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Facts
The assessee, Tapasvi Foundation Trust, filed an application for registration under Section 12A(1)(ac)(iii) in Form 10AB. After its initial application was rejected, the assessee filed a fresh application within the extended time allowed by CBDT Circular No. 7 of 2024 to rectify an incorrect section code. The CIT(E) rejected this fresh application as non-maintainable, arguing that the assessee was not covered by Clause 4.1 of the Circular because the previous application had not been rejected at the time of the Circular's issuance.
Held
The ITAT, following a precedent case, ruled that the CIT(E)'s rejection was incorrect. It determined that the assessee was entitled to the benefit of the extended time under CBDT Circular No. 7 of 2024 for filing a fresh application to correct errors, especially since the rectification occurred before the original application was finally rejected. The Tribunal set aside the CIT(E)'s order and directed a fresh consideration of the application after providing the assessee with a due opportunity of hearing.
Key Issues
Whether the CIT(E) was justified in rejecting the assessee's fresh application for registration under Section 12A, which was filed to rectify an earlier error and within the extended period provided by CBDT Circular No. 7 of 2024, on the grounds of non-maintainability.
Sections Cited
12A, 12AB(1)(b)(ii), 12A(1)(ac)(iii), 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & Ms. SUCHITRA KAMBLE
The present appeal was listed for hearing on account of the original order passed by the ITAT dated 14.08.2025 being recalled for hearing afresh in lieu of the Miscellaneous Application filed by the assessee in this regard being allowed by the ITAT in MA No.84/Ahd/2025, dated 14.08.2025.
[ Tapasvi Foundation Trust vs. CIT(E)] - 2 – 2. The issue relates to the rejection of assessee’s application seeking registration of the assessee trust filed in Form No. 10AB under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). The grounds raised by the assessee are as under:
“1. The order passed under section 12AB(1)(b)(ii) of the Act is bad in law. 2. The learned CIT(Exemption) has erred in law as well as on facts in rejecting the application for registration u/s 12A(1)(ac)(iii) by considering it as non-maintainable.”
The order of the Ld. CIT(E) reveals that the assessee has originally filed an application in Form 10AB on 30.03.2024, which was rejected by the Ld. CIT(E) vide his order dated 02.09.2024. In the meanwhile, the assessee had filed fresh application dated 05-06-2024,the impugned application before us, which the Ld. CIT(E) noted that though it was filed within the extended time provided by the CBDT Circular No.7 of 2024, dated 25.04.2024 i.e. upto 30.06.2024, however, since the earlier application filed by the assessee was not rejected by then, having been rejected on 02-09-2024, therefore, the assessee was not saved by the Clause 4.1 of the said Circular which provided that where the earlier application of the assessee stood rejected on the date of the issuance of the Circular, on account of having been furnished after the due date, the assessee can file a fresh application in Form 10AB within the extended time provided i.e. 30.06.2024. [ Tapasvi Foundation Trust vs. CIT(E)] - 3 – 4. The issue it was pointed out by the Ld. Counsel for the assessee was covered by the order of the ITAT in dated 16.09.2025 in case of Radhe Krushna Gau Sala vs. CIT(E). Ld. DR fairly agreed with the same.
We have heard the rival contentions. Undeniably, in the present case, the impugned application filed by the assessee was filed within the extended time provided by the CBDT Circular No. 7 of 2024 for filing of such applications. The said application was filed for rectifying the mistake in the original application filed by the assessee of mentioning incorrect Section Code. In the impugned application, the assessee admittedly has mentioned the correct Section Code. The impugned application was filed by the assessee even before the original application was considered and order passed by the Ld. CIT(E) rejecting the said application. The impugned application has been rejected as non-maintainable by the Ld. CIT(E) stating that it has not recorded by para 4.1 of CBDT Circular No.7 of 2024. Undoubtedly, the facts of the present case are identical to the case of Radhe Krushna Gau Sala (supra) in wherein the ITAT has held that the rejection of such application by the Ld. CIT(E) was incorrect and has directed the Ld. CIT(E) to consider the application afresh. The findings of the ITAT in this regard are at para 4 of its order as under:
“4. We have considered the contentions of both the parties and also perused the order of the Ld. CIT(E). The assessee’s application in From 10AB seeking final approval u/s. 80G(5) of the Act has been rejected holding it as filed delayed, beyond time prescribed, and not entitled to benefit of extended time given for filing such application by CBDT Circular No. 7 of 2025. The benefit of the CBDT Circular has been denied stating that [ Tapasvi Foundation Trust vs. CIT(E)] - 4 – the assessee’s case does not qualify as per para 4.1 of the said Circular. The said para allows assessees to file applications afresh within the extended time given by the Circular, where their earlier applications were rejected for being filed delayed or on account of mentioning wrong section code. In the assessee’s case, the earlier application was rejected since the assessee did not participate in the proceedings before the Ld.CIT(E ) and he therefore was unable to verify the genuineness of activities carried out by the assessee as also the fulfillment of other conditions prescribed in law. We have perused the contents of the CBDT Circular No.7 dated 25-04-24, which extends time limit for filing applications in Form 10AB not filed upto the date of the issuance of the said Circular, upto 30-06-24. Applications pending for approval on the date of issuance of the Circular, i.e. 25-04-24, were also to be treated as valid. Since time limit was extended, therefore those assessees whose earlier applications were rejected as delayed were allowed to file fresh applications within extended time, vide Para 4.1 of the Circular. The said para also allowed assesses whose earlier applications were rejected on account of incorrect section code mentioned, to file fresh applications within extended time limit. Thus, the CBDT Circular extended time for filing Form 10AB and also allowed filing of fresh form within the extended time in circumstances where original Form stood rejected for delayed filing or for mentioning incorrect section code. In the facts of the present case, the assessee had mentioned wrong code in the original application filed on 23-03- 24 and rectified the same by filing another form 10AB on 04-06- 24, within the time extended by CBDT Circular 07 dated 25-04- 24 and even before the original Form was considered and order passed by Ld.CIT( E) on 02- 09-24. Clearly when the CBDT Circular itself gives assessee benefit of extended time to file fresh applications for rectifying their errors of mentioning wrong section code on account of which their earlier application stood rejected, in the facts of the present case where the assessee rectified this error even before detection by the Ld.CIT(E), the assessee stands on a better footing. This new application, rectifying the error in the earlier application of wrong section code, filed before the original application was considered for approval and order passed therein, is to be considered as original application, and being filed within extended time , the assessee’s application, we hold, is squarely covered by CBDT Circular No.7 dated 25-04-24. The assessee we hold is entitled to benefit of extended time prescribed in the said Circular and the rejection of the same by the Ld.CIT( E) as not covered by the CBDT Circular, is incorrect. In view of the above the order of the Ld.CIT (E) is set aside and he is directed to consider assessee’s application seeking approval u/s 80G(5) of the Act and pass order following due process of law.”
Since, the facts in the present case are identical to that in the case of Radhe Krushna Gau Sala (supra), the issue raised is covered by the order of the ITAT in the said case, following which, we hold that the rejection of assessee’s application by the [ Tapasvi Foundation Trust vs. CIT(E)] - 5 – Ld. CIT(E) was incorrect and the Ld. CIT(E) is, therefore, directed to consider the application afresh after giving due opportunity of hearing to the assessee.
In the result, appeal filed by the assessee is allowed.
This Order pronounced on 08/10/2025
Sd/- Sd/- (SUCHITRA KAMBLE) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 08/10/2025 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��यथ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. आयकर आयु�(अपील) / The CIT(A)- 4. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,