CHAITANYA BHRATHI,VIZIANAGARAM vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD
Facts
The assessee, Chaitanya Bharathi, applied for regular registration under Section 12AB of the Income Tax Act, but the application was rejected by the Ld. CIT(E) as it was filed 42 days beyond the extended due date of June 30, 2024. The assessee submitted an affidavit explaining that the delay was due to the Chartered Accountant's medical emergency, making it a bona fide and unintentional procedural lapse.
Held
The tribunal noted the insertion of a new proviso to Section 12A (w.e.f. 01.10.2024) empowering the CIT to condone delays for reasonable cause. Since the rejection order was issued after this proviso came into effect, the tribunal held that the Ld. CIT(E) erred by not considering the assessee's explanation for delay and the new statutory provision. The tribunal set aside the order and remanded the matter back to the Ld. CIT(E) for re-consideration of delay condonation and the application on merits, granting the assessee an opportunity of being heard.
Key Issues
Whether the Ld. CIT(E) erred in rejecting the assessee's application for permanent registration under Section 12AB solely based on the delay in filing, without considering the bona fide reasons for the delay or the statutory provision for condonation of delay introduced by Finance Act, 2024.
Sections Cited
12AB, 12A, 80G
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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER: 1. This appeal is filed by the assessee against rejection order of Learned Commissioner of Income Tax (Exemption), Hyderabad [hereinafter in short “Ld.CIT(E)”] vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-
I.T.A.No.179/VIZ/2025 Chaitanya Bharathi
25/1073445292(1) dated 13.02.2025 seeking registration under section 12AB of the Income Tax Act, 1961 (in short ‘Act’).
Briefly stated facts of the case are that the assessee has filed an e-application in Form No.10AB seeking registration under section 12AB of the Act. The Ld.CIT(E) issued notices to the assessee in respect of proceedings under section 12A(1)(ac)(iv) of the Act to produce the copy of Memorandum of Association/Trust Deed for verification and to furnish a detailed reply on the specific information called for in the said notice. In response, assessee has submitted some of the details as called for. On perusal of the submissions made by the assessee, it is observed by the Ld.CIT(E) that the CPC has issued provisional registration in form 10AC dated 05.04.2022 valid from AY 2022-23 to AY 2024-25. 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. Further, 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 has applied Form 10AB for regular registration u/s 12AB on 11.08.2024, i.e beyond the time limit prescribed for filing of Form 10AB. Therefore, Ld.CIT(E) observing that assessee has made the application in Form 10AB beyond the time limit prescribed, and thus rejected the registration under section 12AB of the Act.
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Aggrieved by the rejection order, assessee filed an appeal before us and raised following grounds in its appeal: -.
“1. That the Ld. CIT (Exemptions) erred in law and on facts in rejecting the appellant's application for re-registration u/s 12AB of the IT Act, 1961 solely on the ground of delay in filing Form 10AB, without appreciating that the delay was due to genuine and bona fide circumstances beyond the appellant's control. 2. That the Ld. CIT(Exemptions) failed to consider that the appellant trust is managed primarily by volunteers and trustees engaged in social and charitable work, and was under a bona fide belief that the existing registrations u/ss 12A and 80G remained valid until AY 2026-27, as per the earlier certificate issued. 3. That the appellant has at all times complied with the substantive conditions of section 12A of the Act, including application of income for charitable purposes and maintenance of proper books of account; the default, if any, was merely procedural and not intentional. 4. That no prejudice has been caused to the Revenue by the delay in filing Form 10AB, as no exemption was claimed during theintervening period, and there has been no diversion or misapplication of funds by the appellant trust. 5. That the impugned order rejecting the application without granting an opportunity of being heard is in violation of the principles of natural justice, and fails to consider the appellant's bona fide explanation for the delay. 6. That the Ld. CIT(Exemptions) ought to have condoned the delay in the interest of justice, particularly in light of judicial precedents which hold that procedural lapses in bona fide cases involving charitable entities should not defeat substantive rights. 7. That the appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing.”
The only issue contested by the assessee is with respect to rejection of the Registration under section 12AB of the Act by the Ld.CIT(E) solely on the
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reason that the assessee has filed an application under section 12AB of the Act beyond the time prescribed.
At the outset, Ld. Authorized Representative (hereinafter in short “Ld.AR”] submitted that various documentary evidences have been provided before Ld. CIT(E) but he has rejected the application observing that the assessee has filed the application in Form 10AB beyond the time limit prescribed as per CBDT Circular No. 7 of 2024 dated 25.04.2024. Before us, Ld.AR of the assessee filed an application for condonation of delay along with an affidavit to explain the cause of delay of 42 days in filing the application in Form 10AB seeking registration u/s 12A of the I.T. Act, 1961. The Ld. AR has thus, submitted that the delay was not intentional and was beyond the control of the assessee. The Ld.AR further submitted that the Ld.CIT(E) could have given an opportunity to the assessee to substantiate the reasons for delay in filing the application. He has referred to the proviso to section 12A of the Act and submitted that after the insertion of the said proviso vide Finance Act, 2024 w.e.f. 01.10.2024, the Pr. CIT or the CIT is empowered to ascertain whether any reasonable cause for delay in filing the application while considering the petition filed for condonation of delay. Thus, the Ld. AR has submitted that the impugned order passed by the Ld.CIT(E) on 19.02.2025 much after the insertion of the said proviso to section 12A of the I.T. Act, 1961, but Ld.CIT(E) has not considered the same. Hence, he has pleaded that the matter may be
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remanded to the record of the Ld.CIT(E) for re-consideration on the point of condonation of delay as well as deciding the application for registration under section 12A of the Act on merits.
On the other hand, Ld. Departmental Representative [hereinafter in short “Ld. DR”] heavily relied on the order of the Ld. CIT(E) and submitted that the proviso comes into effect only from 01.10.2024 and cannot be applied to the instant case where the application was made prior to the insertion of the proviso.
We have heard both the sides and perused the material available on record. The assessee responded to the notices issued by the Ld.CIT(E). We find that Ld. CIT(E) while rejecting the application in Form10AB for the purpose of Registration of the society under section 12AB of the Act has observed as follows: -
“3. In response to the above notice, the assessee submitted his reply. On perusal of the submissions made by the assessee, it is observed that the CPC has issued provisional registration in form 10AC dated 05.04.2022 valid from AY 2022-23 to AY 2024-25. 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. Further, 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 has applied form 10AB for regular registration u/s 12AB on 11.08.2024, i.e beyond the time limit prescribed for filing of form 10AB. 4. Keeping in view of the above, as the assessee has made the application in form10AB beyond the time limit prescribed, the present application in form 10AB for registration u/s 12AB is herewith rejected.”
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On a perusal of the Ld. CIT(E) order, we find that he has rejected the application filed in Form-10AB as it is filed on 11.08.2024 which is beyond the extended time prescribed by CBDT which expires on 30.06.2024. We find that before rejecting the application, Ld.CIT(E) has not provided any opportunity to the assessee to explain the cause for delay in filing the application for permanent registration in Form 10AB of the Act. Before us, assessee has filed an affidavit explaining the cause of the delay, which is reproduced below: -
“1. That I am a practicing Chartered Accountant, and I have been serving as Chartered Accountant of Chaitanya Bharati Society, situated atPlot No. 70, C.B. Colony Contonment- 505003, Andhra Pradesh, India. 2. That the Society had obtained provisional registration u/s 12AB of the IT Act, 1961, vide Form 10AC dated 05.04.2022, issued by the Commissioner of Income Tax (Exemptions), which was valid up to 30.09.2023. 3. That as per CBDT's extension, the due date for filing an application in Form 10AB for obtaining permanent registration was extended up to 30.06.2024. 4. That I had intended and planned to file Form 10AB on or before the said due date. However, unfortunately, on 26.06.2024, I fell ill and was admitted to the hospital, where I remained under medical care further recovery took approximately six weeks. 5. That due to this unforeseen medical condition, the filing Form 10AB within the due date could not be completed. 6. That on 08.08.2024, the Secretary of the Society contacted me to enquire about the filing status of the Permanent Registration application, and I then informed him of my illness and the consequent delay. I assured him that the application would be filed immediately. 7. That accordingly, I filed Form 10AB on 11.08.2024, thereby resulting in a delay of 42 days beyond the due date of 30.06.2024.
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That I submit that the said delay was neither deliberate nor intentional, but solely attributable to the medical emergency I faced during the relevant period. 9. That I further affirm that there was no mala fide intention or negligence on my part or on the part of the Society in respect of the statutory compliance. 10. That I am making this affidavit in good faith and in support of the Society's request for condonation of delay and for consideration of its application for permanent registration on merits.”
Further, Vide Finance Act, 2024, a proviso is inserted w.e.f. 01.10.2024 to section 12A of the Act as under: -
“Provided that where the application is filed beyond the time allowed (in sub clauses (i) to (v), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time”.
Thus, it is clear that after the insertion of this proviso, the Pr. CIT/CIT while considering the application for registration u/s 12A and approval u/s 80G of the I.T. Act, 1961 is empowered to condone the delay, if there is a reasonable cause for such delay in filing the application. Accordingly, in the facts and circumstances of the case and in the interest of justice, we grant one more opportunity to the assessee and thereby set-aside the impugned order and restore the matter back to the file of Ld.CIT(E) for considering the condonation of delay on the basis of the reasons explained by the assessee while passing a speaking order with respect to granting of Registration in accordance with law. Needless to say, the assessee shall be given an appropriate opportunity of being
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heard during the remand proceedings. The Assessee is also directed to cooperate in the remand proceedings and furnish necessary documents / information as required by the Ld.CIT(E) without seeking unnecessary adjournments. It is ordered accordingly.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th August, 2025.
Sd/- Sd/- (दुव्वूरु आर एल रेड्डी) (एस बालाकृष्णन) (DUVVURU RL REDDY) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष/ VICE PRESIDENT Dated: 28.08.2025 Giridhar, Sr.PS आदेशकीप्रनतनलनपअग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee : Chaitanya Bharathi Plot No. 02, Naidu Residency C.B. Colony, Cantonment Vizianagaram – 535003 Andhra Pradesh – 535003 2. रधजस्व/ The Revenue : Commissioner of Income Tax Exemptions Ward Hyderabad 3. The Principal Commissioner of Income Tax 4. नवभधगीयप्रनतनिनर्, आयकरअपीलीयअनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax गधर्ाफ़धईल / Guard file 6. आदेशधिुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
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