BANDI RAMESH SEVA SAMASTHA,HYDERABAD vs. CIT (EXEMPTIONS), HYDERABAD

“ 1. The Rejection order dated 17-03-2025 in Form 10AD of the Income- tax Act, 1961 is erroneous and contrary to law and facts of the case and devoid of any merit.

The CIT(E), Hyderabad failed to note that the amendments in Finance Act 2020 were introduced to simplify the procedure of registration of charitable trusts/Institutions and the amendments cannot be interpreted in a way that is prejudicial to the Trust/Institutions.

The CIT(E), Hyderabad failed to consider the submission made regarding the objectives of the trust and instead focused only on technical aspects, the CIT (E), Hyderabad should have looked at the entire situation. The Supreme Court has ruled that when there is a choice between doing what is fair and just versus strictly following technical rules, the court should prioritize fairness. The court made it clear that no one should benefit from an unfair situation due to a delay that wasn't intentional.

The CIT(E), Hyderabad failed to note that there is no specific violation by the appellant and complied with all other requirements/conditions for obtaining registration under section 80G of the Act.

The brief facts of the case are that the assessee, is a charitable trust registered with the Registrar of Trusts on 30.01.2023 with objectives including relief of the poor, education, and medical relief. The assessee obtained provisional registration under section 12A(1)(ac)(vi) of the Income Tax Act, 1961 (“the Act”), by filing Form no.10A on 13.02.2023, which was approved via Form no.10AC on 28.02.2023, granting provisional registration from A.Y. 2023–24 to A.Y. 2025–26. Subsequently, the assessee filed an application for final registration under section 12A(1)(ac)(iii) of the Act in Form no.10AB on 29.09.2024, which was beyond the statutory time limit of 6 months from commencement of activities (which began on 30.01.2023) — i.e., the due date being 29.07.2023. The Ld. CIT(E) rejected the Form no.10AB application vide order dated 13.03.2025, holding that the application was filed beyond the extended time limit (which was till 30.06.2024, as per CBDT Circular No. 7/2024 dated 25.04.2024), and hence not maintainable.

We have heard the rival submissions and also gone through the record in the light of the submissions made on either side. It is an admitted position that the assessee commenced its activities on 30.01.2023, and accordingly, under clause (iii) of section 12A(1)(ac) of the Act, the assessee was required to file Form no.10AB for final registration within six months from the date of commencement of activities, i.e. on or before 29.07.2023. Although the CBDT, vide Circular No. 7/2024 dated 25.04.2024, extended the time for filing Form nos. 10A/10AB to 30.06.2024, the assessee filed the form only on 29.09.2024, i.e., with a delay of approximately 3 months. However, the explanation provided by the assessee that the delay was due to a bona fide misinterpretation of the law, where it understood the due date as “six months prior to the expiry of the provisional registration” instead of “six months from the commencement of activities” appears to be plausible in view of the complexity introduced by multiple limbs of clause (ac) to section 12A(1) of the Act. As submitted by the Ld. AR that the CIT (E) rejected the application without granting any opportunity of personal hearing, which is contrary to principles of natural justice. Accordingly, we are of the considered view that the matter deserves to be restored to the file of CIT (E) with a direction to examine the application afresh, taking into account the reasons for delay and giving the assessee an effective opportunity of being heard, both on facts and law.

In the result, the appeal of the assessee is allowed for statistical purposes.

The issues involved in this appeal is identical to the issues involved in the appeals in , wherein we have allowed the appeal of the assessee for statistical purposes. Therefore, our discussion and findings in are mutatis mutandis applicable to this appeal also. As the appeal of the assessee in has been allowed, this appeal is also allowed for statistical purposes.

In the result, both the appeals filed by the assessee are allowed for statistical purposes.