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Facts
The assessee trust filed an application for registration in Form 10AB, which was rejected by the CIT(E) for being belatedly filed. The delay in filing was attributed to inadvertent misplacement of the rejection order, and the assessee sought condonation. The assessee had a provisional registration and applied for permanent registration within the extended time period as per a CBDT circular.
Held
The Tribunal noted that the charitable activities of the trust were not doubted and that the show cause notice for rejection was not properly served, providing insufficient time for a reply. The Tribunal also considered a High Court judgment stating that minor delay should not be a ground for rejection and a CBDT circular extending the filing deadline. It was also observed that the application for final registration u/s 80G(5) was filed within the prescribed time after provisional approval.
Key Issues
Whether the rejection of the application for registration solely on the ground of belated filing, despite a CBDT circular extending the time limit and judicial pronouncements against such rejections for minor delays, is justified.
Sections Cited
12A(1)(ac)(iii), 12AB, 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH: AMRITSAR.
Before: MEMBER & SH. UDAYAN DAS GUPTA
Appellant by Sh. Ashwani Kumar CA. Respondent by Dr. Vedanshu Tripathi, CIT. DR Date of Hearing 27.03.2025 Date of Pronouncement 21.04.2025 ORDER Per: Udayan Das Gupta, J.M.:
This appeal is filed by the assessee against the order of CIT(E), Chandigarh, rejecting the application seeking registration filed in Form 10AB , u/s 12A(1) (ac)(iii) of the Act 61, vide order dated 19/04/2024. Condonation of delay: 2. It is pointed out by the registry that this appeal is filed by the assessee belatedly by 51 ( fifty one ) days . The assessee has filed an application praying for condonation of delay along with an affidavit sworn by the president of the assessee trust Smt. Anuradha Rishi , stating the fact that the rejection order from the office of the Ld CIT ( E ) has been received by her but the same was inadvertently & 431/Asr/2024 Assessment Year.: 2024-25 2 misplaced in her office along with other papers of the trust resulting in inadvertent delay in handing over the of the same to Sri Achintya Rishi , the person concerned with the handling of accounts and tax matters of the trust and the delay was un intentional and prayed the same may please be condoned and the appeal may be admitted to be heard on merits. The Ld DR has no objection. Considering the facts stated in the affidavit we hold the delay as not intentional and the same is condoned and appeal is admitted to be heard on merits.
3. The grounds taken by the assessee in form 36 are as follows:
“1 That the order of the Learned Commissioner of Income Tax (Exemptions), Chandigarh is bad in law and against facts and circumstances of the case.
2 That order u/s 12AB of the Income-tax Act, 1961 is against law and facts on the file in as much as the rejection of application for approval is without any valid reason and is on the basis of wrong interpretation of law.
3 The assesses Craves leave to add, amend or delete any of the ground (s) of appeal before it is finally heard.”
The brief facts emerging from record are that the assessee trust was originally registered u/s 12AA of the Act 61 vide order dated 28th December, 2015 of CIT ( E ) , Chandigarh. Thereafter, the assessee was provisionally registered u/s 12A(1)(ac)(vi) vide order dated 31st March, 2023, valid from AY 2023-24 to AY 2025-26 , and the order for provisional approval u/s 80G(5)(iv)(A) was dated 19th October, 2023 , valid from AY 2024 – 25 to AY 2026-27 .
& 431/Asr/2024 Assessment Year.: 2024-25 3 4.1 Thereafter, the assessee trust applied for registration u/s 12A(1)(ac)(iii) in Form 10AB ( Rule 17A /AA /2C ) on 12th October, 2023 and applied for approval u/s 80G(5) in Form 10AB [ Rule 17A /AA /2C] on 20th October, 2023 along with necessary particulars . 4.2 During verification of particulars various queries raised by the Ld CIT ( E ) vide notice dated 31/01/2024, were responded by the assessee trust in on line portal , dated 29/03/2024, along with copies of audited accounts, audit report, details of charitable activities carried out by the trust along with documentary evidences, supported by news paper cuttings and photographs, copies of bank statements highlighting such expenses, copy of trust deed dated 6th May, 2014, registered before Sub – registrar, Jammu and other necessary particulars . Subsequently, vide notice dated 8th April, 2024, the Ld CIT ( E ) raised 4.3 issues relating to belated filing of the application for registration in form 10AB ( as under ): “2. In this regard, your kind attention is invited to the provision of sub clause (iii) of clause (ac) of sub section (1) of section 12A of the Act which stipulates as under: “where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional reaistration or within six months of commencement of its activities, whichever is earlier;”
However, the CBDT on multiple occasions had extended the time limit in filing the application in Form No. 10A and/or 10AB upto 30.09.2023. In this respect, from the details/documents filed by you, it is observed that the society has commenced its activities on & 431/Asr/2024 Assessment Year.: 2024-25 4
02.06.2014. Accordingly, you have not filed the present application under sub clause (iii) of clause (ac) of sub section (1) of section 12A, within the due date mentioned in the sub clause (iii) of clause (ac) of sub section (1) of section 12A of the Act. In view of the above, you are hereby requested to explain as to why the present application filed in sub clause (iii) of clause (ac) of sub section (1) of section 12A in form No. 10AB should not be treated as not filed within due date specified in the Act and be rejected as non-maintainable.
Your response should be submitted on or before 12.04.2024, Further, this may be treated as final opportunity in this regard and no further requests for adjournments will be entertained.”
4.4 In the instant case since the application for permanent registration in Form 10AB has been submitted on 12th October, 2023, (the last date of which, according to the Ld CIT ( E ) has expired on 30th September, 2023 ) the said delay cannot be condoned and hence this application was rejected . 4.5 However, in absence of any response from the assessee to the last show cause notice for rejection dated 8th April, 2024, the application of the assessee trust u/s 12A(1) (ac)(iii) of the Act has been rejected , being belatedly filed.
The Ld AR of the assessee submitted that the provisional registration in Form 10AC has been granted on 31st March, 2023 and is valid for the period AY 2023-24 to AY 2025-26 , and the application for permanent registration has been made on 12th October, 2023, which is within the extended time period prescribed under CBDT circular dated 25 /04/2024, no 7 / 2024 , which has extended the date of filing of application in Form 10AB till 30/06/2024.
& 431/Asr/2024 Assessment Year.: 2024-25 5
He further relied on a judgment of the Hon’ble jurisdictional High Court in 5.1 the case of Shri Anandpur Satsang Trust vs CIT ( Exemption ) Chandigarh , in CWP-10214-2023(O & M ) dated 31/05/2023, ( Punjab and Haryana ) , to submit that on identical facts , where there was delay of only one day in filing Form 10AB , the Hon’ble court has opined that delay of filing Form 10AB itself cannot be a ground to reject application of the petitioner, and. the court directed the competent authority to pass fresh order without taking into account the delay in filing Form 10AB.
The relevant portion is reproduced as under: “Short reply by way of the affidavit of the Commissioner of Income Tax (Exemptions) Chandigarh dated 23.05.2023 has been filed. The stand taken therein is that the petitioner was bound to make application for approval on or before 30.09.2022. The petitioner has 12 months to file Form 10AB and the petitioner has tiled Form 10AB on 01.10.2022. The Commissioner of Income Tax (Exemptions) Chandigarh has no power to condone the delay in filing Form 10AB.
In the present case, since the delay is only of one day in filing Form 10AB and this in itself cannot be made a ground to reject application I of the petitioner. Hence, the present petition is allowed and the order dated I 28.04.202.3 (Annexure P-14) is set aside and the matter is remanded back to the competent authority to pass fresh order without taking into account the delay in filing Form 10AB.”
Relying on the above decision and also referring to the CBDT circular dated 25 /04/2024, no 7 / 2024, the Ld. AR prays that the delay in filing form 10AB cannot be a ground for rejection when all other conditions are fulfilled and as per & 431/Asr/2024 Assessment Year.: 2024-25 6 the principles of law laid down by the High Court, minor delay should not be taken into account, and the application for registration should be allowed.
The Ld. DR, relied on the order of the CIT (E).
We have considered the materials on record and the submissions of the assessee and the Ld. DR , and we find that the charitable activity carried out by the trust has never been doubted by the competent authority and the last show cause notice issued by Ld. CIT ( E ) on 19/04/2024, in the ITBA portal , pertains to delayed filing of the application and the said notice was not issued on the email id provided for communication , and the assessee was called upon to submit reply within four days by 12th April, 2024 , which is not as per the standard SOP , and cannot be said that sufficient and adequate time has been allowed to the assessee for reply to the last notice, before rejecting the application . It seems no reply has been submitted by the assessee in absence of any notice being actually received, in the mail , leading to rejection of the application for registration.
9.1 Moreover, the CBDT vide circular dated 25/04/2024, no 7 / 2024, has extended the date of filing of application in Form 10AB till 30/06/2024.
9.2 Moreover, this aspect of the matter has already been examined and adjudicated upon by various coordinate benches of the Tribunal, in the following cases :
(a) Tomorows Foundation , ITAT, Kolkata Bench 160 taxmann.com174, (b) Bhamashah Sundarlal Daga Charitable Trust ITA 278/Jodhpur, ITAT Jodhpur Bench 158 taxmann.com 712, (c) Go Gram Eco Foundation , Jaipur Bench , order dated 28/11/2023, & 431/Asr/2024 Assessment Year.: 2024-25 7
(d) CIT – 1982 Charitable Trust , ITA No: 827/Chny / 2023 , ITAT , Chennai Bench, 160 taxmann.com475.
( e) Kolkata ITAT in the case of West Bengal Welfare Society , ITA No: 730 and 731 / Kol / 2023 , Asst Year 2023-24; 9.3 Moreover, regarding final registration u/s 80G(5) of the Act 61 , it has been consistently held that the assessee is eligible to apply for final registration only after grant of provisional approval, and in this case the provisional approval has been obtained on 19th october, 2023 which is valid till asst year 2026-27, and the assessee has applied for final approval on 20th October, 2023, which is six months prior to expiry of the period of provisional approval.
9.4 As such considering all aspects of the matter, we remand the matter back to the Ld. CIT (E), to consider the application of the assessee u/s 10AB for registration u/s 12A (1) (ac) (iii) of the Act, afresh, taking into account the law laid down by the Hon’ble jurisdictional high court in the case of Shri Anandpur Satsang Trust vs CIT (Exemption) Chandigarh, (supra), and also considering the extended time limit as per CBDT circular no 7/2024 dated 25/04/2024.
As such the appeal of the assessee is allowed for statistical purpose.
ITA No : 431 / ASR / 2024 This appeal is against the rejection of application dated 20th October, 2023, 11. in Form 10AB for final approval u/s 80G(5) of the Act 61. Our observation in ITA – 430 / ASR/ 2024, shall apply mutatis mutandis to this appeal. Since we have remanded the matter back to the Ld. CIT (E), in respect of the application u/s & 431/Asr/2024 Assessment Year.: 2024-25 8 12(A)(1) (ac)(iii), for fresh consideration, we also remand this matter back to the Ld. CIT (E) for fresh consideration as per procedure, from the date of application.
In the result, both the appeals of the assessee bearing & 431/Asr/2024 are allowed for statistical purposes.
Order pronounced on 21.04.2025 at Amritsar, Punjab in accordance with Rule 34(4) of the Income tax (Appellate Tribunal) Rules, 1963.