CHETANA ,MUMBAI V. CIT(EXEMPTION) , MUMBAI

ITA 1812/MUM/2025

AI Insights

The case involves Chetana College, a trust, which appealed against the decision of the CIT (Exemptions) rejecting its application for registration under Section 10(23C) of the Income-tax Act, 1961. The CIT (E) had rejected the application primarily on the grounds of delayed filing and inadequate documentary proof regarding the trust's activities and objectives. However, the Tribunal, referencing a similar case (Amba Shanti Foundation), decided to condone the delay in filing the application, emphasizing that procedural delays should not defeat substantive rights, especially in the absence of mala fide conduct or gross negligence. The Tribunal directed the CIT (E) to reconsider the application on its merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707082 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 18-03-2025
• Other Referred Cases: Amba Shanti Foundation, Jagriti Mission, Director of Income-tax (Exemption) v. Vishwa Jagriti Mission
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.A. DHYANI
• Assessee Lawyers: ASHISH A. THAKURDESAI
• Keywords: Condonation of delay; Set aside; Procedural lapse
• Section: 12A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 1812/MUM/2025 Chetana, Survey No. 341, Chetana College, Government Colony, Bandra East, Mumbai-400051. Vs. CIT (Exemptions), 601, 6th floor, Cumballa Hill MTNL TE Building, Pedder Road, Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026. PAN NO. AAATC 3012 A Appellant Respondent Assessee by : Mr. Ashish A. Thakurdesai Revenue by : Mr. R.A. Dhyani, CIT-DR Date of Hearing : 10/06/2025 Date of pronouncement : 10/07/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 24.02.2025 passed by the Ld. Commissioner of Income-tax (Exemptions), Mumbai [in short ‘the Ld. CIT(E)’] rejecting the application of the assessee for registration u/s 10(23C) of the Income-tax Act, 1961 (in short ‘the Act’). 2. We have heard the rival submissions of the parties and perused the material available on record. The brief facts of the case are that the assessee, a trust, was granted provisional approval under Section 10(23C) of the Income as \"the Act\"), vide Form No. 10AC for a period covering Assessment Years 2022–23 to 2024 proviso to sub-section (5) of Section 10(23C) of the Act, the assessee was required to submit an application for reg provisional approval either within six months from the commencement of its activities or at least six months prior to the expiry of the provisional registration, whichever was earlier. According to the learned CIT(E)\", the assessee was the application for regularisation by September 2023. Subsequently, the Central Board of Direct Taxes (CBDT), by way of Circular No. 7/2024 dated 25.04.2024, extended the due date for filing such application to 30.06.2024, subject to cert However, the assessee filed the application for regularisation under Section 10(23C) on 21.08.2024 While the CIT(E) noted that the assessee had not furnished adequate documentary proof regarding its activi objects, the application was ultimately rejected on the preliminary ground of being non relevant observation of the Ld “6. Thus, the application for regularization of provisional approval in Form 10AB filed by the assessee is not allowable on the We have heard the rival submissions of the parties and perused the material available on record. The brief facts of the case are that the assessee, a trust, was granted provisional approval under Section 10(23C) of the Income-tax Act, 1961 (hereinafter ref as \"the Act\"), vide Form No. 10AC for a period covering Assessment 23 to 2024–25. In terms of clause (iii) of the first section (5) of Section 10(23C) of the Act, the assessee was required to submit an application for regularisation of such provisional approval either within six months from the commencement of its activities or at least six months prior to the expiry of the provisional registration, whichever was earlier. According to the learned CIT(E)\", the assessee was the application for regularisation by September 2023. Subsequently, the Central Board of Direct Taxes (CBDT), by way of Circular No. 7/2024 dated 25.04.2024, extended the due date for filing such application to 30.06.2024, subject to cert However, the assessee filed the application for regularisation under Section 10(23C) on 21.08.2024—i.e., after the extended timeline. While the CIT(E) noted that the assessee had not furnished adequate documentary proof regarding its activities, expenses, and objects, the application was ultimately rejected on the preliminary ground of being non-maintainable due to delayed filing. relevant observation of the Ld. CIT(E) is reproduced as under 6. Thus, the application for regularization of provisional approval in Form 10AB filed by the assessee is not allowable on the Chetana 2 ITA No. 1812/MUM/2025 We have heard the rival submissions of the parties and perused the material available on record. The brief facts of the case are that the assessee, a trust, was granted provisional approval under tax Act, 1961 (hereinafter referred to as \"the Act\"), vide Form No. 10AC for a period covering Assessment 25. In terms of clause (iii) of the first section (5) of Section 10(23C) of the Act, the assessee ularisation of such provisional approval either within six months from the commencement of its activities or at least six months prior to the expiry of the provisional registration, whichever was earlier. According to the learned CIT(E)\", the assessee was obligated to file the application for regularisation by September 2023. Subsequently, the Central Board of Direct Taxes (CBDT), by way of Circular No. 7/2024 dated 25.04.2024, extended the due date for filing such application to 30.06.2024, subject to certain conditions. However, the assessee filed the application for regularisation under i.e., after the extended timeline. While the CIT(E) noted that the assessee had not furnished ties, expenses, and objects, the application was ultimately rejected on the preliminary maintainable due to delayed filing. The . CIT(E) is reproduced as under: 6. Thus, the application for regularization of provisional approval in Form 10AB filed by the assessee is not allowable on the ground of late filing of application. For statistical purposes, this application is non 2.1 Before us, learned counsel for the assessee placed reliance on the order of the Coordinate Bench of the Tribunal in the case of Amba Shanti Foundation wherein under substantially similar circumstances, the delay in filing the application for regularisation was condoned by the Tribunal. The Tribunal in that case observed that the extended due date for filing Form 10AB, as per CBDT Circular No. 7/2024, was 30.06.2024, and though the assessee therein had filed the application on 24.07.2024 with a delay of 23 days, such delay was not fatal in nature. Placing reliance on the decision of the Hon’ble Delhi High Court in Jagriti Mission [(2013) 30 taxmann.com 41 (Delhi)], the Tribunal reiterated the settled principles governing condonation of delay namely, that justice should not be defeated on account of a mere technical or procedural lapse, particularly where no mala fides or deliberate default is established. The Coordinate Bench in Shanti Foundation (supra) further observed that the CBDT’s circular extending the due date reflects a legislative intent to offer a fair opportunity to applicants and is indicative of a liberal and facilitative approach.The relevant finding of the observed as under: “6. We have heard the rival submissions and perused the materials available on record. The only moot issue that requires adjudication is whether the assessee is entitled to registration u/s. 12A after the ground of late filing of application. For statistical purposes, this application is non-maintainable and stands rejected.” fore us, learned counsel for the assessee placed reliance on the order of the Coordinate Bench of the Tribunal in the case of Amba Shanti Foundation in ITA Nos. 1862 & 1863/Mum/2025, wherein under substantially similar circumstances, the delay in e application for regularisation was condoned by the Tribunal. The Tribunal in that case observed that the extended due date for filing Form 10AB, as per CBDT Circular No. 7/2024, was 30.06.2024, and though the assessee therein had filed the 24.07.2024 with a delay of 23 days, such delay was not fatal in nature. Placing reliance on the decision of the Hon’ble Delhi High Court in Director of Income-tax (Exemption) v. Vishwa [(2013) 30 taxmann.com 41 (Delhi)], the Tribunal rated the settled principles governing condonation of delay namely, that justice should not be defeated on account of a mere technical or procedural lapse, particularly where no mala fides or deliberate default is established. The Coordinate Bench in (supra) further observed that the CBDT’s circular extending the due date reflects a legislative intent to offer a fair opportunity to applicants and is indicative of a liberal and facilitative approach.The relevant finding of the Tribunal 6. We have heard the rival submissions and perused the materials available on record. The only moot issue that requires adjudication is whether the assessee is entitled to registration u/s. 12A after the Chetana 3 ITA No. 1812/MUM/2025 ground of late filing of application. For statistical purposes, this ” fore us, learned counsel for the assessee placed reliance on the order of the Coordinate Bench of the Tribunal in the case of in ITA Nos. 1862 & 1863/Mum/2025, wherein under substantially similar circumstances, the delay in e application for regularisation was condoned by the Tribunal. The Tribunal in that case observed that the extended due date for filing Form 10AB, as per CBDT Circular No. 7/2024, was 30.06.2024, and though the assessee therein had filed the 24.07.2024 with a delay of 23 days, such delay was not fatal in nature. Placing reliance on the decision of the Hon’ble tax (Exemption) v. Vishwa [(2013) 30 taxmann.com 41 (Delhi)], the Tribunal rated the settled principles governing condonation of delay— namely, that justice should not be defeated on account of a mere technical or procedural lapse, particularly where no mala fides or deliberate default is established. The Coordinate Bench in Amba (supra) further observed that the CBDT’s circular extending the due date reflects a legislative intent to offer a fair opportunity to applicants and is indicative of a liberal and Tribunal (supra) is 6. We have heard the rival submissions and perused the materials available on record. The only moot issue that requires adjudication is whether the assessee is entitled to registration u/s. 12A after the specified due date a application in form 10AB. It is observed that the extended due date for filing form 10AB as per CBDT circular no. 07/2024 dated 25.04.2024 was 30.06.2024, where the assessee contends that it had filed form 10AB the application for regularization of registration u/s. 12AB. It is observed that there is a catena of decision of the Tribunal as well as the Hon’ble High Courts where a liberal view has been taken in case of condoning the delay in filing application for registration in form 10AB. We would place our reliance on the decision of the Hon’ble Delhi High Court in the case of Director of Income Vishwa Jagriti Taxman 65 (Delhi)/[2014] after considering various decisions had laid are to be taken into consideration for condoning such delay. hereby extract the relevant portion of the reference: “22. The following general principles were laid down and it is these principles which guide condonation of delay: \"And such a liberal approach is adopted on principle as it is that: 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at being defeated. As against this, when highest that can happen is that a cause would be decided on merits 3. \"Every day's delay must be explained\" does not mean that a pedantic approach delay, every second's rational, common sense and pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, deserves to be preferred, for the other side cann have vested right in injustice being done because of a non deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of specified due date and also the extended due date, for filing an application in form 10AB. It is observed that the extended due date for filing form 10AB as per CBDT circular no. 07/2024 dated 25.04.2024 was 30.06.2024, where the assessee contends that it had filed form 10AB on 24.07.2024 with a delay of 23 days in filing the application for regularization of registration u/s. 12AB. It is observed that there is a catena of decision of the Tribunal as well as the Hon’ble High Courts where a liberal view has been taken in case f condoning the delay in filing application for registration in form 10AB. We would place our reliance on the decision of the Hon’ble Delhi High Court in the case of Director of Income-tax (Exemption) vs. Vishwa Jagriti Mission [2013] 30 taxmann.com 41 (De Taxman 65 (Delhi)/[2014] 268 CTR 444 (Delhi)[21-12 after considering various decisions had laid down the principles that are to be taken into consideration for condoning such delay. hereby extract the relevant portion of the said order for ease of “22. The following general principles were laid down and it is these principles which guide the Court in approaching the question of condonation of delay: - \"And such a liberal approach is adopted on principle as it is 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on after hearing the parties. 3. \"Every day's delay must be explained\" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cann have vested right in injustice being done because of a non deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on Chetana 4 ITA No. 1812/MUM/2025 nd also the extended due date, for filing an application in form 10AB. It is observed that the extended due date for filing form 10AB as per CBDT circular no. 07/2024 dated 25.04.2024 was 30.06.2024, where the assessee contends that it on 24.07.2024 with a delay of 23 days in filing the application for regularization of registration u/s. 12AB. It is observed that there is a catena of decision of the Tribunal as well as the Hon’ble High Courts where a liberal view has been taken in case f condoning the delay in filing application for registration in form 10AB. We would place our reliance on the decision of the Hon’ble tax (Exemption) vs. Mission [2013] 30 taxmann.com 41 (Delhi)/[2013] 213 12-2012], where down the principles that are to be taken into consideration for condoning such delay. We said order for ease of “22. The following general principles were laid down and it is these the Court in approaching the question of \"And such a liberal approach is adopted on principle as it is realized 1. Ordinarily, a litigant does not stand to benefit by lodging an 2. Refusing to condone delay can result in a meritorious matter the very threshold and cause of justice is condoned, the highest that can happen is that a cause would be decided on 3. \"Every day's delay must be explained\" does not mean that a should be made. Why not every hour's must be applied in a rational, common sense and pragmatic manner. 4. When substantial justice and technical considerations are the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non- 5. There is no presumption that delay is occasioned culpable negligence, or on account of mala fides. A litigant does not stand to benef resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that the judiciary is respected not on account of its power to but because it is capable of removing to do so 7. From the above, it can be inferred that the Hon’ble High Court has held that a liberal delay which according to the said decision which if found genuine has to be decided in favour Even otherwise, the extended due date by the board vide circular no. 07/2024 is also opportunity to the applicant trust for 30.06.2024, which rather has not ad time limit prescribed by the Act. 8. From the above observation, we deem it fit to extend the assessee with one more regularisation of provisional the ld. CIT(E). The ld. CIT(E) is directed to being filed on time without any delay and to decide the application on the merits and in accordance with law. 2.2 In the present case, the factual matrix is pari materia to that considered in Amba Shanti Foundation following the ratio laid down therein, and applying the principle that procedural delay should not defeat substantive rights in the absence of mala fide conduct or gross negligence, we are inclined to take a liberal view in the matter. Accordingly, we deem it just and appropriate to condone the delay in the filing of the application for regularisation of provisional approval under Secti Act. The impugned order passed by the learned CIT(E) is, therefore, set aside. The matter is restored to the file of the learned CIT(E) with a direction to treat the assessee’s application as having been account of mala fides. A litigant does not stand to benef resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.\" 7. From the above, it can be inferred that the Hon’ble High Court has held that a liberal view has to be taken in case of condoning the delay which according to the said decision is a mere technicality which if found genuine has to be decided in favour of the assessee. Even otherwise, the extended due date by the board vide circular no. 07/2024 is also evident that the intention was to provide one more opportunity to the applicant trust for filing the application till 30.06.2024, which rather has not adhered strictly to the time limit prescribed by the Act. 8. From the above observation, we deem it fit to extend the assessee with one more opportunity to file the application in form 10AB for regularisation of provisional approval granted to the assessee, before the ld. CIT(E). The ld. CIT(E) is directed to treat the application as being filed on time without any delay and to decide the application on the merits and in accordance with law.” In the present case, the factual matrix is pari materia to that Amba Shanti Foundation (supra). Respectfully following the ratio laid down therein, and applying the principle that procedural delay should not defeat substantive rights in the bsence of mala fide conduct or gross negligence, we are inclined to take a liberal view in the matter. Accordingly, we deem it just and appropriate to condone the delay in the filing of the application for regularisation of provisional approval under Section 10(23C) of the Act. The impugned order passed by the learned CIT(E) is, therefore, set aside. The matter is restored to the file of the learned CIT(E) with a direction to treat the assessee’s application as having been Chetana 5 ITA No. 1812/MUM/2025 account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that the judiciary is respected not on legalize injustice on technical grounds injustice and is expected 7. From the above, it can be inferred that the Hon’ble High Court has view has to be taken in case of condoning the is a mere technicality of the assessee. Even otherwise, the extended due date by the board vide circular no. evident that the intention was to provide one more iling the application till hered strictly to the stipulated 8. From the above observation, we deem it fit to extend the assessee opportunity to file the application in form 10AB for assessee, before treat the application as being filed on time without any delay and to decide the assessee’s ” In the present case, the factual matrix is pari materia to that (supra). Respectfully following the ratio laid down therein, and applying the principle that procedural delay should not defeat substantive rights in the bsence of mala fide conduct or gross negligence, we are inclined to take a liberal view in the matter. Accordingly, we deem it just and appropriate to condone the delay in the filing of the application for on 10(23C) of the Act. The impugned order passed by the learned CIT(E) is, therefore, set aside. The matter is restored to the file of the learned CIT(E) with a direction to treat the assessee’s application as having been filed within the prescribed time a merits and in accordance with law. 3. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 10 Sd/ (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 10/07/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// filed within the prescribed time and to consider the same afresh on merits and in accordance with law. In the result, the appeal filed by the assessee is allowed for nced in the open Court on 10/07 Sd/- Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Chetana 6 ITA No. 1812/MUM/2025 nd to consider the same afresh on In the result, the appeal filed by the assessee is allowed for /07/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "