the assessee's explanation for delay or the merits of the case. The Tribunal set aside the CIT(E)'s order and remanded the matter back for fresh consideration, directing the CIT(E) to evaluate the application for condonation of delay and the merits of the regular registration application.
Key Issues
Whether the CIT(E) was justified in rejecting the assessee's application for regular registration under Section 12AB solely due to delay in filing, without considering the reasons for delay or the merits of the application.
Sections Cited
12AB, 12A, 139(1)
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Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.977/Hyd./2025 Assessment Year 2025-2026 Viswa Veda Parayan Brindam, Hyderabad The Commissioner of PIN – 500 048. vs. Income Tax (Exemptions), State of Telangana. Hyderabad. PAN AAGAV0498J (Appellant) (Respondent) For Assessee : CA, K. Surya Bhagwan For Revenue : MS. U. Mini Chandran, CIT-DR Date of Hearing : 19.08.2025 Date of Pronouncement : 22.08.2025 ORDER PER MANJUNATHA G. :
The above appeal has been filed by the assessee trust against the Order dated 13.03.2025 of the learned Commissioner of Income Tax (Exemptions), Hyderabad, rejecting the application filed by the assessee trust in Form- 10AB seeking for regular registration u/sec.12AB of the Income Tax Act, 1961 [in short "the Act"], relating to the assessment year 2025-2026.
2 ITA.No.977/Hyd./2025 2. Briefly stated facts of the case are that, the assessee is a Charitable Trust and was granted provisional registration by the CPC vide order dated 15.09.2022 valid from assessment year 2023-2024 to assessment year 2025- 2026. The assessee has filed an e-application in Form No.10AB seeking for regular registration u/sec.12AB of the Income Tax Act, 1961. The learned CIT(E) has issued notices dated 03.12.2024 and 10.02.2025 calling for relevant documents i.e., Memorandum of Association/Trust Deed for verification and to furnish detailed reply on the specific information called for in the said notice. In response, the assessee trust has submitted it’s reply. The learned CIT(E) after considering the relevant submissions of the assessee, rejected the application filed by the assessee trust in Form-10AB seeking for regular registration u/sec.12AB of the Income Tax Act, 1961, on the ground that, the assessee trust has applied Form-10AB for regular registration u/sec.12AB on 28.09.2024 i.e., beyond the time limit prescribed for filing of Form-10AB, which is in violation as per the Finance Act, 2020, as per which, the assessee 3 ITA.No.977/Hyd./2025 should have applied Form-10AB for regular registration u/sec.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. The learned CIT(E) further observed that, 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/sec.12AB on 28.09.2024 i.e., beyond the time limit prescribed for filing of Form 10AB. Accordingly, the learned CIT(E) rejected the application filed by the assessee trust in Form 10AB seeking for regular registration u/sec.12AB of the Income Tax Act, 1961.
Aggrieved by the order of the learned CIT(E), the assessee trust is now, in appeal before the Tribunal.
CA, K. Surya Bhagwan, Learned Counsel for the Assessee submitted that, the learned CIT(E) has rejected the application filed by the appellant-trust in Form 10AB seeking for regular registration u/sec.12AB of the Income Tax Act, 1961, without considering the relevant 4 ITA.No.977/Hyd./2025 submissions made by the assessee only on the ground that, delay in filing of the application, although, the assessee has explained the reasons for delay in filing the said application. Learned Counsel for the Assessee further referring to various evidences including show cause notice issued by the learned CIT(E) on 03.12.2024 and 10.02.2025 submitted that, the assessee has furnished all the details as called for by the learned CIT(E). However, he has not considered any of the submissions of the assessee while rejecting the application filed by the assessee in Form 10AB. Further, the assessee has also explained reasons for delay in filing the application due to ambiguity in law and also there is no proper assistance from any professional on the issue. However, the said delay is unintentional and because of genuine hardship. Although, the assessee has explained the reasons, the learned CIT(E) has dismissed the application, without giving any reasons. Therefore, he submitted that, the matter may be remanded back to the file of learned CIT(E) to give one more opportunity of hearing to the assessee to explain it’s case.
5 ITA.No.977/Hyd./2025 5. MS. U Mini Chandran, learned CIT-DR for the Revenue, on the other hand, supporting the order of the learned CIT(E) submitted that, there is no dispute with regard to the fact that, application filed by the assessee is beyond the prescribed date for filing application for permanent registration of trust u/sec.12AB of the Income Tax Act, 1961. Further, the law has been amended w.e.f. 01.10.2024 by insertion of proviso to 12A(iv) of the Income Tax Act, 1961, where, the appellant can file an application with reasons for condonation of delay in filing of application. Since the assessee neither explained the case with relevant details nor filed any petition for condonation of delay, the learned CIT(E) has rightly rejected the application filed by the assessee in Form 10AB seeking for regular Registration u/sec.12AB of the Income Tax Act, 1961 and thus, the orders of the learned CIT(E) should be upheld.
5.1. Learned CIT-DR further, in the alternative submitted that, the matter may be remanded to the file of learned CIT(E) to give another opportunity of hearing to the 6 ITA.No.977/Hyd./2025 assessee to verify the facts and consider the issue in accordance with law.
We have heard both the parties, perused the material on record and the orders of the authorities below. The appellant-trust is a Charitable Trust engaged in the activities of Viswa Veda Parayana Brindam and was established on 15.09.2022. The appellant-trust has been granted provisional registration from 15.09.2022 valid from assessment year 2023-2024 to up-to assessment year 2025- 2026. The appellant-trust claims to have started it’s activities and also filed relevant return of income for the assessment year 2023-2024 onwards on or before the due date provided u/sec.139(1) of the Income Tax Act, 1961. As per the provisions of sec.12A(1)(ac)(ii) of the Income Tax Act, 1961, the appellant is supposed to file application in Form 10AB seeking for permanent registration u/sec.12AB of the Act, atleast six months before the expiry of the provisional registration or within six months from the date of commencement of the activities, whichever is earlier. The CBDT has extended the said due date considering the 7 ITA.No.977/Hyd./2025 hardship faced by various Trusts/Institutions vide Circular No.7 of 2024 dated 25.04.2024 up-to 30.06.2024. In the present case, the assessee has filed application in Form 10AB on 28.09.2024 which is beyond the due date provided under the Act i.e., within six months from the date of commencement of the activities. However, the application filed by the assessee is atleast six months before the expiry of the provisional registration. The assessee claimed to have explained the reasons for delay in filing of application and as per the submission of the assessee, there is genuine hardship due to ambiguity in law and also improper assistance from the professionals, but, the delay in filing of the application is unintentional and for want of any benefit.
We find that, the law has been amended in the case of trusts for procedure of registration and the same has been amended from time to time which is caused confusion in the minds of the public about the classification of Trust/ Institution. Although, the CBDT has issued Circulars from time to time and explained the procedure to be followed for obtaining registration, but, there is an ambiguity in law, 8 ITA.No.977/Hyd./2025 which is difficult to understand by any layman. Therefore, in our considered view, when the assessee has filed it’s application for permanent registration atleast before six months from the expiry of provisional registration, the learned CIT(E) ought to have consider the application filed by the assessee on merits, when the assessee claims to have filed relevant evidences to prove carrying-out charitable activities in accordance with it’s objects. Further, the assessee claims to have filed a petition for condonation of delay in terms of amended provisions which is applicable from 01.10.2024. Therefore, considering the facts and circumstances of the case and also the fact that, the learned CIT(E) has rejected the application filed by the assessee in a routine manner without even considering the explanation for delay in filing of the application and also on merits, in our considered view, the issue needs to be set-aside to the file of learned CIT(E) to give another opportunity of hearing to the appellant-trust. Thus, we set-aside the order passed by the learned CIT(E) in rejecting the application filed in Form 10AB seeking for regular registration u/sec.12AB of 9 ITA.No.977/Hyd./2025 the Income Tax Act, 1961 and restore the issues back to the file of learned CIT(E) for fresh consideration. The learned CIT(E) is directed to consider the application filed by the appellant-trust for condonation of delay and also the application filed by the appellant-trust on merits, after considering relevant details submitted by the appellant- trust to justify it’s case.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 22.08.2025.