AMRUT PUBLIC CHARITABLE TRUST,MUMBAI V. ITO, EXEMPTION WARD 1(1), MUMBAI

ITA 7387/MUM/2025

AI Insights

The case involves Amrut Public Charitable Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions) rejecting their application for regular approval under section 80G(5) due to a significant delay in filing the application form. The Trust argued that the delay was due to a bona fide misunderstanding of the validity period of their provisional approval, believing it to be co-terminus with their registration under section 12A, which was valid until A.Y. 2026-27. The Tribunal found that the rejection was solely on procedural grounds without examining the substantive eligibility of the Trust, which had been accepted in parallel proceedings for registration under section 12AB(1)(b).

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 832249 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 14-11-2025
• Other Referred Cases: PCIT vs. Wipro Ltd., Commissioner of Customs vs. Dilip Kumar & Co., Ramtirth Godavari Seva Samiti, Anybody Can Help Foundation
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV; LD
• Assessee Lawyers: P. P. JAYARAMAN; LD
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Charitable institution; Procedural lapse
• Section: 12A; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 7387/Mum/2025 (Assessment Year: 2026-27) Amrut Public Charitable Trust Block 4, Plot No. 578A, Jitendra Bldg, JameJamshed Road, Matunga, Mumbai- 400 019 Vs. ITO Exemption Ward 1(1), Cumballa Hill, Pedder Road, Mumbai-400 026 PAN/GIR No.AAATA4810A (Applicant) (Respondent) Assessee by Shri P. P. Jayaraman, Ld. AR Revenue by Shri Rajesh Kumar Yadav, Ld. DR Date of Hearing 13.01.2026 Date of Pronouncement 19.01.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal is filed by the assessee trust against the order passed by the Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”], dated 29.09.2025, whereby the application filed by the assessee in Form No. 10AB Printed from counselvise.com 2 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust seeking approval under section 80G(5) of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] was rejected. 2. The brief facts of the case are that the assessee is a charitable trust registered under the Bombay Public Trust Act, 1950, and is engaged in religious cum charitable activities. The trust was earlier granted registration under section 12A of the Act, which, as per the record, was valid up to A.Y. 2026–27.The assessee was also granted provisional approval under section 80G(5) of the Act in Form No. 10AC vide order dated 31.12.2022, which was valid up to A.Y. 2025–26. In terms of the amended provisions of section 80G(5), the assessee was required to file an application in Form No. 10AB for conversion of the provisional approval into regular approval within the time prescribed under clause (iii) of the first proviso to section 80G(5) of the Act. 3. The assessee filed its application in Form No. 10AB on 28.03.2025, seeking regular approval under section 80G(5). During the course of proceedings, the learned CIT(Exemptions) observed that the application was not accompanied by all the documents prescribed under Rule 11AA(2) of the Income-tax Rules, 1962, and accordingly issued notices dated 14.07.2025, 29.08.2025, 12.09.2025 and 17.09.2025, affording opportunities to the assessee to comply and to explain why the application should not be rejected. In response, the assessee admitted that there was a delay in filing the application in Form No. 10AB and submitted that the delay occurred due to a bona fide Printed from counselvise.com 3 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust misunderstanding regarding the validity period of the provisional approval under section 80G(5), which, according to the assessee, was mistakenly presumed to be co-terminus with the registration under section 12A, i.e. up to A.Y. 2026–27. The assessee also sought condonation of delay. 4. The learned CIT(Exemptions), after examining the submissions, held that as per clause (iii) of the first proviso to section 80G(5), an institution holding provisional approval is required to apply for regular approval at least six months prior to the expiry of the provisional approval or within six months of commencement of its activities, whichever is earlier. It was held that since the assessee’s provisional approval under section 80G(5) was granted on 31.12.2022, the application for regular approval ought to have been filed by June 2023. However, the assessee filed the application only on 28.03.2025, resulting in a delay of more than 20 months, which, according to the learned CIT(Exemptions), rendered the application non-maintainable. The learned CIT(Exemptions) further held that filing of Form No. 10AB within the prescribed time is a statutory and substantive requirement and not a mere procedural formality. Reliance was placed on the decisions of the Hon’ble Supreme Court in PCIT vs. Wipro Ltd. (2022) 140 taxmann.com 223 (SC) and Commissioner of Customs vs. Dilip Kumar & Co. (2018) 9 SCC 1, to hold that exemption provisions require strict compliance and that delay cannot be condoned in absence of statutory enabling provision. Printed from counselvise.com 4 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust On these grounds, the application filed by the assessee in Form No. 10AB was held to be non-maintainable and was rejected. 5. Aggrieved by the order of the learned CIT(E), the assessee is in appeal before us and has raised following grounds: 1. That the learned CIT(Exemption) erred in law and on facts by rejecting the appellant's application for final approval under Section 80G(5) of the Income-tax Act, 1961 (the Act), solely on the technical ground of delay in filing form 10AB, thereby failing to appreciate that the delay was neither willful nor deliberate. 2. That the learned CIT(Exemption) ought to have appreciated that the delay in filing the application for final approval was due to a bona fide and inadvertent mistake on the part of the appellant in correctly interpreting the validity period of the provisional registration, believing it to be valid until AY 2026-27 instead of the actual expiry date related to AY 2025-26. The trust is registered u/s 12A having validity till AY 2026-27 and the same is misunderstood by the appellant that provisional approval u/s 80G(5) is also valid till AY 2026-27. The appellant prays for the condonation of delay under the principle of ‘sufficient cause’, as the oversight was technical and no male fide intent to circumvent the law existed. 3. That the learned CIT(Exemption) failed to consider the principle of substantive justice over technicalities, which is paramount in the case of charitable organizations. The Tribunal is requested to adopt a liberal and pragmatic approach and condone the technical delay, thereby allowing the application to be decided on its merits and not on a procedural lapse. 4. That the learned CIT(Exemption) failed to consider that the appellant trust is otherwise eligible for the grant of final 80G approval, as it has substantially complied with all the statutory and regulatory requirements and its activities are genuinely charitable, as evidenced by its accounts and activities during the provisional approval period. Printed from counselvise.com 5 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust The Tribunal should direct the CIT(Exemption) to examine the application on merits rather than rejecting it solely on the ground of delay. 5. Without prejudice to the above, the appellant requests that the application originally filed under clause (iii), be considered as an application filed under clause (iv)(B) of section 80G(5) of the Income Tax Act, 1961. 6. Your appellant prays for permission to add to, amend or alter any or all the grounds of appeal at any time prior to the hearing of the appeal. 6. During the course of hearing before us the learned Authorised Representative (AR) submitted that the assessee is an existing charitable trust continuously carrying out charitable activities since its inception and there is no dispute at any stage regarding the genuineness of its objects or activities. It was submitted that the assessee was granted registration under section 12A of the Income-tax Act, 1961, under the new registration regime, which was valid up to A.Y. 2026–27. Simultaneously, the assessee was also granted provisional approval under section 80G(5) in Form No. 10AC, which was valid only up to A.Y. 2025–26. Thus, two separate orders under the same transition regime carried two different terminal years of validity. The learned AR submitted that this divergence in validity periods caused genuine and bona fide confusion at the assessee’s end. It was submitted that the assessee, acting on professional advice, proceeded under the bona fide belief that the approval under section 80G(5) would remain valid co-terminus with the registration under section 12A, i.e. up to A.Y. 2026–27. On account of this mistaken understanding, the assessee did not file Printed from counselvise.com 6 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust the application in Form No. 10AB within the period contemplated under clause (iii) of the first proviso to section 80G(5). 7. It was further submitted that immediately upon discovery of this discrepancy during an internal review in March 2025, the assessee acted with promptitude and filed the application for regular approval under section 80G(5) in Form No. 10AB on 28.03.2025. It was emphasised that there was no deliberate inaction, negligence or mala fide intent on the part of the assessee, and the delay occurred purely due to technical confusion arising from the issuance of multiple Form No. 10AC orders by the Department itself. 8. The learned AR submitted that while the learned CIT(E) rejected the application under section 80G(5) on the ground of delay of more than 20 months, the same authority, on the very same set of facts, granted regular registration under section 12AB(1)(b) to the assessee for a period of ten years from A.Y. 2027–28 to A.Y. 2036–37. It was submitted that this fact clearly establishes that the charitable character, objects and activities of the assessee stood accepted by the Department, and the rejection under section 80G(5) was solely on a procedural ground. 9. The learned AR further submitted that a detailed application for condonation of delay dated 14.01.2026 has been filed before the Bench, wherein the assessee has explained the reasons constituting “reasonable cause”. In support thereof, the assessee has filed a sworn affidavit of the trustee, Shri Bhupesh S. Shah, Printed from counselvise.com 7 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust and a separate affidavit of the Chartered Accountant, Shri P. P. Jayaraman, both duly notarised. 10. It was submitted that the trustee’s affidavit categorically affirms the issuance of two separate Form No. 10AC orders, the reliance on professional advice, the bona fide misunderstanding regarding timelines, and the immediate corrective action taken upon discovery of the error. The affidavit also affirms that non- condonation of delay would cause irreparable hardship and severely hamper the charitable activities of the trust. It was further submitted that the Chartered Accountant, in his affidavit, has candidly owned the mistake and affirmed that the delay arose from a bona fide interpretational error owing to the overlapping transition regime, and that the assessee acted immediately once the correct legal position was realized. It was submitted that such conduct demonstrates transparency and bona fides rather than negligence or contumacious disregard of law. 11. The learned Authorised Representative placed reliance on judicial precedents, including the decision of the ITAT, Pune Bench in the case of Ramtirth Godavari Seva Samiti (ITA No. 2602/PUN/2025), wherein delays in filing applications under the new charitable registration regime were condoned, recognising that the regime is complex and prone to bona fide lapses. Reliance was also placed on the decision of the Mumbai Bench of the Tribunal in the case of Anybody Can Help Foundation (ITA No. 7245/MUM/2025), wherein the matter was restored to the file Printed from counselvise.com 8 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust of the CIT(E) with a direction to grant approval under section 80G if the assessee was otherwise eligible. 12. Further reliance was placed on CBDT Circular No. 7/2024, wherein the Board itself has acknowledged widespread confusion in the new registration and approval framework and has granted extensions to mitigate genuine hardship faced by charitable institutions. 13. Without prejudice, it was submitted that even if the application filed under clause (iii) of section 80G(5) is held to be defective, the same may be directed to be considered under clause (iv)(B) of section 80G(5), so as to advance the cause of substantial justice. 14. The learned AR thus prayed that the delay in filing Form No. 10AB be condoned, the impugned order of the learned CIT(Exemptions) be set aside, and the matter be restored to the file of the CIT(Exemptions) with a direction to examine the assessee’s application for approval under section 80G(5) on merits and in accordance with law. 15. The learned Departmental Representative strongly objected to the prayer of the assessee for condonation of delay. It was submitted that the statutory scheme governing approval under section 80G(5) of the Act prescribes a clear and mandatory time limit for filing the application in Form No. 10AB, as provided under clause (iii) of the first proviso to section 80G(5).The learned Printed from counselvise.com 9 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust Departmental Representative submitted that the statute does not vest any power in the CIT(E) to condone delay in filing the application beyond the prescribed time limit. It was contended that, in the absence of an express statutory provision conferring such power, the learned CIT(Exemptions) was correct in treating the application as non-maintainable and rejecting the same. It was further submitted that exemption provisions under the Act are to be construed strictly and any deviation from the statutory conditions would render the claim untenable. The learned Departmental Representative supported the reasoning adopted by the learned CIT(Exemptions) and submitted that the impugned order does not suffer from any infirmity warranting interference. 16. We have carefully considered the rival submissions and perused the material available on record, including the impugned order passed by the learned Commissioner of Income Tax (Exemptions), the written submissions filed before us, the application seeking condonation of delay, and the sworn affidavits filed by the trustee of the assessee trust as well as by the Chartered Accountant. 17. It is an undisputed fact that the assessee trust was granted registration under section 12A, which was valid up to A.Y. 2026– 27, and provisional approval under section 80G(5) in Form No. 10AC, which was valid up to A.Y. 2025–26. It is also undisputed that the assessee filed its application for regular approval under section 80G(5) in Form No. 10AB on 28.03.2025, which, Printed from counselvise.com 10 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust according to the learned CIT(Exemptions), resulted in a delay of more than 20 months when reckoned with reference to the timeline contemplated under clause (iii) of the first proviso to section 80G(5). The application was rejected solely on the ground of delay, without entering into the merits of the assessee’s eligibility or the genuineness of its charitable activities. 18. It is further a matter of record that, on the very same set of facts and during the same period, the Department granted the assessee regular registration under section 12AB(1)(b) for a period of ten years from A.Y. 2027–28 to A.Y. 2036–37, thereby expressly accepting the charitable objects and genuineness of the assessee’s activities. Thus, the rejection of approval under section 80G(5) is not founded on any adverse finding with respect to the substantive conditions prescribed under the Act, but rests entirely on a procedural lapse. 19. The assessee has consistently explained that the delay occurred on account of bona fide confusion arising from the existence of two separate Form No. 10AC orders carrying different terminal years of validity, one pertaining to registration under section 12A and the other to provisional approval under section 80G(5). This explanation is not only plausible but is also supported by contemporaneous documentary evidence, including sworn affidavits and the conduct of the assessee in taking prompt corrective action upon discovery of the mistake. The trustee, in a duly notarised affidavit, has affirmed reliance on professional Printed from counselvise.com 11 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust advice and absence of any deliberate or contumacious disregard of statutory requirements. The Chartered Accountant has, in his affidavit, candidly acknowledged the interpretational error arising from the overlapping timelines under the transition regime and has affirmed that the assessee acted immediately upon realising the correct legal position. 20. At this stage, it is relevant to note that the complexity of the new registration and approval regime for charitable institutions is not merely an assertion of the assessee, but stands acknowledged at the administrative level as well. The CBDT, in Circular No. 7/2024, has recognised that charitable institutions have faced genuine difficulties and procedural lapses while navigating the transition to the new regime, owing to multiple statutory provisions, forms, timelines and portal-related compliances. While the said Circular does not dilute statutory requirements, it reflects the administrative understanding that rigid adherence to procedural timelines, in isolation, may result in unintended and disproportionate consequences for genuine charitable institutions. 21. The controversy raised before us is also no longer res integra. The coordinate Bench of the Tribunal in Anybody Can Help Foundation vs. ITO (Exemptions) (ITA No. 7245/Mum/2025, order dated 06.01.2026) has examined the scheme of section 80G(5) in the context of the new registration regime and has laid down clear principles governing rejection of applications on Printed from counselvise.com 12 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust technical grounds of limitation. The Tribunal has held that where an application in Form No. 10AB is rejected solely on the ground of delay, without recording any adverse finding regarding the charitable nature of activities or non-compliance with the substantive conditions of section 80G(5), such rejection is legally unsustainable. It has further been held that a purely technical lapse should not result in permanent denial of approval, particularly when the trust is otherwise eligible and its activities are not in doubt. 22. The learned DR has objected to the grant of relief on the ground that the statute, as it stood at the relevant point of time, did not empower the learned CIT(E) to condone delay and that exemption provisions are required to be construed strictly. There can be no dispute with the proposition that exemption provisions must be complied with in accordance with law. However, as rightly held by the coordinate Bench, the issue before us is not whether the learned CIT(E) could have condoned the delay, but whether an application otherwise eligible can be rejected outright on a purely technical ground, leading to irreversible civil consequences, without any examination on merits. 23. In our considered view, where the delay is satisfactorily explained, the conduct of the assessee is bona fide, the charitable character and genuineness of activities stand accepted by the Department itself in parallel proceedings, and the administrative authorities themselves have acknowledged the practical Printed from counselvise.com 13 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust difficulties faced by charitable institutions under the new regime, a mechanical rejection of the application solely on the ground of limitation defeats the object of the statutory scheme and results in disproportionate hardship. 24. In view of the foregoing discussion, and having regard to the totality of facts and circumstances of the case, we are of the considered opinion that the impugned order passed by the learned CIT (E) cannot be sustained. 25. We find that the rejection of the assessee’s application in Form No. 10AB has been made solely on the ground of delay, without recording any adverse finding in respect of the charitable objects of the trust, the genuineness of its activities, or compliance with the substantive conditions prescribed under clauses (i) to (v) of section 80G(5) of the Act. The delay has been satisfactorily explained as arising from bona fide confusion under the transition regime, which explanation stands supported by sworn affidavits and contemporaneous material and has not been rebutted by the Revenue. 26. We also note that, on the very same set of facts, the Department has granted the assessee regular registration under section 12AB(1)(b) for a period of ten years, thereby accepting the charitable nature and genuineness of its activities. In such circumstances, rejection of approval under section 80G(5) on a purely technical ground, without examination on merits, would Printed from counselvise.com 14 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust lead to irreversible and disproportionate consequences, defeating the object of the statutory scheme. 27. Respectfully following the binding ratio laid down by the coordinate Bench of the Tribunal in Anybody Can Help Foundation vs. ITO (Exemptions) (ITA No. 7245/Mum/2025, order dated 06.01.2026), and applying the settled judicial principle that procedural prescriptions are intended to advance the cause of justice and not to defeat substantive rights, we hold that the impugned rejection of the assessee’s application is not sustainable in law. 28. Accordingly, we set aside the impugned order passed by the learned CIT(Exemptions) and restore the matter to his file with the following directions: i. The learned CIT(Exemptions) shall condone the delay in filing the assessee’s application in Form No. 10AB, the same having been satisfactorily explained as bona fide and unintentional; and ii. The learned CIT(Exemptions) shall thereafter examine the assessee’s application for approval under section 80G(5) on merits, strictly in accordance with law, and grant approval if the assessee is otherwise found to be eligible, after verifying compliance with the statutory conditions and the genuineness of its charitable activities, after affording due opportunity of being heard to the assessee. Printed from counselvise.com 15 ITA No. 7387/Mum/2025 Amrut Public Charitable Trust 29. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 19.01.2026. Sd/- Sd/- (AMIT SHUKLA) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 19/01/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT 5. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai Printed from counselvise.com "