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Facts
The assessee, a charitable trust, had its application for regular registration rejected by the CIT(E) due to alleged delay. The CIT(E) argued that the trust should have applied for regularization by August 2023, having continued activities since provisional registration on 28.02.2023. The assessee contended there was no delay as the provisional registration was valid until AY 2025-26 and the application was filed before March 31, 2026. They also argued that the CIT(E) has the power to condone delay.
Held
The Tribunal found that the impugned order was based on a technicality without addressing the substantive issues of the trust's charitable objects and genuineness of activities. The Tribunal noted that the CIT(E) has the power to condone delays if sufficient cause is shown. Therefore, the Tribunal set aside the order and restored the matter for fresh adjudication.
Key Issues
Whether the CIT(E) rightly rejected the application for registration on technical grounds without adjudicating on the substantive aspects and if the delay in filing the application could be condoned.
Sections Cited
12A(1)(ac)
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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI JAGADISH
ORDER Per: SHRI JAGADISH, A.M.: 1. This appeal is directed against the order passed by the Commissioner of Income Tax (Exemptions) rejecting the application filed by the assessee in Form No. 12AB under clause (iii) of section 12A(1)(ac) of the Income-tax Act, 1961 .
The assessee is a charitable trust and has been granted provisional registration under the Act which was valid up to Assessment Year 2015–16. The assessee thereafter filed an Annacharya Lokapur Foundation application seeking registration in Form No. 12AB. The CIT(E) rejected the application on the ground that the assessee had continued its activities since obtaining provisional registration on 28.02.2023 , therefore it should have applied for regularisation of provisional registration by Augst 2023 .
Before us, the learned Authorised Representative submitted that there was no delay in filing the application for regular registration as assessee has the provisional registration till A.Y 2025- 26 and it has filled the application before 31st March 2026. The Ld AR further submitted that even assuming there was any delay in filing the application, the law as amended now confers power upon the CIT(E) to condone the delay in appropriate cases and there was genuine cause in support of which assessee has filled affidavit. It was contended that the rejection without adjudicating upon the objects of the trust and genuineness of its activities is unsustainable in law.
The learned Departmental Representative relied upon the impugned order.
We have considered the rival submissions and perused the material available on record. We find that the impugned order proceeds on a technical premise without addressing the substantive aspects required to be examined while considering an application for registration. The authority is required to satisfy itself about the charitable objects of the trust and the genuineness of its activities. There is no adverse finding recorded by the CIT(E) on these aspects.Further, the statute now vests the CIT(E) with the power to condone delay in filing such application, subject to satisfaction of sufficient cause.
Annacharya Lokapur Foundation 6. In the interest of justice and fair play, we set aside the impugned order and restore the matter to the file of the CIT(E) for fresh adjudicationsubject to the condition that the assessee shall deposit cost of ₹11,000/- under the head “Other Receipts” of the Income Tax Department within fifteen days from 26.02.2026.Proof of such deposit shall be produced before the CIT(E) at the time of fresh proceedings.Adequate opportunity of being heard shall be granted and a speaking order shall be passed.
In the result, the appeal of the assessee is allowed for statistical purposes subject to the above cost. Order pronounced in the open court on 26/02/2026 Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (JAGADISH) Judicial Member Accountant Member Mumbai, Dated: 26/02/2026 Ashwani Rao Sr. Private Secretary Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T.