Dahihandi Samavai Samitee Vs ITO Exemption (ITAT Mumbai)
Form 10AB Delay Due to Confusion Over Provisional Registration Validity Requires Fresh Consideration: ITAT
Background of the Case
The assessee, a charitable institution, challenged separate orders dated 26 March 2026, rejecting its application for regular registration under Section 12AB and its application for approval under Section 80G of the Income-tax Act, 1961.
The institution had applied for provisional registration in Form 10A on 1 November 2023. According to its grounds of appeal, provisional registration was granted through Form 10AC on 2 November 2023, valid from Assessment Year 2024-25 to Assessment Year 2026-27.
The institution subsequently filed Form 10AB on 27 September 2025, seeking conversion of its provisional registration into regular registration.
The dispute arose because the CIT(E) considered this application substantially delayed, whereas the institution maintained that it had acted under a bona fide understanding of the provisional registration’s validity.
CIT(E) Rejects Form 10AB as Delayed
The CIT(E) proceeded on the basis that the application for regularisation should have been filed within six months from commencement of charitable activities.
As recorded in the order, the CIT(E) treated the relevant deadline as falling in May 2024. Consequently, the Form 10AB filed on 27 September 2025 was considered delayed by more than 15 months.
The authority held that the institution had not satisfactorily explained the delay and had exhibited a casual approach towards statutory compliance. The application for regular registration was therefore rejected.
The application under Section 80G was also rejected, as a consequence of the rejection of registration under Section 12AB.
Assessee Explains Confusion Over the Deadline
Before the Tribunal, the authorised representative admitted the delay but explained that it was unintentional and attributable to confusion and professional advice.
The provisional registration certificate expressly showed validity up to AY 2026-27. The institution understood that its application for regular registration had to be submitted at least six months before the expiry of that validity.
Its tax consultant had also advised that the application could be filed by 30 September 2025. Acting on that advice, the institution filed Form 10AB on 27 September 2025.
The assessee contended that it would have filed earlier had it understood that an earlier deadline applied. It therefore requested consideration of the explanation as a bona fide reason for the delayed application.
Grounds Concerning Opportunity and Charitable Activities
The institution also challenged the rejection on the ground that it had not received a show-cause notice specifically proposing rejection for delayed filing.
It further submitted that the CIT(E) had not identified any defect in its objects or the genuineness of its activities. According to the assessee, the rejection rested solely on the filing timeline.
The Tribunal’s eventual relief centred on providing an opportunity to explain the delay and requiring fresh consideration by the CIT(E). It did not independently determine the institution’s eligibility for regular registration on its objects and activities.
Tribunal Recognises the Bona Fide Explanation
The Tribunal noted that the provisional registration certificate reflected validity up to AY 2026-27 and that the original application for provisional registration had been filed within time.
It considered the explanation that the delay in seeking final approval arose from the institution’s understanding of the certificate’s validity and the advice received from its consultant.
The Tribunal referred to the coordinate Bench’s decision in Narke Green Foundation Charitable Institution, ITA No. 1864/Mum/2025, concerning a similar issue of delayed filing.
That decision emphasised a flexible and pragmatic approach to procedural requirements, while requiring scrutiny of the genuineness of the explanation and the existence of sufficient cause.
Procedural Requirements Must Be Applied With Regard to Justice
The principles reproduced from Narke Green Foundation stressed that procedural law should facilitate the administration of justice.
At the same time, condonation requires a genuine and reasonable explanation. A liberal approach does not dispense with examination of the circumstances causing the delay.
Applying these principles, the Tribunal held that the institution should receive an opportunity to present its case before the CIT(E) and explain the reasons for delayed filing.
It directed that the condonation request be considered in accordance with law and with due regard to natural justice.
Section 12AB and Section 80G Applications Restored
The Tribunal restored the application under Section 12AB to the CIT(E) for de novo adjudication, including fresh examination of the delay.
Since rejection of the Section 80G application had followed from rejection of the Section 12AB application, that order was also set aside. The Section 80G matter was restored for a fresh decision.
Both appeals were allowed for statistical purposes.
Author’s Comments
The ruling provides an opportunity for substantive consideration where the filing delay was explained by reliance on the provisional certificate and professional advice.
The Tribunal did not itself conclusively condone the delay or grant registration under Section 12AB or approval under Section 80G. It required the CIT(E) to reconsider the explanation and decide the applications afresh.
Nor does the order establish that provisional validity automatically postpones every applicable filing deadline. Its significance lies in requiring a fair examination of the bona fide explanation before finally rejecting the institution’s applications.
Cases Discussed
- Narke Green Foundation Charitable Institution, ITA No. 1864/Mum/2025 (ITAT Mumbai) — pragmatic approach to procedural delays and bona fide explanation.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT MUMBAI
These appeals have been filed by the Assessee against the order dated 26th March, 2026, passed by the Learned Commissioner of Income tax (Exemptions), [“Ld. CIT (E)”] Mumbai, under Section 12A(1)(b)) and 80G of Income Tax Act, 1961 (“the Act”).
2. The Assessee has raised the following grounds of appeals in ITA No.6933/MUM/2026:
1. The Ld. CIT (E) has erred in passing order for rejection of the registration of the appellant without providing show cause notice on the said ground as to why the registration should not be rejected on ground of late filing of application (Form 10AB).
2. The Ld. CIT (E) has erred in rejecting the registration of the Appellant solely on the basis that appellant should have filed Form 10AB within six months from the date of commencement of activities while appellant had filed Form 10A on 01.11.2023 u/s 12A(1)(ac)(vi)(A) of I.T. Act, 1961 which states as under:—
(vi) in any other case, where activities of the trust or institution have—
(A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought;
And thereafter was granted provisional registration vide Form 10AC on 02.11.2023 which was valid from A.Y. 2024-25 to A.Y. 2026-27. Therefore appellant was under purview that provisional registration is valid till A.Y. 2026-27 & thereby it applied for final registration in Form 10AB u/s 12A(1)(ac)(iii) on 27.09.2025 considering application to be made at least 6 months prior to expiry of provisional registration.
3. Ld. CIT (E) has not found any defect in the objects or the genuineness of the trust’s activities, merely on the basis of the above timelines has erred in rejecting the registration of trust.
4. The Appellant craves leave to add, amend, alter, substitute and/or modify, withdraw in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of appeal.
The Assessee has raised the following grounds of appeals in ITA No.6939/MUM/2026:
1. The Ld. CIT (E) has erred in rejecting the application of the appellant for renewal of registration under section 80G of the Act on the grounds that since the registration under section 12AB of the Appellant stands rejected, therefore the registration under section 80G of the Act is also rejected.
2. The Appellant craves leave to add, amend, alter, substitute and/or modify, withdraw in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of appeal.
3. The brief facts of the case are that the Assessee is a charitable institution, had applied for registration under Section 12AB and approval under section 80G of the Act.
4. The Ld. CIT(E) vide separate orders dated 26th March, 2026 rejected applications for renewal/permanent registration under Section 12AB for delay filing, as in terms of the provisions of section 12A(c)(iii) the application for regularization of provisional registration should have been made within six months from date of commencement of charitable activities. In the present case, provisional registration has been granted on 01-11-2023, therefore, trust should have made an application within six months from that upto May, 2024. The CIT(E) held that present application in form 10AB for regularization filed on 27-09-2025, delayed by more than 15 months, is not valid as per the provisions. The assessee failed to explain the delay, exhibited casual approach towards statutory compliance.
5. The Assessee, being aggrieved by the rejection of application for registration u/s 12AB of the Act, preferred impugned appeal.
6. Before us, the ld AR of the assessee submitted that the delay was not an intentional, it got delayed due to confusion from the provisional registration issued for validity upto AY 2026-27, and tax consultant has also gave opinion that renewal application should be filed at least six months before the expiry of validity i.e. 30-09-2025, accordingly, it filed application on 27-09-2025. The assessee was under bona fide belief that 12A registration application could file upto 30-09-2025, otherwise , it would have furnished within time permitted in the provisions of the section 12A(c) of the Act.
7. We have considered the rival submissions, perused the material on record and observed that Form 10AC issued to grant provisional registration u/s 12A by the CIT(E) upto AY 2026-27. As regard the delay in making application for regularisation of provisional registration, the ld.AR has admitted the delay and requested for condoning the same as the delay was on account of confusion and professional advise, as they are not subject expert. We find that the assessee filed provisional registration application in time which is undisputed. Moreover, the delay in fling application for final approval was delayed for which it is attributed to the bona fide reasons of having approval / registration upto AY 2026-27. We find that on identical issue of delay in the coordinate bench of ITAT, Mumbai in the case of Narke Green Foundation Charitable Institution ITA no.1864/Mum/2025 gave following directions:
“5.9 At this juncture we refer to the pragmatic approach advocated by Justice V.R. Krishna Iyer, wherein he advocated a flexible approach to procedural law, that serve as “handmaid” to justice, and not a hinder it. The Principle of Justice Krishna Iyer emphasised that procedural laws should be tools to facilitate administration of justice various decisions of Hon’ble Supreme Court has emphasised to strike a balance between strict adherence to procedural rules and the need to ensure that justice is not denied due to technicalities.
5.10 We agree with the above preposition observed by Hon’ble Pune Tribunal. However genuine and bona-fide reason stated by the assessee cannot be over looked. Further we also note that, flexible and pragmatic approach to such procedural laws is necessary as against recognising a strict adherence to do which could sometime lead to injustice. Hon’ble Supreme Court in plethora of cases always emphasized that while considering delay, one must first ascertain bonafide of the explanation offered by the party seeking condonation. Thereafter there must be sufficient cause which is substantial based on the genuine reasonable explanation.
5.11 While condoning the delay it is crucial to ensure the party seeking condonation provide genuine explanation for the delay. In present facts of the case, we note that, the reason that caused delay is based on a bonafide belief on behalf of the assessee without there being any malafide intention.”
8. In our considered opinion assessee must get an opportunity to present its case before the Ld.CIT(E) and to explain the reason that caused the delay. The Ld.CIT(E) shall consider the application of assessee seeking condonation of delay in accordance with law keeping in view to the above principles of natural justice.”
9. Respectfully following the above decision, we deem it appropriate to restore the application for seeking registration under section 12AB of the Act to the file of the learned CIT(E) for de novo adjudication on the delay in submission of relevant application before the ld. CIT(E), which may be considered in accordance with law.
10. ITA No.6939/MUM/2026: relating to rejection of an application for approval under section 80G of the Act.
11. The Ld.CIT(E) has rejected impugned application for approval u/s 80G of the Act, for the reason of rejection of application for regularization of registration u/s 12AB of the Act.
12. As we have remanded the issue of grant of registration under section 12AB of the Act to the file of the learned CIT(E) for de novo adjudication, therefore the order of the learned CIT(E) for rejecting the application for registration under section 80G of the Act is also set aside and the matter is restored to the file of the learned CIT(E) for deciding it afresh. As a result, the grounds raised by the assessee are allowed for statistical purposes.
13. In the result, both appeals by the assessee ITA No. 6933/MUM/2026 and 6939/MUM/206 are allowed for statistical purposes.
Order pronounced in the open court on 12.10.2026.
