SHREE SURAT JAIN PANCHAYAT FUND,MUMBAI vs. CIT EXEMPTIONS, MUMBAI

The present appeal preferred by the assessee is directed against the order of Commissioner of Income Tax (Exemption) [in short “Ld. CIT(E)”], dated 28.06.2025, rejecting the application of assessee in Form 10AB under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 (the Act) seeking registration under section 12AB of the Act. The main reason for rejecting the application of assessee was delay in filing of application in Form 10AB of the Act. It is observed by the ld. CIT(E) while rejecting the subject application that the Shree Surat Jain Panchayat Fund assessee-trust should have applied for regularization of provisions registration latest by the end of September 2023 (being six months from the end of Financial Year in which the activities were carried out), however the Trust could have filed application for regularization of provisional registration under section 12A on 29.10.2024 i.e., after a delay of 12 months. The assessee in response to aforesaid delay have submitted that the delay in filing of application was due to inadvertent oversight, as the person appointed by the Trust to look after its taxation assignments was having limited knowledge of taxation rules.

Such reasons assigned by the assessee was not found favour with the ld. CIT(E), who observed that the contention of assessee is not acceptable as oversight cannot be considered as a reasonable cause of delay, the assessee-trust is supposed to comply with compliances of law, it is well-settled principle that ignorance of law cannot be pleaded as defense or valid excuse. Before us, following grounds of appeal raised by the assessee to challenge the aforesaid order of ld. CIT(E):

Per contra, the ld. CIT-DR representing the revenue vehemently supported the orders of ld. CIT(E).

We have considered the rival submissions and perused the material available on record and case laws relied upon by the ld. AR. Admittedly in present case which falls during the period, when the CBDT was also observing that there is certain misunderstanding of law and difficulties faced by the assessee and stack holders in filing of Form 10A/10AB, therefore some relaxation has been allowed to them. Accordingly, the Circular No. 7/24 (supra) was issued and the date of filing of application are relaxed up to 30.06.2024. The decision relied upon by the ld. AR are in the case of Shri Ramtirth Godavari Seva Samiti vs. CIT(E) dated 05.01.2026, Fatima Charitable Trust vs. CIT(E) dated 08.12.2025 and Mata Chameladevi Educational and Charitable Trust vs. CIT(E) dated 06.06.2025, the respective benches of Tribunal has taken a view that, if the delay was caused due to unintentional mistake and there was no deliberate or intentional act of the assessee proved to be delaying the filing of prescribed forms, than in the interest of natural justice, the delay should be Shree Surat Jain Panchayat Fund condoned. Further, we take support from the settled principle of law as held by Hon’ble Apex Court in the case of Jaiswal Vidya Shankar vs. ITO (SLP Nos. 26310 & 26311 of 2024, that while dealing with the issue of condonation of delay the authorities ought to adopt a justice-oriented and liberal approach.

In terms of aforesaid observations in the facts and circumstances of the present case, we are of the considered view that the delay in filing of Form 10AB in the present matter was due to unintentional reasons so deserves to be condoned and the application of assessee to be decided on merits, we thus condoned the delay in filing of Form 10AB by restoring the matter back to the file of ld. CIT(E) for fresh adjudication.

Needless to say, reasonable opportunity of being heard shall be provided to the assessee in the set-aside proceedings.

In result, the appeal of assessee stands allowed, in our aforesaid observations.