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Facts
The assessee's applications for registration under Section 12A and approval under Section 80G were rejected by the CIT(E) for being filed beyond the prescribed time limits. The assessee contended that the delay was due to filing another application based on a CBDT circular and that the rejections were made without proper appreciation of facts.
Held
The Tribunal condoned the delay in filing the appeals, noting the Supreme Court's emphasis on substantial justice over technicalities. The Tribunal set aside the CIT(E)'s orders and restored the matters to the CIT(E)'s file for fresh adjudication, with a direction to grant the assessee an opportunity to explain its case.
Key Issues
Whether the assessee's applications for registration and approval were filed within the time limits prescribed under the Act and relevant circulars, and whether the delay in filing should be condoned.
Sections Cited
12A, 80G, 12AB
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आयकर अपील सं. / & 152/PUN/2025 Chaitnya Pratishtan, CIT (Exemption), Pune 2/43 Behind Ram Janki Hall, Gaon Bhag, Ichalkaranji-416115 Vs. PAN : AADAC3451F अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Bhuvanesh Kankani Department by : Shri Amol Khairnar Date of hearing : 14-05-2025 Date of 29-05-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The above two appeals filed by the assessee are directed against the separate orders both dated 19.04.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune (“CIT(E)”) rejecting the application(s) for grant of registration u/s 12A and approval u/s 80G of the Income Tax Act, 1961 (the “Act”). For the sake of convenience, both these appeals were heard together and are being disposed of by this common order.
There is a delay of 202 days in filing of both the appeals before the Tribunal. The assessee has moved separate condonation applications for condonation of delay. Sworn affidavits have been filed along with the applications stating therein the reason for the said delay. The Ld. Counsel for the assessee has submitted a brief written synopsis of the case inter alia stating the reason for such delay to be that the assessee had filed another registration application in pursuance of CBDT Circular No. 7/2024 within the extended time limit for filing the application till 30th June 2024, which also got rejected in December 2024 by the Ld. CIT(E) and thereafter the present appeal(s) were filed against the impugned order(s) of the Ld. CIT(E) rejecting the applications of the assessee under section 12A and 80G of the Act.
2.1 After hearing both the sides and perusing the records, find some merit in the submissions of the Ld. Counsel for the assessee that there was a reasonable cause in not filing the appeal before the Tribunal within stipulated time. We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
2.2 We also find that recently the Hon'ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under:
14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.
2.3 Considering the totality of facts and in the circumstances of the case set out above and respectfully following the above decision(s) of the Hon'ble Supreme Court, we hereby condone the delay in filing of the appeal and admit the same for adjudication.
3. In the assessee has challenged the order of the Ld. CIT (E) in rejecting the application for registration u/s 12A of the Act while ITA No.152/PUN/2025 relates to the order of the Ld. CIT(E) in denying the approval u/s 80G of the Act.
Facts of the case in ITA No.151/PUN/2025, in brief, are that the assessee filed an application in Form No.10AB on 30.11.2023 for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act. With a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in force by the trust/ institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 16.01.2024 requesting the assessee to upload certain information/ clarification. The assessee was asked to file compliance by 31.01.2024. In response thereto, the assessee filed the requisite details. The Ld. CIT(E) while going through those details and documents filed along with the application, found certain discrepancies for which he issued another show cause notice on 04.04.2024 seeking compliance by 12.04.2024. The said discrepancies recorded by the Ld. CIT(E) in para 2.2 of the impugned order is reproduced below: "(i) It is seen from your reply to notice dated 16/01/2024 that the date of commencement of your activities is 14/09/2017. Further, as per the copy of order of provisional registration under section 12AB read with section 12A(1)(ac)(vi) of the Income Tax Act, 1961 submitted by you, the date of provisional registration is 31/05/2021. As per the provisions of section 12A(1)(ac) (iii) of the Act, where a trust or institution has been provisionally registered under section 12AB of the Act, the application for regular registration under section 12AB is required to be filed within 6 months from the date of commencement of activities. Since, your activities were already commenced as on the date of provisional registration, you were required to file the present application within 6 months from the date of provisional registration Le. on or before 30/11/2021. The extended due date date for filing of such application was 30/09/2023 as per CBDT, Circular No.6 of 2023, dated 24/05/2023. Whereas you have filed the present application on 30/11/2023. Thus, it is seen that you have not filed the present application within the time limit allowed under section 12A(1)(ac) (iii) of the Income Tax Act, 1961. (ii) It is seen that the expiry date of provisional registration under section 12AB of the Act in your case is 31/03/2024. As per the provisions of section 12A(1)(ac) (iii) of the Act, where a trust or institution has been provisionally registered under section 12AB of the Act, the application for regular registration under section 12AB is required to be filed, at least six months prior to expiry of period of the provisional registration or within six months from the date of commencement of activities, whichever is earlier. Since, the period of provisional registration was due to expire on 31/03/2024, the present application was required to be filed before 30/09/2023. However, the present application filed by you is on 30/11/2023 i.e. after the expiry of period allowed under section 12A(1)(ac)(iii) of the Act. Thus, it is seen that you have not filed the present application within the time limit allowed under section 12A(1)(ac)(iii) of the Income Tax Act, 1961." 4.1 The assessee furnished its response to the above notice on 11.04.2024, however, the contention of the assessee was not found to be acceptable to the ld. CIT(E) who proceeded to reject the application filed by the assessee for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB of the Act by observing as under:
“2.3 The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the registration shall also be liable to be cancelled. The compliance to the said notice was due on 12/04/2024. The notice was duly served on the assessee through e-portal and email.
The assessee responded to the said notice on 11/04/2024. In response, the assessee has referred to the decision by Hon. Pune ITAT in the case of Sanj Sawali Care Foundation Vs CIT (Exemptions), Pune and also requested to condone the delay. However, the contention of the assessee is not acceptable considering the following: 3.1 The CBDT vide Circular No.6/2023 dated 24/05/2023, extended the date of filing of Form No.10A in case of an application under clause (i) of the first proviso to clause (23C) of section 10 or under sub-clause (i) of clause (ac) of sub-section (1) of section 12A or under clause (i) of the first proviso to sub- section (5)of section 80G of the Act, till 30/09/2023 where the due date for making such application has expired prior to such date; and Form No.10AB, in case of an application under clause (iii) of the first proviso to clause (23C) of section 10 or under sub-clause (iii) of clause (ac) of sub-section (1) section 12A of the Act, till 30/09/2023 where the due date for making such application has expired prior to such date. 3.2 It is seen from assessee's submission that the date of commencement of the trust's activities is 14/09/2017. Further, as per the copy of order of provisional registration under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 submitted by the assessee, the date of provisional registration is 31/05/2021. As per the provisions of section 12A(1)(ac) (iii) of the Act, where a trust or institution has been provisionally registered under section 12AB of the Act, the application for regular registration under section 12AB is required to be filed within 6 months from the date of commencement of activities. Since, the trust's activities were already commenced as on the date of provisional registration, the assessee was required to file the present application within 6 months from the date of provisional registration i.e. on or before 30/11/2021 The extended due date for filing of such application was 30/09/2023 as per CBDT, Circular No.6 of 2023, dated 24/05/2023. Whereas the assessee has filed the present application on 30/11/2023. Thus, it is seen that the assessee has not filed the present application within the time limit allowed under section 12A(1)(ac) (iii) of the Income Tax Act, 1961.
4. Further, the expiry date of provisional registration under section 12AB of the Act in the assessee's case is 31/03/2024. As per the provisions of section 12A(1)(ac) (iii) of the Act, where a trust or institution has been provisionally registered under section 12AB of the Act, the application for regular registration under section 12AB is required to be filed, at least six months prior to expiry of period of the provisional registration or within six months from the date of commencement of activities, whichever is earlier. Since, the period of provisional registration was due to expire on 31/03/2024, the present application was required to be filed before 30/09/2023. However, the present application filed by the assessee is on 30/11/2023 i.e. after the expiry of period allowed under section 12A(1)(ac) (iii) of the Act. Thus, it is seen that the assessee has not filed the present application within the time limit allowed under section 12A(1)(ac) (iii) of the Income Tax Act, 1961.
5. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 31/05/2021 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
Aggrieved with such order of the Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:
“1. On facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be kindly held that the order passed by the Commissioner of Income Tax- Exemptions ['CIT(E)'], Pune, rejecting the Appellants application for seeking registration u/s 12AB of the Act is against the provisions of the Act. Accordingly, the order passed by the Ld. CIT(E) be held as not tenable in law and be set aside directing the Ld. CIT(E) to grant registration. The appellant be granted just and proper relief in this respect.
2. On facts and circumstances prevailing in the case and as per provisions & scheme of the Act it be kindly held that Ld. CIT(E) erred in passing the rejection order without perusing the material available on record. Accordingly, the order passed by the Ld. CIT(E) be set aside and Ld. CIT(E) be kindly directed to grant registration. The appellant be granted just and proper relief in this respect.
3. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.”
6. Admittedly, the facts of the case in are similar to that of ITA No.151/PUN/2025 narrated above. Similar grounds have been raised in ITA No.152/PUN/2025 which read as under:
“1. On facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be kindly held that the order passed by the Commissioner of Income Tax- Exemptions ['CIT(E)'], Pune, rejecting the Appellants application for seeking registration u/s 80G(5) of the Act is against the provisions of the Act. Accordingly, the order passed by the Ld. CIT(E) be held as not tenable in law and be set aside directing the Ld. CIT(E) to grant registration. The appellant be granted just and proper relief in this respect.
2. On facts and circumstances prevailing in the case and as per provisions & scheme of the Act it be kindly held that Ld. CIT(E) erred in passing the rejection order without perusing the material available on record. Accordingly, the order passed by the Ld. CIT(E) be set aside and Ld. CIT(E) be kindly directed to grant registration. The appellant be granted just and proper relief in this respect.
3. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.”
It is the submission of the Ld. AR that since the Ld. CIT(E) has rejected the grant of registration u/s 12A of the Act and cancelled the provisional registration granted earlier, he refused to grant approval u/s 80G of the Act.
The Ld. Counsel for the assessee submitted that the assessee in response to the first notice issued by the Ld. CIT(E) has filed the various details. Further, the assessee also submitted its response providing clarification on the discrepancies pointed out by the Ld. CIT(E) in the show cause notice. But the Ld. CIT(E) rejected the assessee’s contention without appreciating the facts of the assessee’s case in correct perspective. He submitted a chart reproduced below, presenting certain fact of the case and prayed that in light of these facts, the assessee should be given one more opportunity to present and explain its case before the Ld. CIT(E) by setting aside the impugned order(s) for fresh adjudication: “3. Certain facts 3.1. Following table demonstrates the dates of applications made under the Act Chronological Particular Date sequence 1 Getting provisional 12AB registration 31/05/2021 (pg. 46 of PB) Getting provisional 80Gregistration 28/05/2021 (pg. 49 of PB) 2 Filing application in form 10AB for regularizing the 30/11/2023 12AB and 80G registration 3 Ld. CIT(E) passed order rejecting both the 19/04/2024 applications. (Impugned orders) 4 CBDT issued circular no. 07/2024- extending the 25/04/2024 (pg. date for filing application in form 10AB till 82 of PB) 30/06/2024 5 Another registration applications filed in form 26/06/2024 (pg. 10AB for both sec. 12AB and 80G 1-22 of PB) 6 Ld. CIT(E) rejected the applications on the ground 09/12/2024 that Appellant do not have provisional registration as it was cancelled vide order dt.19/04/2024 (pg. 23-45 of PB) 7 Present Appeal filed before Hon'ble Pune ITAT 18/01/2025 *PB Paper book dt.05/05/2025) 3.2. While rejecting the application vide impugned orders, Ld. CIT(E) had also cancelled the provisional registrations, owing to which Appellant's 2nd applications were held to be not maintainable. 4. Our Submission/Prayer: 4.1. Since, CBDT had extended the due date for filing form 10AB till 30/06/2024, the applications filed on 30/11/2023 should be held as within time and accordingly, the impugned orders be kindly set aside and Ld. CIT(E) be directed to de novo adjudicate the applications.”
The Ld. DR, on the other hand, supported the order of the Ld CIT(E) .
We have heard Ld. Representatives of the parties, perused the material available on record and the paper book filed by the Ld. AR on behalf of the assessee. It is an admitted fact that the assessee duly filed its response to the notice(s) issued by the Ld. CIT(E) which were not found tenable by him and he rejected the application(s) of the assessee for the reasons reproduced in the preceding paragraphs. The assessee’s application for grant of approval u/s 80G has also been rejected by the Ld. CIT(E) on the similar grounds. Further, since the application for grant of registration u/s 12A of the Act was rejected and the provisional registration granted earlier was cancelled, he also rejected the application for grant of approval u/s 80G of the Act. From the factual representation of the dates of application(s) filed by the assessee before us, we find that the original applications of the assessee filed on 30.11.2023 for regularizing section 12AB and 80G registration were rejected by the Ld. CIT(E) vide impugned orders dated 19.04.2024. The assessee thereafter filed another application on 26.04.2024 pursuant to extension granted by the CBDT vide Circular 7/2024 dated 25.04.2024 for filing the application till 30.06.2024. However, the Ld. CIT(E) again rejected the assessee’s application(s) vide his order dated 09.12.2024 on the ground that the assessee do not have provisional registration as the same were cancelled vide his impugned orders passed on 19.04.20224. In this view of the matter the Ld. AR has submitted that the assessee’s applications filed on 30.11.2023 were filed well within the extended time allowed by the CBDT and therefore the impugned order(s) of the Ld. CIT(E) be set aside and a direction be given to him to decide the issue afresh after giving the adequate opportunity of hearing to the assessee.
Considering the totality of the facts and in the circumstances of the case enumerated above and in the interest of justice, we deem it proper, to set aside the impugned orders of the Ld. CIT(E) and restore the issue(s) to his file with a direction to grant an opportunity to the assessee to explain afresh as per fact and law. The assessee is also hereby directed to submit the details as called for by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order(s) as per law. We hold and direct accordingly. The grounds raised by the assessee in both the appeals are accordingly allowed for statistical purposes.
In the result, both the appeals in and ITA No.152/PUN/2025 filed by the assessee are allowed for statistical purposes.