Case Law Details
Janjagruti Shishan Sanstha Deqalgaon Vs CIT (Exemption) (ITAT Nagpur)
The Income Tax Appellate Tribunal (ITAT), Nagpur, considered appeals against the orders of the Commissioner of Income Tax (Exemption) dated 11.07.2025 rejecting applications for regular approval under Sections 12A(1)(ac)(ii) and 80G(5) of the Income-tax Act. The Tribunal first condoned an eight-day delay in filing one of the appeals, noting that the delay was not substantial.
The Tribunal found that the applications had been rejected because the assessee had incorrectly mentioned the relevant statutory provision while seeking registration under Sections 12A(1)(ac) and 80G. It held that quasi-judicial authorities are expected to decide matters on merits and that merely referring to an incorrect provision in an application cannot be a valid ground for rejection.
According to the Tribunal, provisions governing applications for provisional or permanent registration under Sections 12AB and 80G are procedural in nature. Unless the statute expressly prohibits rectification or condonation, mistakes, delays, or other technical irregularities arising in the ordinary course should be treated as technical non-compliance. The Tribunal observed that prescribed authorities should exercise discretion by allowing applicants to correct such defects or explain delays. It relied on decisions of the Mumbai Benches in Rashtra Tej Manch, Mohanji Bharat Welfare Foundation, and Anybody Can Help Foundation.
The Tribunal also noted that, following the Finance (No. 2) Bill, 2024, prescribed authorities have been empowered to condone delays in filing applications under Section 12AB where reasonable cause exists. It further relied on the Supreme Court’s decision in Commissioner of Customs (Import) Mumbai vs. Dilip Kumar & Co. and the Gujarat High Court’s decision in CIT vs. Gujarat Oil & Allied Industries, both recognizing the principle of substantial compliance for procedural requirements.
Rejecting the Revenue’s contention that the assessee should file fresh applications, the Tribunal held that where principles of natural justice are not followed and rejection is based only on technical reasons, the applicant should instead be given an opportunity to rectify the defects. The appeals were allowed for statistical purposes, and the matters were remanded to the prescribed authority for fresh consideration on merits after permitting rectification.
FULL TEXT OF THE ORDER OF ITAT NAGPUR
These appeals filed by the assessee are directed against the order of Ld. Commissioner of Income Tax (Exemption) (for short, “CIT(E)”), both dated 11/07/2025 whereby applications for regular approval under Section 12A(1)(ac)(ii) & 80G(5) respectively of the Act have been rejected.
2. On hearing both the sides, we find that there is a delay of 8 days in filing the appeal in ITA 560/NAG/2025. An application for condonation of delay has been filed and considering the delay is not of substantial period. The same is condoned and the appeal is admitted for hearing.
3. On hearing both the sides, we find that the impugned order has been passed by Ld. Prescribed Authority observing that there was error in mentioning the provision of law under which the application was filed seeking registration under Section 12A(1)(ac) of Section 80G of the Act.
4. We are of the considered view that quasi–judicial authorities are supposed to decide the issues on merits and merely reference to a wrong provision in an application seeking relief under statute cannot be basis to dismiss an application.
5. We are of considered view that the provisions requiring filing of applications seeking provisional or permanent registration under Section 12AB of Section 80G of the Act are procedural part of the Act and unless there is statutory bar that the mistake cannot be rectified, the delay cannot be condoned, any mistake or delay in filing of the application or any other irregularity which can arise out of ordinary course of business, should be considered to be technical non– compliance and as quasi–judicial authorities, Ld. Prescribed Authorities should exercise discretion calling upon applicant to correct the mistakes or to explain the reasons for delay. Such provisions require liberal interpretation being technical in nature and reliance in this regard can be placed on the decision of Mumbai Benches in following cases;–
> Rashtra Tej Manch v. CIT(E), Mumbai in ITA No. 6957/Mum/2025 dated 11/03/2026
> Mohanji Bharat Welfare Foundation v. CIT(E), Mumbai in ITA No. 2617/MUM/2025 dated 14/10/2025
> Anybody Can Help Foundation vs. ITO (Exemption) in ITA No. 7245/MUM/2025 dated 06/01/2026
6. In fact the law as now stands after Finance (No.2) Bill, 2024, powers have been given to Ld. Prescribed Authority to condone the delay in filing applications under Sections 12AB and treat such applications as timely filed, provided there is a reasonable cause for the delay.
7. In this context, we also rely decision of Hon’ble Supreme Court in Commissioner of Customs (Import) Mumbai vs. M/s. Dilip Kumar & Co. AIR 2018 SC 3606 wherein doctrine of substantial compliance has been recognized by Hon’ble Supreme Court and we are of considered view that in situations like the present, the assessee deserves to be given the benefit of the principle as laid down. As for convenient reference, the relevant part of the said decision is reproduced below ;–
“32. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably be expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the “essence” or the “substance” of the requirements. Like the concept of “reasonableness”, the acceptance or otherwise of a plea of “substantial compliance” depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleased if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance.
Substantial compliance means “actual compliance in respect to the substance essential to every reasonable objective of the statute” and the Court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed”.
8. We find that the principle of substantial compliance of procedural provisions has been recognized by Hon’ble Gujarat High Court in case of CIT vs. Gujarat Oil & Allied Industries reported in 201 ITR 325 and the relevant extract of the judgment is reproduced as under:–
“In our view, the aforesaid reasoning of the Allahabad High Court and the Patna High Court would squarely apply to the facts of the present case. The provision about furnishing of the auditors’ report along with the return has to be treated as a procedural provision, directory in nature, and its substantial compliance should suffice, meaning thereby that such report should be made available by the assessee to the Assessing Officer latest when the question of framing of assessment is taken up by the Income-tax Officer and when he applies his mind to the claim of the assessee and if by that time, the assessee has put his house in order and has furnished the report of the auditor for supporting the return, he can be said to have satisfied the requirement of section 80J(6A) of the Act.”
9. Though Ld. DR submits that the assessee can file application afresh, however, we are of the considered view that when Principles of Natural Justice are not followed and the rejection of an application is merely for technical reasons, assessee should be given opportunity to rectify the mistake instead to leave for a remedy of filing an application afresh and seeking condonation thereby.
10. In the light of aforesaid, appeals are allowed and the issues on merits are restored to the files of Ld. Prescribed Authority for giving an opportunity to the assessee to file rectified application and thereafter decide the applications on merits.
11. In the result, the appeals of the assessee are allowed for statistical purposes.
Order pronounced in open Court on 16.06.2026
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