SEVAGRAMAM CHARITABLE TRUST,HYDERABAD vs. CIT (EXEMPTION), HYDERABAD

Facts

The assessee trust, having been granted provisional registration, filed applications for regular registration under Section 12AB and Section 80G of the Income-tax Act, 1961 (Form 10AB) beyond the prescribed due date, which had been extended by CBDT Circular No. 7/2024 to 30.06.2024. The CIT(Exemptions) rejected both applications citing time-bar, despite issuing notices and receiving documentation from the assessee after the deadline.

Held

The Tribunal found the delay to be inadvertent and procedural, emphasizing that procedural lapses should not defeat substantive rights, especially when the CIT(Exemptions) had not found any defects on the merits of the assessee's charitable activities. Noting the introduction of a proviso to Section 12A(1)(ac) by the Finance Act, 2024, allowing condonation of delay for reasonable cause, and the applicability of Section 119(2)(b) for condonation under Section 80G, the Tribunal set aside the rejection orders. The matters were restored to the file of the CIT(Exemptions) for fresh consideration on merits, with directions to grant the assessee an opportunity to explain the delay.

Key Issues

Whether applications for regular registration under Section 12AB and Section 80G, filed beyond the prescribed time limit, can be rejected solely on procedural grounds without considering the merits or allowing for condonation of delay; and whether the issuance of notices by the CIT(Exemptions) after the filing deadline implies condonation of delay or a bona fide belief that the application was valid.