Loading judgment…
Facts
The assessee, a trust, filed applications for regular registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5)(iii) after receiving provisional registrations. The CIT(E) rejected these applications, citing delays based on the commencement of activities (1999) and an extended CBDT deadline of June 30, 2024. The assessee contended that their applications were timely, having been filed within three months of obtaining provisional registrations.
Held
The Tribunal observed that the time limit related to the commencement of activities had long expired. It found that the assessee's applications for regular registration and approval were made within three months of the provisional registrations (October 2024), making them timely in that context. Therefore, the Tribunal directed the CIT(E) to condone any delay and re-examine the applications on merits for fulfilling the conditions for grant of registration/approval.
Key Issues
Whether the CIT(E) was justified in rejecting applications for regular registration/approval under sections 12A(1)(ac)(iii) and 80G(5)(iii) on grounds of delay, particularly after provisional registration was granted.
Sections Cited
12A(1)(ac)(iii), 12A(1)(ac)(vi), 80G(5)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
These two appeals are filed by the assessee against the order dated 29.09.2025 and 25.09.2025 passed by the Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as ‘CIT(E)’] in respect of denial of approval u/s. 12A(1)(ac)(iii) and u/s. 80G(5)(iii) of the Act, respectively. We will first take up the appeal in ITA No. 2293/Ahd/2025.
The brief facts of the case are that the assessee had filed an application in Form No. 10AB on 20.01.2025 for registration u/s. & 2294/Ahd/2025 Shree Higlaj Education Trust Vs. CIT(E), AY-NA 2 12A(1)(ac)(iii) of the Act. The assessee was earlier allowed provisional registration u/s. 12A(1)(ac)(vi) of the Act on 22.10.2024. The Ld. CIT(E) noticed that where the trust was provisionally registered, the application for regular registration was required to be filed within a period of six months of commencement of its activities or at least six months prior to the expiry of provisional registration, whichever was earlier. The assessee trust had commenced its activities on 20.04.1999 and therefore, the application for regular registration u/s. 12A(1)(ac)(iii) was required to be filed within six months of commencement of business, which was periodically extended by CBDT till 30.06.2024. The Ld. CIT(E) has also observed that the assessee did not submit any reply to the show cause notice regarding delay in filing of the present application. He, therefore, rejected the application of the assessee.
Now the assessee is second appeal before us. The following grounds have been taken in this appeal:
1. The order passed by U/s. 12A on 29.09.2025 by CIT(Exem), Ahmedabad rejecting the application for registration of the appellant trust u/s 12A(1)(ac) (iii) of the Act and cancelling the provisional approval by holding that the appellant has not been filed form 10AB within the prescribed time as extended is wholly illegal, unlawful and against the principles of natural justice.
2. The ld. CIT(Exem) ought to have appreciated that the appellant trust was not allowed sufficient time to respond to the show cause notice dtd. 16.09.2025, so that there was gross violation of principles of natural justice. The appellant trust had sufficient cause for failure to respond to the said notice. 2.1 The Id. CIT(Exem), has grievously erred in law and or on facts in not appreciating that the appellant trust was under a genuine and bona fide belief on account of the advice of part time accountant that the application u/s 12A(1)(ac) (iii) could be made within six months from the expiry of the date of provisional registration of the new scheme which & 2294/Ahd/2025 Shree Higlaj Education Trust Vs. CIT(E), AY-NA 3 was accordingly made on 20.01.2025. Thus, there was a sufficient cause for failure to file the said application before 30.06.2024 and the same should have been condoned. 2.2 That the in the facts and circumstances of the Id. CIT(Exem), ought not to have rejected the application for registration u/s 12A and cancelled the provisional registration granted under the new scheme. 3.1 The Id. CIT(Exem), has grievously erred in law and or on facts in construing the period of commencement of activities for the purpose of sec. 12A(1)(ac)(iii) and holding that the period of commencement of activities was 20.04.1999 and thereby rejecting the registration of the appellant trust u/s 12A of the Act and cancelling the provisional approval. 4.1 That the in the facts and circumstances of the Id. CIT(Exem), ought not to have appreciate that there was substantial compliance to the said provision in as much as, the filing of application after provisional registration was procedural in nature and not substantive one. It is, therefore, prayed that the rejection of the application for registration u/s 12A(1)(ac)(iii) and cancellation of the provisional approval by the CIT(Exem), may kindly be deleted.
Shri S N Divetia, the Ld. AR of the assessee submitted that since the business of the assessee was commenced on 20.04.1999 the application could not have been filed within six months of commencement of business as that time limit had expired long back. He explained that the provisional approval was granted to the assessee on 22.10.2024 which was valid for A.Ys. 2025-26 to 2027-28 and thus the application filed by the assessee on 20.01.2025 was much prior to the expiry of six months period from the end of provisional registration. He submitted that the assessee had filed the application for regular registration within a period of three months from the grant of provisional registration and thus there was no delay in filing of the application. He, therefore, submitted that the Ld. CIT(E) was not correct in rejecting the application on the ground of delay. the busi & 2294/Ahd/2025 Shree Higlaj Education Trust Vs. CIT(E), AY-NA 4 5. Per contra, Shri Rignesh Das, the Ld. CIT-DR supported the order of the Ld. CIT(E). He submitted that the assessee did not comply to the show cause notice issued by the Ld. CIT(E) and the matter was not properly explained before him.
We have considered the rival submissions. The assessee is an old Trust and it had commenced its activities on 20.04.1999. It was granted provisional approval u/s. 12A(1)(ac)(vi) of the Act on 22.10.2024 for the A.Ys. 2025-26 to A.Y. 2027-28. Thereafter, it had filed application in Form 10AB for regular registration u/s. 12A(1)(ac)(iii) of the Act. The contention of the Ld. CIT(E) was that the application for the regular registration was required to be made within six months from the commencement of activities or at least six months prior to the expiry of provisional registration, whichever was earlier, and this condition was not fulfilled in the present case. According to the Ld. CIT(E), the first time limit of application within six months of commencement of activities was periodically extended by the CBDT and the last extended date was till 30th June, 2024. The assessee did not make the application within this extended period and the show cause notice issued by the Ld. CIT(E) in respect of delay in application, was also not responded. Prima facie, we do not find any merit in the objection as raised by the Ld. CIT(E). The provisional registration was allowed to the assessee on 22.10.2024 and the assessee had made the application for regular registration within a period of three months from the said date. Considering this fact, the application of the assessee could not have been held as delayed application. The time period of six months from commencement of business had expired long back in the year 1999 itself. Therefore, the Ld. & 2294/Ahd/2025 Shree Higlaj Education Trust Vs. CIT(E), AY-NA 5 CIT(E) should have considered whether the present application was filed within due date vis-à-vis the provisional approval. Even if there was a delay in filing the application vis-a-vis the extension of time by the CBDT till 30.06.2024, the provision of Act has now been amended and the CIT(E) has now power to condone the delay in filing of application for registration u/s 12A(1)(ac)(vi) of the Act. Once the provisional registration was allowed by the Ld. CIT(E), he was not correct in rejecting the regular application on the ground of delay particularly when the application for regular registration was made within a period of three months from grant of provisional registration. We, therefore, deem it proper to set aside the matter to the file of Ld. CIT(E) with a direction to condone the delay, if any, in filing of application by the assessee and thereafter allow regular registration u/s. 12A(1)(ac)(iii) of the Act to the assessee, after examining the fulfilment of conditions for grant of such registration.
In the result, the appeal of the assessee is allowed for statistical purpose.
This appeal pertains to grant of approval u/s. 80G(5)(iii) of the Act. In this case also provisional approval was given on 23.10.2024 and the assessee had filed application for regular approval on 25.01.2025, which was rejected on the ground of delay. Thus, the facts of this case are identical to and the decision taken in that case is applicable mutatis mutandis to this appeal as well. Accordingly, the matter of grant of approval u/s. 80G(5)(iii) of the Act, is set aside to the Ld. CIT(E) with a direction to condone the delay in the application of the assessee & 2294/Ahd/2025 Shree Higlaj Education Trust Vs. CIT(E), AY-NA and thereafter allow the regular approval after examining the fulfilment of the conditions in that respect.
In the result, both the appeals of the assessee are allowed for statistical purpose.
Order pronounced in the Court on 19/02/2026 at Ahmedabad.
Sd-/ Sd/- (SIDDHARTHA NAUTIYAL) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 19th February, 2026 Neelesh True Copy आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file.