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Facts
The assessee, Tewhima Permaculture Foundation, filed an e-application in Form 10AB for regular registration under Section 12AB of the Income Tax Act. The Ld. CIT(E) rejected the application, stating it was filed on 26.09.2024, which was beyond the prescribed time limit, even considering a CBDT extension till 30.06.2024.
Held
The Tribunal found that the Ld. CIT(E) rejected the application without providing a proper opportunity of hearing to the assessee. It was noted that the application was filed before six months from the expiry of provisional registration. The Tribunal set aside the order of the Ld. CIT(E) and remanded the matter back for reconsideration after providing another opportunity of hearing to the assessee.
Key Issues
Whether the rejection of the assessee's application for regular registration under Section 12AB due to belated filing, without providing an adequate opportunity of hearing, was justified.
Sections Cited
12AB, 12(1)(ac)(iii)
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Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: Shri Manjunatha G. & Shri Ravish Sood
(Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri P.Vinod, AR रधजस् व द्वधरध/Revenue by: Shri Gurupreet Singh,DR सुिवधई की तधरीख/Date of Hearing: 26/06/2025 घोर्णध की तधरीख/Date of 30/06/2025 Pronouncement: आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 12.03.2025 of the learned Commissioner of Income Tax (Exemptions) [Ld.CIT(E)] - Hyderabad, pertaining to A.Y.2024- 25.
The appellant, Tewhima Permaculture Foundation had filed an e-application in Form 10AB, seeking registration u/s 12AB of Income Tax Act, 1961 (“the Act”). During the proceedings u/s 12(1)(ac)(iii) of the Act, the Ld.CIT(E) issued notices dated 03.12.2024 and 10.02.2025 to the assessee to file relevant evidences in support of application filed in Form 10AB. In response, the assessee had filed relevant details as called for by the Ld.CIT(E). From the submissions made by the assessee, the Ld.CIT(E) observed that the CPC had issued provisional registration in Form 10AC dated 21.10.2022 valid from A.Y.2023- 24 to A.Y.2025-26. As per the Finance Act, 2020, the assessee should have applied Form 10AB for regular registration u/s 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 Ld.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 had applied Form 10AB for regular registration u/s 12AB on 26.09.2024 i.e., beyond the time limit prescribed for filing of Form 10AB. Hence, rejected the application filed in Form 10AB for registration u/s 12AB.
Aggrieved by the order of the Ld.CIT(E), the assessee is now in appeal before the Tribunal.
The Ld.Counsel for the assessee Shri P.Vinod, Advocate submitted that the Ld.CIT(E) is erred in rejection of application filed in Form10AB, seeking registration u/s 12AB of the Act, even though the assessee had explained the reasons, that the assessee was under bonafide belief that the application under Form 10AB of the Act for regular registration could be made before six months from the date of expiry of provisional registration. The Ld.Counsel for the assessee further submitted that the assessee was not given proper opportunity to explain these facts to the Ld.CIT(E). Therefore, he submitted that the matter may be remanded back to the Ld.CIT(E) to consider the application filed by the assessee on merits by providing an opportunity of being heard to the assessee.
The Ld.DR, Shri Gurupreet Singh on the other hand, supporting the order of the Ld.CIT(E) submitted that there is no provision under the Act to rectify or condone the mistakes committed in filing forms for registration by the Ld.CIT(E). Further as per amended provisions of section 12AB w.e.f. 01.10.2024, the assessee can seek condonation of delay in filing incorrect form/belated form with appropriate authority. Since the assessee has filed Form 10AB belatedly, there is no provision for Ld.CIT(E) to rectify the form, he has rightly rejected the application filed by the assessee and thus the order of the Ld.CIT(E) should be upheld.
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. Admittedly, the Ld.CIT(E) rejected the application filed by the assessee in Form10AB for registration u/s12AB of the Act, on the ground that the assessee has filed relevant Form on 26.09.2024, beyond the time limit prescribed for filing Form No.10AB as per the Act. It was the contention of the assessee that it had filed relevant Form 10AB on or before six months from the expiry of provisional registration, which is evident from the date of registration in Form No.10AC on 21.10.2022 and the assessment year upto which the provisional registration was granted i.e. A.Y.2025-26. The assessee did not get proper opportunity to explain these facts to the Ld.CIT(E). In our considered view, the Ld.CIT(E) while rejecting the application filed by the assessee should have given reasonable opportunity of hearing to the assessee to explain its case, more particularly, when the application filed by the assessee on 26.09.2024 is before six months from the expiry of provisional registration. Since the Ld.CIT(E) dismissed the application filed by the assessee without providing adequate opportunity of hearing, in our considered view, the matter needs to be set aside to the file of the Ld.CIT(E). Thus, we set aside the order of the Ld.CIT(E) and restore the issue back to the file of the Ld.CIT(E), to provide another opportunity of hearing to the assessee to explain its case. The assessee may explore all possible options available under the Act, including filing of petition for condonation of delay if any, for filing of application beyond the due date provided under the Act. The Ld.CIT(E) is directed to consider the case on merits after providing one more opportunity of hearing to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on 30th June, 2025.