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Facts
The assessee trust applied for regular registration u/sec.80G and u/sec.12AB of the Income Tax Act, 1961, in Form 10AB. The application was rejected by the CIT(E) for being filed beyond the prescribed due date, despite the assessee claiming the delay was unintentional and due to ambiguity in law and professional assistance issues.
Held
The Tribunal held that the CIT(E) rejected the application in a routine manner without considering the explanation for delay and on merits. The Tribunal set aside the order of the CIT(E) and directed to consider the application for condonation of delay and the application on merits.
Key Issues
Whether the CIT(E) was justified in rejecting the application for registration solely on the ground of delay in filing, without considering the explanation and merits, especially considering recent amendments and circulars.
Sections Cited
80G, 12AB, 147, 148, 143(3), 139(1), 12A(1)(ac)(ii), 80G(5)(iv), 12A(iv)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
ORDER PER MANJUNATHA G. : The above two appeals are filed by the Assessee Trust against the orders both dated 17.03.2025 of the learned Commissioner of Income Tax (Exemptions), Hyderabad, in rejecting the application filed by the assessee trust in Form 10AB for regular registration u/sec.80G of the Income Tax Act, 1961 and registration u/sec.12AB of the Income Tax Act, 1961 [in short “the Act”], relating to the assessment year 2025- 2026. Since common issues are involved in both these appeals, these appeals were heard together and are being
2 ITA.Nos.707 and 708/Hyd./2025 disposed of by this single consolidated order for the sake of convenience and brevity.
Briefly stated facts of the case are that, the assessee viz., “Maharanyam Muralidhara Swamiji Vedha Ashram” is a public charitable trust established on 12.04.2022. The assessee is carrying charitable activities of providing education in Vedhas and Yoga to aspiring students, organise free food distribution [Annadanam] to students. The appellant-trust was granted provisional approval by CPC u/sec.80G(5)(iv) of the Income Tax Act, 1961 on 19.01.2023 up-to assessment year 2025-2026. The appellant-trust has filed it’s returns of income for the assessment year 2023-2024 and 2024-2025 on 16.10.2023 and 20.09.2024, respectively, within the due date provided u/sec.139(1) of the Act along with Auditors Report in Form 10BB. Thus, the appellant-trust has duly filed it’s return of income and Auditor’s Report from the first year of operation within the due date. The appellant-trust has filed an application in Form 10AB submitting all documents on 19.09.2024 for permanent approval u/sec.80G of the Act, which is 6 months prior to the expiry of period of provisional approval and that, the provisional approval is valid in the case of appellant-trust is till
3 ITA.Nos.707 and 708/Hyd./2025 31.03.2026. The appellant-trust submitted that, the application for permanent approval was submitted on 19.09.2024 duly enclosing all documents i.e., before 30.09.2024 which is also within the stipulated six months before the expiry of the period of provisional approval which is dated till 31.03.2026. However, the learned CIT(E) rejected the application filed by the assessee in Form 10AB for regular registration u/sec.80G of the Act by observing that, as per the Finance Act, 2020, the assessee should have applied Form 10AB for regular registration u/sec.80G, 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 noted that, the CBDT vide Circular No.7 of 2024, dated 25.04.2024 has extended the time limit for filing of Form 10A/10AB till 30.06.2024. Since the assessee has applied Form 10AB for regular registration u/sec.80G on 19.09.2024 i.e., beyond the time limit prescribed for filing of Form 10AB, the learned CIT(E) rejected the application for regular registration u/sec.80G of the Income Tax Act, 1961, for the assessment year 2025-2026. The learned CIT(E) has made identical observations while rejecting the application filed by the appellant-trust in 4 ITA.Nos.707 and 708/Hyd./2025 Form 10AB for registration u/sec.12AB of the Income Tax Act, 1961.
Aggrieved by the orders of the learned CIT(E), the assessee now, preferred the present appeals before the Tribunal.
CA, K Satyanarayana, Learned Counsel for the Assessee submitted that, the learned CIT(E) rejected the application filed by the appellant-trust in Form 10AB seeking for registration u/sec.80G 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 07.02.2025 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 5 ITA.Nos.707 and 708/Hyd./2025 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 to the learned CIT(E) to give one more opportunity of hearing to the assessee to explain it’s case.
Sri B. Balan Krishna, 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 and 80G 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 Registration u/sec.12AB and 80G of the Income Tax Act, 1961 and thus, the orders of the learned CIT(E) should be upheld.
6 ITA.Nos.707 and 708/Hyd./2025 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 was established on 12.04.2022 with the main objects of providing education in Vedas and Yoga to aspiring students and organise free food distribution [Annadanam] to students etc. The appellant-trust has been granted provisional registration from 19.02.2023 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 years 2023-2024 and 2024- 2025 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 and 80G 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
7 ITA.Nos.707 and 708/Hyd./2025 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 19.09.2024 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, which is difficult to understand by any layman. Therefore, in our considered view,
8 ITA.Nos.707 and 708/Hyd./2025 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 registration u/sec.12AB and u/sec.80G 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 9 ITA.Nos.707 and 708/Hyd./2025 appellant-trust on merits, after considering relevant details submitted by the appellant-trust to justify it’s case.
In the result, appeals filed by the assessee are allowed for statistical purposes. A copy of this common order be placed in the respective case files.
Order pronounced in the open Court on 16.07.2025.