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Facts
The assessee trust, Shree Maruti Seva Foundation, holding provisional approval under section 80G(5), filed an application in Form No. 10AB for regular approval beyond the prescribed time limits. The CIT(Exemptions) rejected the application and cancelled the provisional approval solely on grounds of delay, stating a lack of power to condone it, without examining the trust's objects or activities on merits.
Held
The Tribunal condoned the delay in filing Form No. 10AB, finding it to be a bona fide mistake by a newly constituted trust. It noted that the CIT(Exemptions) had not doubted the charitable nature of the trust's activities and that similar delays had been condoned in previous judgments. The Tribunal set aside the CIT(Exemptions)'s order and remanded the matter for de-novo consideration on merits.
Key Issues
Whether the CIT(Exemptions) has the power to condone delay in filing Form No. 10AB for regular 80G registration, and if not, whether the Tribunal can condone such a procedural delay and remand the matter for consideration on merits.
Sections Cited
Section 80G(5), Section 119, Section 12A, Section 12AB
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabd vide order dated 29.09.2025 passed for A.Y. 2024- 25.
The assessee has taken the following grounds of appeal:
“1. The Commissioner of Income Tax (Exemption), Ahmedabad, has erred on facts and in law in rejecting application for registration u/s.80G(5) of Income Tax Act, 1961 being appellant was delay in filing application for registration u/s. 80G(5) of Income Tax Act, 1961.
The Commissioner of Income Tax (Exemption), Ahmedabad, has erred on facts and in law by not considering application on merits.
The Commissioner of Income Tax (Exemption), Ahmedabad, has erred on facts and in law in canceling registration u/s.80G(5) of Income Tax act, 1961.
.”
3. The brief facts of the case are that the assessee trust, namely Shree Maruti Seva Foundation, had been granted provisional approval under section 80G(5) of the Income-tax Act, 1961 vide Form No. 10AC dated 12.05.2022, effective from Assessment Year 2023-24. Thereafter, the assessee filed an application in Form No. 10AB on 31.01.2025 seeking regular approval under section 80G(5)(iii) of the Act.
The learned Commissioner of Income-tax (Exemptions), Ahmedabad examined the application with reference to the provisions of section 80G(5), the first and second provisos thereto, and Rule 11AA of the Income-tax Rules, 1962. The CIT(Exemptions) observed that the Statute prescribes specific and mandatory time limits for filing an application in Form No. 10AB for conversion of provisional approval into regular approval. On the facts of the case, CIT(Exemptions) noted that the assessee had commenced its activities in October 2023, whereas the application in Form No. 10AB was filed on 31.01.2025, which was beyond the time prescribed under the Act as well as beyond the extended due date provided by CBDT Circular No. 7/2024 dated 25.04.2024.
The assessee submitted before CIT(Exemptions) that the delay by filing an affidavit stating that there was a bona fide mistake and misinterpretation of the due date, as the trustees believed that the time limit was co-terminus with the validity of provisional approval. However, the CIT(Exemptions) held that the time limits prescribed under section 80G(5)
Shree Maruti Seva Foundation vs. CIT(E) Asst. Year –2024-25 - 3– of the Act are mandatory in nature and that the Commissioner has no power to condone the delay in filing Form No. 10AB, such power being vested only with the CBDT under section 119 of the Act.
The CIT(Exemptions) specifically recorded that:
“the time limit prescribed under Income Tax Act, 1961 is/are mandatory and the Commissioner of Income Tax has no power to condone the delay in filing application in Form No. 10AB. Such powers rest with CBDT only.”
On this reasoning, and without examining the objects of the trust or the genuineness of its activities, the CIT(Exemptions) rejected the application in Form No. 10AB as non-maintainable on account of delay and also cancelled the provisional approval earlier granted under Form No. 10AC.
The assessee is in appeal before us against the order passed by the CIT(Exemptions) dismissing the application of the assessee.
Before us, the Counsel for the assessee submitted that the learned CIT(Exemptions) has not rejected the application on the basis of the objects of the assessee trust, nor has he doubted the genuineness of the activities of the assessee trust. It was submitted that the denial of benefit under section 80G of the Act by CIT(Exemptions) was solely on account of delay in filing the application in Form No. 10AB. The Counsel further submitted that the assessee trust is a newly constituted trust, the activities are at a nascent stage, and that on identical facts the assessee has already been granted registration under section 12A/12AB of the Act. It was Shree Maruti Seva Foundation vs. CIT(E) Asst. Year –2024-25 - 4– contended that the delay occurred due to a bona fide and inadvertent mistake in understanding the statutory timelines and there was no malafide intention. Relying upon several decisions of the Tribunal, it was submitted that such procedural delay deserves to be condoned in the interest of justice and the CIT(Exemptions) should be directed to decide the application on merits.
In response, the learned Departmental Representative placed reliance on the observations made by the CIT(Exemptions) in the impugned order and submitted that the Commissioner has rightly held that he does not possess the power to condone the delay in filing Form No. 10AB. The learned DR submitted that the CIT(Exemptions) has correctly followed the statutory provisions and the CBDT circulars and has reproduced in the order that the time limits under section 80G(5) of the Act are mandatory and condonation, if any, lies only with the CBDT.
We have heard the rival submissions and perused the material available on record. We find that the rejection of the assessee’s application under section 80G(5) of the Act by the CIT(Exemptions) is not on account of any defect in the objects of the trust or lack of genuineness of its activities, but solely on the ground of delay in filing the application in Form No. 10AB. It is also an admitted position that on an identical set of facts, the assessee trust has been granted registration under section 12A/12AB of the Act, and the CIT(Exemptions) has not doubted the charitable nature of the assessee’s objects.
Shree Maruti Seva Foundation vs. CIT(E) Asst. Year –2024-25 - 5– 12. We note that the Tribunal, in several decisions, has taken a consistent view that procedural delays in filing applications for approval under section 80G, particularly in cases involving newly constituted trusts and bona fide mistakes, deserve a liberal approach. In N J Charitable Foundation vs. Commissioner of Income-tax (Exemption) [2024] 161 taxmann.com 21 (Surat-Trib.), the Tribunal held that delay in filing application under section 80G(5) of the Act is to be condoned where the assessee acted under a bona fide belief and directed the Commissioner (Exemptions) to reconsider the application on merits. Similarly, in Peoples Progress Trust vs. Commissioner of Income-tax (Exemptions) [2025] 177 taxmann.com 150 (Hyderabad-Trib.), it was held that though the Commissioner may not have the power to condone delay, the assessee should be afforded an opportunity and the matter should be examined on merits after appropriate condonation through the proper channel. Further, in Shree Fofaria Family Charitable Trust vs. Commissioner of Income-tax (Exemption) [2025] 178 taxmann.com 362 (Ahmedabad- Trib.), it was held that rejection of an application under section 80G of the Act on technical or procedural grounds, without examination on merits and without affording proper opportunity, violates the principles of natural justice and the matter was remanded for fresh consideration.
In the light of the above judicial precedents and considering the fact that the assessee trust is newly formed, that the delay was explained as a bona fide mistake, and that there is no adverse finding on the objects or activities of the trust, we are of the considered view that the delay in filing
Accordingly, we set aside the impugned order passed by the CIT(Exemptions) and restore the matter to his file for de-novo consideration. The delay in filing the application in Form No. 10AB is condoned, and the learned CIT(Exemptions) is directed to examine the assessee’s application under section 80G on merits in accordance with law, after affording a reasonable opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 18/02/2026