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Facts
The assessee, a public charitable trust, applied for regular registration under Section 12AB of the Income Tax Act after its provisional registration expired. The application was rejected by the Commissioner of Income Tax (Exemptions) on the grounds of being filed beyond the prescribed time limit. The assessee contended that the delay was unintentional, due to ambiguity in law and lack of professional assistance, and that the application was filed before the expiry of provisional registration.
Held
The Tribunal observed that the CIT(E) rejected the application routinely without considering the assessee's explanations for the delay or the merits of the case. Acknowledging the confusion caused by frequent amendments to registration procedures and the assessee's claim of filing before provisional registration expiry, the Tribunal set aside the CIT(E)'s order. The matter was remanded for fresh consideration, directing the CIT(E) to evaluate both the condonation of delay and the merits of the application.
Key Issues
Whether the application for regular registration under Section 12AB was rightly rejected by the CIT(E) for being time-barred, and if the CIT(E) erred in not considering the assessee's reasons for delay and the merits of the application.
Sections Cited
12AB, 12A(1)(ac)(ii), 80G(5)(iv), 139(1), 12A(iv)
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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.793/Hyd./2025 Assessment Year 2024-2025 NAMPALLI TEMPLE The Income Tax Officer, TRUST, SANGA REDDY, Ward-11(1), vs. Medak District. PIN -5020285 HYDERABAD – 500 081. PAN AABTN2507J (Appellant) (Respondent) For Assessee : CA, Rajsekhar For Revenue : MS. U Mini Chandran, CIT-DR Date of Hearing : 24.07.2025 Date of Pronouncement : 31.07.2025 ORDER PER MANJUNATHA, G.
This appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Exemptions), Hyderabad, in rejecting the application filed by the assessee in Form-10AB seeking for regular registration u/sec.12AB of the Income Tax Act, 1961, relating to the assessment year 2024-2025.
2 ITA.No.793/Hyd./2025 2. Briefly stated facts of the case are that, the assessee is a Public Charitable Trust was established on 23.09.2009 and engaged in maintenance of Saraswati Devi Temple with Corpus Fund which was inaugurated on 24.06.2010 by general public and devotees. The Trust is occasionally conducts medical camps for general public as a measure of charity work sponsored by Medical Colleges or private persons. The assessee trust is filing return of income regularly from the assessment year 2010-2011. The assessee trust was provisionally granted registration vide order dated 21.09.2021 and the registration is valid up-to the assessment year 2024-2025. The assessee trust had filed application in Form 10AB for renewal of registration on 28.09.2024 and the Department vide notices dated 03.12.2024 and 12.02.2025 has called for information from the assessee trust. In response, the assessee trust vide letters dated 30.12.2024 and 07.02.2025 has furnished all the information and documents as called for by the Department. However, the application of the assessee trust filed in Form 10AB seeking for regular registration 3 ITA.No.793/Hyd./2025 u/sec.12AB of the Income Tax Act, 1961 was rejected by the learned CIT(E) on the ground that, the assessee trust has made application in Form 10AB beyond the time limit prescribed.
Aggrieved by the order of the learned CIT(E), the assessee- trust is now, in appeal before the Tribunal.
CA, Rajsekhar, 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 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 12.02.2025 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 4 ITA.No.793/Hyd./2025 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.
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 5 ITA.No.793/Hyd./2025 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 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 Public Charitable Trust engaged in maintenance of Saraswati Devi Temple with Corpus Fund and was established on 23.09.2009. The assessee trust also conducts occasionally free medical camps for general public as a measure of charity work sponsored by medical colleges and private persons. The appellant-trust has been granted provisional registration from 21.09.2021 up-to assessment year 2024-2025. The appellant-trust claims to have started it’s activities and also filed relevant return of income for the 6 ITA.No.793/Hyd./2025 assessment year 2010-2011 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) and 80G(5)(iv) 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 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 29.09.2024 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 7 ITA.No.793/Hyd./2025 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, 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 8 ITA.No.793/Hyd./2025 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 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.
9 ITA.No.793/Hyd./2025 Order pronounced in the open Court on 31.07.2025.