Shakyasimha Foundation vs Commissioner Of Income Tax (Exemption), Delhi

PER MANISH AGARWAL, AM :

The captioned appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Exemption), Delhi [“Ld. CIT(E)”] dated 11.09.2025 rejecting the approval/registration sought u/s 12AB(1)(b)(ii)(b) of the Income Tax Act, 1961 (“the Act”).

From the perusal of the order, it is seen that the assessee has not filed Form 10AB for granting registration u/s 12AB(1)(b)(ii)(B) within prescribed time and, further failed to filed the requisite details as sought for time to time and thus, the Ld. CIT(E) was the opinion that the assessee has failed to substantiate the genuineness of its activity and has denied the registration u/s 12AB of the Act.

Before us assessee has taken additional ground of appeal, wherein the assessee has raised the issue of rejection of the registration u/s 12AB for the reason that the application was filed delayed. The ld. AR submits that the issue being purely legal in nature and born out from the order of ld. CIT(E) and does not require any verification of facts and therefore the same admitted for adjudication. In support reliance is placed on the judgement of Hon’ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383 (SC).

Per contra, ld. CIT DR has not objected to the admission of the additional ground of appeal.

After hearing both the parties, from the perusal of the records, it is observed that ld. CIT(E) has rejected the application filed by the assessee as it was filed on 26.03.2025 as against upto 30.09.2024 i.e. atleast six months prior to the expiry of existing registration which in the instant case was going to expire on 31.3.2025. Since this issue is borne out from the order of ld. CIT(E) and requires no verification thus, the additional ground of appeal taken by the assessee is admitted for adjudication.

Before us, the Ld. AR of the assessee submits that the Appellant society had absolutely no knowledge or awareness of the technical requirements or the due dates prescribed under the Act and thus it is a bonafide ignorance on the part of the assessee. Further the Appellant reposed complete trust and confidence in the professional appointed to look after the accounts, compliance, and statutory filings of the institution and thus for failing the strict legal compliance, should be liberally considered. The assessee was under the bonafide belief that the application could be filed even after the expiry date. Owing to such lack of awareness and understanding of the amended provisions, the application could not be filed within the prescribed time. It is thus requested that the delay in filing the application has occurred due to bonafide and reasonable circumstances, and the Appellant ought not to be penalized for the inadvertent lapse. It is further submitted that the assessee though was not able to file the details like donors, bills and vouchers for expenses, sources of funds to establish the genuineness of the activities undertaken vis-a-vis charitable nature of the objects of the society before the Ld. CIT(E), however, it is requested that assessee may be granted one more opportunity to represent its case before the Ld. CIT(E) to file the documentary evidences as required by Ld. CIT(E).

In reply, the Ld. CIT-DR supported the orders of Ld. CIT(E) and requested for the confirmation of the same.

We have heard both parties at length and perused the material available on record. Admittedly, the assessee society was granted provisional registration and had filed "Form 10AB" for regular registration. The CBDT, vide Circular No. 7/2024 dated 25.04.2024, had extended the "due date" for filing such application till 30.06.2024, however in the instant case the due date was 30.09.2024 and the assessee society has filed the application on 26.03.2025, therefore, there can be no denying the fact that the application filed by the assessee society was beyond the prescribed time limit. However, apart from the delay, it is observed that the ld. CIT(E) has observed that assessee has filed to file the details like donors, bills and vouchers for expenses, sources of funds to establish the genuineness of its activities and charitable nature of the objects of the society. Also, its bonafides are not in dispute, and the delay in filing the application, in our considered view, prima facie, does not appear to be deliberate.

On identical issue of delay, the Co-ordinate bench of ITAT, Mumbai in the case of Narke Green Foundation Charitable Institution in ITA no.1864/Mum/2025 made following observations:

We find that the legislature in all its wisdom had vide the Finance Act, 2024 from 01.10.2024 made available on the statute a "Proviso" to Section 12A(1)(ac) that formally allows the ld. CIT(E) to condone the delay if reasonable cause is shown. As in the instant case, ld. CIT(E) has not exercised his power in condoning the delay therefore, in our considered opinion, matter deserves to be restored to the file of the ld. CIT (E) for fresh consideration. The assessee society shall remain at liberty to file an application for the condonation of the delay involved in the filing of the present application in "Form 10AB" seeking regular registration under section 12AB of the Act. The ld. CIT(E) shall consider such application in accordance with the law and dispose of the same after granting a reasonable opportunity of being heard to the assessee society. The Assesses society is also directed to file all the relevant details as called for before the Ld. CIT(E) in order to establish the genuineness of its activity. With these directions, all the grounds of appeal including the additional ground of appeal raised by the assessee are allowed for statistical purposes.

In the result, appeal filed by the Assessee is allowed for statistical purposes.