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Facts
The assessee-trust, already registered under Section 12A, applied for fresh registration under Section 12AB. The CIT(E) rejected the application due to a delay in filing Form-10AB, alleged violations in object clauses regarding utilizing funds outside India, and foreign travel expenses.
Held
The Tribunal found that the CIT(E)'s rejection based on the trust carrying out activities only after provisional registration was factually incorrect. The delay in filing was condoned due to lack of professional advice. The amended object clauses and foreign travel expenditure details warrant fresh examination.
Key Issues
Whether the delay in filing the application for registration under Section 12AB can be condoned and whether the grounds for rejection by the Ld. CIT(E) are valid.
Sections Cited
12AB, 12A, 12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, MUMBAI “C” BENCH : MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “C” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER International Copper Association CIT (Exemptions) India, Cumballa Hill, Unit No. 1401-03, Wing-A, vs. MTNL TE Building, Pedder Road, Kailas Business Park, Dr.Gopalrao Deshmukh Marg, Veer Sawarkar Road, Mumbai-400026. Parksite, Vikhroli West, Mumbai-400079. PAN : AAACI9045G (Appellant) (Respondent) For Assessee : Ms. Sonia Bhatia For Revenue : Shri R.A. Dhyani, CIT-DR Date of Hearing : 16-02-2026 Date of Pronouncement : 19-02-2026 O R D E R PER VIKRAM SINGH YADAV, A.M :
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Exemptions)-Mumbai [„Ld.CIT(E)‟], dated 28-09-2025, wherein the assessee‟s application seeking registration u/s. 12AB of the Income Tax Act, 1961 („the Act‟) has been rejected by the Ld.CIT(E).
During the course of hearing, the Ld.AR submitted that the assessee- trust has been carrying out its activities since October, 2001 and has been duly registered u/s. 12A of the Act and has been allowed exemption in the past. It was submitted that in terms of the new registration provisions, the assessee-trust has applied for provisional registration which was granted vide order dt. 06-04-2022 and which was valid upto AY. 2024-25 and thereafter, the assessee-trust moved an application u/s. 12A(1)(ac)(iii) of the Act on 21-01-2025, seeing registration u/s. 12AB of the Act and which has been rejected by the Ld.CIT(E), Mumbai on account of delay in filing Form-10AB as well as referring to certain object laws of the assessee-trust and certain foreign travel expenditure incurred and reimbursed to the assessee trust.
In this regard, it was submitted that the Ld.CIT(E) has held that the assessee trust should have applied for final registration by October, 2022 and there is a delay of more than 26 months. In this regard, it was submitted that the Ld.CIT(E) wrongly considered the fact that the assessee has been carrying out its activities only after obtaining the provisional registration in April, 2022 and accordingly he has worked out the limitation period for filing the application for seeking final registration. However, it is a case where the assessee has been carrying out its activities since October, 2001 and, therefore, within period of six months before expiry of provisional registration, the assessee trust was required to apply for final registration and the delay is only to an extent of 10 months. In this regard, it was submitted that the assessee-trust has engaged a tax consultant to handle its compliances relating to income tax matters. However, the consultant misinterpreted the time lines for filing for regularization of provisional registration, which has resulted in delay in filing of the application. It was submitted that the delay was caused solely due to incorrect professional advice, and was beyond the control of the assessee-trust and there was no malafide intention to delay compliance, and the assessee-trust has otherwise complied with all tax and regulatory obligations. It was accordingly submitted that the Ld.CIT(E) was not correct in not condoning the delay in filing of the application, seeking final registration and in this regard, reliance was placed on various Board Circulars, wherein the time has been extended from time to time.
Secondly, in terms of various object laws which are stated to be in violation of statutory provisions by the Ld.CIT(E), stating that these object clauses conveys its intention to utilize fund outside India, it was submitted that the assessee-trust has categorically stated that it has not applied its income outside India till date and neither intends to do so in the future and these clauses are merely enabling in nature and are not intended to permit the trust to carry out activities outside India in violation of the provisions of the Act and to remove ambiguity, the trust had also undertaken to suitably amend/clarify its objects to the effect that funds shall not be applied outside India except with prior approval of the competent authority. In this regard, it was further submitted that the assessee-trust has since moved an application before Ministry of Corporate Affairs for obtaining its approval to amend its Memorandum of Association to comply with the requirements of the Income Tax Act and the object clauses have since been amended and necessary approval has been obtained and which the assessee wishes to place on record by way of additional evidences.
Lastly, in respect of foreign travel expenditure and the objections raised by the Ld.CIT(E), it was submitted that the assessee has incurred certain foreign travel expenditure for its members for attending meetings and seminars abroad and the necessary details were submitted before the Ld.CIT(E). It was submitted that these expenses were initially borne by the assessee-trust and subsequently, reimbursed by its foreign member, International Cooper Association, New York and in this regard, necessary documentation were also submitted, which has not been properly appreciated by the Ld.CIT(E).
It was accordingly submitted that the delay in filing the application may be condoned and the matter may be set aside to the file of the Ld.CIT(E) to consider the amended Memorandum of Association as well as various documentation submitted by the assessee and to decide the matter relating to grant of final registration.
Per contra, the Ld. DR has been heard who has relied on the order passed by the ld CIT(E). At the same time, it was submitted that since the assessee has amended its object clauses, where the Bench so decide, the matter may be remanded to the file of the Ld.CIT(E) for necessary examination.
We have heard the rival contentions and perused the material available on record. We find that it is a case of an existing trust duly registered u/s 12A and which under the new registration regime was required and has initially sought provisional registration and thereafter, has applied for final registration u/s 12AB of the Act. The trust has been carrying out its activities since its incorporation as evident from its application and therefore, the findings of the Ld.CIT(E) that the trust has been carrying on its activities after obtaining provisional registration, is not factually correct and basis such incorrect appreciation of factual aspects of the matter, we find that the Ld.CIT(E) has dismissed the application, seeking final registration u/s 12AB as barred by limitation invoking the second limb of section 12A(1)(ac)(iii) of the Act. Given that it is a case of an existing trust carrying out its activities as evident from its application and not a case of new trust, the second limb of 12A(1)(ac)(iii) doesn‟t apply in the instant case. At the same time, in terms of first limb of section 12A(1)(ac)(iii) of the Act, there is admittedly delay in filing of application and the assessee has put forward its explanation and the reasonable cause in terms of lack of professional advice. In light of the same, we condone the delay in filing of the application and the delay is hereby condoned. In terms of certain object clauses which have been objected to Ld.CIT(E), the Ld.AR has submitted that the assessee has since amended its object clauses and amended object clauses as approved by the Competent authority has been submitted by way of additional evidence before us. The same being critical and germane to the issue under consideration are hereby admitted. Further, the matter relating to foreign travel expenses, it has been claimed that necessary documentation has been furnished by the assessee before the Ld.CIT(E) which have not been appreciated. In light of the same, we are of the considered opinion that the matter deserves to be examined in light of amended object clause and other documentation available on record. We accordingly set aside the matter to the file of the Ld.CIT(E) to consider the amended object clauses and other documentation available on record and to decide the assessee‟s application seeking final registration afresh as per law, after providing reasonable opportunity to the assessee-trust.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 19-02-2026.