Delay in Form 10AB Condoned; Rejection of 12AB Registration & 80G Approval Set Aside

Rotary Club of Mumbai Sobo Charitable Trust Vs CIT(Exemptions) (ITAT Mumbai)

Delay in Form 10AB Condoned; Rejection of 12AB Registration & 80G Approval Set Aside

The Mumbai ITAT (D Bench) allowed the appeals of Rotary Club of Mumbai SOBO Charitable Trust and set aside the orders of the CIT(Exemptions) rejecting regular registration under section 12AB and approval under section 80G, directing fresh adjudication on merits.

The Tribunal held that:

• The assessee was already granted provisional registration under section 12A in Form 10AC, valid up to AY 2024-25, and had filed Form 10AB on 04.11.2024, i.e., before expiry of the provisional registration.
• The delay of about 400 days in filing Form 10AB was supported by a bona fide and reasonable explanation, arising from transitional confusion under the new registration regime and CBDT circulars extending/clarifying timelines; a pragmatic and facilitative approach was warranted.
• Timelines in section 12A(1)(ac)(iii) cannot be applied mechanically, especially where CBDT circulars acknowledge genuine hardship and provide relaxations.
• The objection that the trust deed permitted application of funds outside India was curable; the assessee had initiated amendment proceedings before the Charity Commissioner and gave an unequivocal undertaking that no such activities were undertaken or proposed.
• At the registration stage, the enquiry is limited to objects and genuineness of activities; denial without allowing the assessee to place the amended trust deed on record violated principles of natural justice.
• Rejection of section 80G approval being consequential to denial of 12AB registration could not stand independently.

Outcome: