LANCER FOUNDATION ,MUMBAI V. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

ITA 5028/MUM/2025

AI Insights

The case involves Lancer Foundation, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Mumbai, rejecting their application for regularization of registration under section 12AB of the Income-tax Act, 1961. The rejection was based on two grounds: a significant delay in filing the application and a violation of section 11 of the Act concerning the Memorandum of Association. The Tribunal found that the delay in filing the application was beyond the extended deadline provided by the CBDT, and the necessary amendments to the Memorandum of Association were not adequately addressed. However, the Tribunal noted the recent legislative change allowing for condonation of delay and remanded the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781418 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 13-08-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: BHARAT GANDHI
• Keywords: Condonation of delay; Set aside; Reasonable cause; Ignorance of law
• Section: 11

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 5028/MUM/2025 Lancer Foundation, Unit No. H02-02,03,04, Mayuresh Chambers, PS, P-No. 60, Sector 11, Belapur, Navi Mumbai-400614. Vs. CIT (E), Room No. 601, 6th floor, Cumballa Hill, MTNL Te Building, Peddar Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026. PAN NO. AAFCL 0878 F Appellant Respondent Assessee by : Mr. Bharat Gandhi Revenue by : Mr. Rajesh Kumar Yadav, CIT-DR Date of Hearing : 25/09/2025 Date of pronouncement : 30/09/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against the order dated 25.06.2025 passed by the learned Commissioner of Income-tax (Exemption), Mumbai [hereinafter referred to as “the ld. CIT(E)”], whereby the ld. CIT(E) rejected the application of the assessee seeking regularization of registration under section 12AB of the Income-tax Act, 1961 (hereinafter “the Act”). Printed from counselvise.com 2. The grounds raised by the assessee are reproduced as under: 1. The learned Commissioner of Income Tax (Exemptions) Mumbai erred in contending that there is a delay of 19 months as against the factual delay of 5 months (1 July 2024 to 19th November 2024) by virtu of Circular No. _ provided by the Central Board of Direct Taxes. 2. The learned Commissioner of Income Tax (Exemptions) Mumbai erred in not accepting the fact that the delay in submission was on account of the cons was looking after the compliance left the assignment half way through and it took time for the appellant to find a new consultant to compile with the provisions. 3. The learned Commissioner of Income Tax (Exemptions) Mumbai erred by objecting to a Memorandum of Association violating section 11 of the Income Tax Act without clause 4 of the Memorandum of Association the objects of the company extended to the whole of India. 4. Without prejudice to ground no Commissioner of Income Tax (Exemptions) Mumbai erred in not appreciating the fact that the intention/desire of the appellant to delete clause no 3(6) by amending the Memorandum of Association for which time is required 3. Briefly stated, facts of the case are that the assessee filed an application in Form No. 10AB u/s 12A(1)(ac)(iii) seeking registration u/s 12AB of the Act having obtained provisional registration, was under obligatio apply for regularisation in Form 10AB latest by March, 2023. The assessee, however, filed the application only on 19.11.2024. there was a delay in filing the relevant application 3.1 The ld. CIT(E) rejected the application on two grounds on the ground of delay which, according to him, was 19 months and not explained by sufficient cause; and second, on the ground that The grounds raised by the assessee are reproduced as under: The learned Commissioner of Income Tax (Exemptions) Mumbai erred in contending that there is a delay of 19 months as against the factual delay of 5 months (1 July 2024 to 19th November 2024) by virtu of Circular No. _ provided by the Central Board of Direct Taxes. The learned Commissioner of Income Tax (Exemptions) Mumbai erred in not accepting the fact that the delay in submission was on account of the consultant who was looking after the compliance left the assignment half way through and it took time for the appellant to find a new consultant to compile with the provisions. The learned Commissioner of Income Tax (Exemptions) Mumbai erred by objecting to a clause 3(6) in the Memorandum of Association violating section 11 of the Income Tax Act without considering the fact that in clause 4 of the Memorandum of Association the objects of the company extended to the whole of India. Without prejudice to ground no 3, the learned Commissioner of Income Tax (Exemptions) Mumbai erred in not appreciating the fact that the intention/desire of the appellant to delete clause no 3(6) by amending the Memorandum of Association for which time is required for uploading. efly stated, facts of the case are that the assessee filed an application in Form No. 10AB u/s 12A(1)(ac)(iii) seeking registration u/s 12AB of the Act. According to the ld. CIT(E), the assessee having obtained provisional registration, was under obligatio apply for regularisation in Form 10AB latest by March, 2023. The assessee, however, filed the application only on 19.11.2024. there was a delay in filing the relevant application. The ld. CIT(E) rejected the application on two grounds on the ground of delay which, according to him, was 19 months and not explained by sufficient cause; and second, on the ground that Lancer Foundation 2 ITA No. 5028/MUM/2025 The grounds raised by the assessee are reproduced as under: The learned Commissioner of Income Tax (Exemptions) Mumbai erred in contending that there is a delay of 19 months as against the factual delay of 5 months (1st July 2024 to 19th November 2024) by virtu of Circular No. _ provided by the Central Board of Direct Taxes. The learned Commissioner of Income Tax (Exemptions) Mumbai erred in not accepting the fact that the delay ultant who was looking after the compliance left the assignment half way through and it took time for the appellant to find a new consultant to compile with the provisions. The learned Commissioner of Income Tax (Exemptions) clause 3(6) in the Memorandum of Association violating section 11 of the the fact that in clause 4 of the Memorandum of Association the objects 3, the learned Commissioner of Income Tax (Exemptions) Mumbai erred in not appreciating the fact that the intention/desire of the appellant to delete clause no 3(6) by amending the Memorandum of Association for efly stated, facts of the case are that the assessee filed an application in Form No. 10AB u/s 12A(1)(ac)(iii) seeking registration . According to the ld. CIT(E), the assessee having obtained provisional registration, was under obligation to apply for regularisation in Form 10AB latest by March, 2023. The assessee, however, filed the application only on 19.11.2024. Thus, The ld. CIT(E) rejected the application on two grounds—first, on the ground of delay which, according to him, was 19 months and not explained by sufficient cause; and second, on the ground that Printed from counselvise.com clause 3(6) of the assessee’s Memorandum of Association was in violation of section 11 of the Act and no resolution or proof of amendment was furnished despite the assessee conceding its willingness to amend. reproduced as under: “4.1 The contention of the applicant is not accept delay of 19 months and the applicant trust had ample time to file the application within the permissible timelimit. The applicant trust are supposed to comply with the compliances of law. It is well settled in principle that ignorance of l defence or valid excuse. It is appropriate to mention that the due date of filing application on or before 30.06.2024 as per the said circular was an extension provided by the board to all the Trust/Institution to file/re applications under certain conditions. However, the applicant failed to avail the benefit of the same. As the applicant has not been able to show any reasonable cause for delay or to establish that the applicant trust had genuine hardship in filing of the application within the due date the request of the applicant for condonation is not tenable. 4.2 Regarding the issue of violation of section 11 of the Income tax Act applicant has itself accepted that the said clause is in violation of provisions of secti memorandum by deleting the said clause. However, the applicant has neither submitted/presented resolution passed by trust for the amendment of memorandum nor submitted any proof that it has applied for amendment in M 5. Since Registration/approval under section 12AB is to be granted in terms of the provisions of section 12AB (1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the c the time being in force as are material for the purposes of achieving its objects. In the view of above mentioned violations, the undersigned is left with no other option but to reject the application seeking registration und 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 and violation of provisions of section 11 clause 3(6) of the assessee’s Memorandum of Association was in violation of section 11 of the Act and no resolution or proof of amendment was furnished despite the assessee conceding its willingness to amend. The relevant finding of ld CIT(E) is as under: 4.1 The contention of the applicant is not acceptable as there is delay of 19 months and the applicant trust had ample time to file the application within the permissible timelimit. The applicant trust are supposed to comply with the compliances of law. It is well settled in principle that ignorance of law cannot be pleaded as defence or valid excuse. It is appropriate to mention that the due date of filing application on or before 30.06.2024 as per the said circular was an extension provided by the board to all the Trust/Institution to file/re applications under certain conditions. However, the applicant failed to avail the benefit of the same. As the applicant has not been able to show any reasonable cause for delay or to establish that the applicant trust had genuine hardship in filing of the application within the due date the request of the applicant for condonation is not tenable. 4.2 Regarding the issue of violation of section 11 of the Income tax Act applicant has itself accepted that the said clause is in violation of provisions of section 11 and also stated it will amend the memorandum by deleting the said clause. However, the applicant has neither submitted/presented resolution passed by trust for the amendment of memorandum nor submitted any proof that it has applied for amendment in MOA before the MCA. 5. Since Registration/approval under section 12AB is to be granted in terms of the provisions of section 12AB (1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects. In the view of above mentioned violations, the undersigned is left with no other option but to reject the application seeking registration under section 12AB of the Act. 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 and violation of provisions of section 11 Lancer Foundation 3 ITA No. 5028/MUM/2025 clause 3(6) of the assessee’s Memorandum of Association was in violation of section 11 of the Act and no resolution or proof of amendment was furnished despite the assessee conceding its relevant finding of ld CIT(E) is able as there is delay of 19 months and the applicant trust had ample time to file the application within the permissible timelimit. The applicant trust are supposed to comply with the compliances of law. It is well aw cannot be pleaded as It is appropriate to mention that the due date of filing application on or before 30.06.2024 as per the said circular was an extension provided by the board to all the Trust/Institution to file/re-file their applications under certain conditions. However, the applicant failed to avail the benefit of the same. As the applicant has not been able to show any reasonable cause for delay or to establish that the applicant trust had genuine hardship in filing of the application within the due date the request of the applicant for 4.2 Regarding the issue of violation of section 11 of the Income tax Act applicant has itself accepted that the said clause is in violation on 11 and also stated it will amend the memorandum by deleting the said clause. However, the applicant has neither submitted/presented resolution passed by trust for the amendment of memorandum nor submitted any proof that it has 5. Since Registration/approval under section 12AB is to be granted in terms of the provisions of section 12AB (1)(b) of the Act after being satisfied about the objects of the trust or institution, the ompliance of any other law for the time being in force as are material for the purposes of achieving its objects. In the view of above mentioned violations, the undersigned is left with no other option but to reject the application 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 and violation of provisions of section 11 Printed from counselvise.com of the Act. In conclus stands rejected. 4. The learned counsel for the assessee submitted before us that the delay was bona fide and occasioned by circumstances beyond the control of the assessee, and therefore deserved condonation. I was further submitted that the assessee is prepared to avail its remedy by filing a proper that the matter be remitted to the ld. CIT(E) to be decided afresh on merits once such condonation is granted. 4.1 The learned Departmental Representative, on the other hand, submitted that the CBDT had specifically extended the time up to 30.06.2024, and since the assessee filed the application thereafter, the ld. CIT(E) was justified in rejecting the same. It was contended that unless condonation is granted, the application could not be entertained. 5. We have considered rival submissions and carefully perused the material on record. The fact remains that the assessee has admittedly filed its application beyond the period of extension provided by the CBDT. authority for condonation for delay in filing application beyond time to the Principal Commissioner or Commissioner. The relevant proviso introduced Finance(No.2) Act, 2024 w.e.f. 1/10/2024 is reproduced as under: of the Act. In conclusion, this application for grant of approval rejected.” The learned counsel for the assessee submitted before us that the delay was bona fide and occasioned by circumstances beyond the control of the assessee, and therefore deserved condonation. I was further submitted that the assessee is prepared to avail its proper petition before the ld CIT(E) that the matter be remitted to the ld. CIT(E) to be decided afresh on merits once such condonation is granted. arned Departmental Representative, on the other hand, submitted that the CBDT had specifically extended the time up to 30.06.2024, and since the assessee filed the application thereafter, the ld. CIT(E) was justified in rejecting the same. It was contended that unless condonation is granted, the application could not be We have considered rival submissions and carefully perused the material on record. The fact remains that the assessee has admittedly filed its application beyond the period of extension provided by the CBDT. But the Hon’ble parliament has provided the y for condonation for delay in filing application beyond time to the Principal Commissioner or Commissioner. The relevant into Act below section 12A(1)(ac)(B) Finance(No.2) Act, 2024 w.e.f. 1/10/2024 is reproduced as under: Lancer Foundation 4 ITA No. 5028/MUM/2025 ion, this application for grant of approval The learned counsel for the assessee submitted before us that the delay was bona fide and occasioned by circumstances beyond the control of the assessee, and therefore deserved condonation. It was further submitted that the assessee is prepared to avail its ld CIT(E) and prayed that the matter be remitted to the ld. CIT(E) to be decided afresh on arned Departmental Representative, on the other hand, submitted that the CBDT had specifically extended the time up to 30.06.2024, and since the assessee filed the application thereafter, the ld. CIT(E) was justified in rejecting the same. It was contended that unless condonation is granted, the application could not be We have considered rival submissions and carefully perused the material on record. The fact remains that the assessee has admittedly filed its application beyond the period of extension he Hon’ble parliament has provided the y for condonation for delay in filing application beyond time to the Principal Commissioner or Commissioner. The relevant below section 12A(1)(ac)(B) by way of Finance(No.2) Act, 2024 w.e.f. 1/10/2024 is reproduced as under: Printed from counselvise.com “ Provided that where the application is filed beyond the time allowed in sub-clause (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time. 5.1 Since the assessee has expressed its willingness to move such an application before the ends of substantial justice would be met if the matter is re the file of the ld. CIT(E), with a direction condonation of delay and if delay is condoned, then shall adjudicate the application afresh on merits, including the issue of amendment of the Memorandum of accordance with law. 5.2 In view of the foregoing discussion, the impugned order of the ld. CIT(E) is set aside and the matter is remanded to his file for fresh adjudication in accordance with law. the assessee are accordingly allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/ (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Provided that where the application is filed beyond the time clause (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and ch application shall be deemed to have been filed within time. he assessee has expressed its willingness to move such an application before the ld CIT(E) , in our considered view, the ends of substantial justice would be met if the matter is re the file of the ld. CIT(E), with a direction to examine the petition of condonation of delay and if delay is condoned, then shall adjudicate the application afresh on merits, including the issue of amendment of the Memorandum of Association, strictly in accordance with law. In view of the foregoing discussion, the impugned order of the ld. CIT(E) is set aside and the matter is remanded to his file for ication in accordance with law. The grounds of appeal of essee are accordingly allowed for statistical purposes. In the result, the appeal of the assessee is allowed for ounced in the open Court on 30/09/2025. Sd/- Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Lancer Foundation 5 ITA No. 5028/MUM/2025 Provided that where the application is filed beyond the time clause (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and ch application shall be deemed to have been filed within time.” he assessee has expressed its willingness to move such n our considered view, the ends of substantial justice would be met if the matter is restored to to examine the petition of condonation of delay and if delay is condoned, then, the ld. CIT(E) shall adjudicate the application afresh on merits, including the Association, strictly in In view of the foregoing discussion, the impugned order of the ld. CIT(E) is set aside and the matter is remanded to his file for The grounds of appeal of essee are accordingly allowed for statistical purposes. In the result, the appeal of the assessee is allowed for /09/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Mumbai; Dated: 30/09/2025 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// Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Lancer Foundation 6 ITA No. 5028/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "