SRISIVAKESAVA SRIDATTA KSHETRA SEVA SAMAJAM,PRAKASAM V. ITO., WARD-1, ONGOLE

ITA 894/HYD/2025

AI Insights

The case involves appeals by Srisivakesava Sridatta Kshetra Seva Samajam against the orders of the Commissioner of Income Tax (Exemptions), which rejected the society's applications for regular registration under Sections 12AB and 80G of the Income-tax Act, 1961. The primary contention was the rejection based on the alleged delay in filing Form 10AB. The Tribunal found that the CIT (Exemptions) had not adequately considered the merits of the case or the documents submitted by the society and had not provided an opportunity to explain the delay. The Tribunal noted that procedural lapses should not defeat substantive rights, particularly in matters concerning charitable trusts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716518 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: misc
• Appeal Filed On: 14-05-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Period of limitation; Search and seizure; Competent authority; Charitable institution; Time period of passing order; Procedural lapse
• Section: 12A; 119(2)(b); 80G

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad “B” Bench, Hyderabad श्री रवीश सूद, माननीय न्याययक सदस्य एवं श्री मिुसूदन सावडिया, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.Nos.893 and 894/Hyd/2025 (निर्धारण वर्ा/ Assessment Year: 2025-26) Srisivakesava Sridatta Kshetra Seva Samajam, Addanki, Prakasam District. PAN : ABVAS5895E Vs. Income Tax Officer, Ward – 1, Ongole. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri C.Subrahmanyam, Advocate राजस्व का प्रतततितित्व/ Department Represented by : Dr. Narendra Kumar Naik, CIT-DR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 06.08.2025 (Hybrid Hearing) घोर्णध की तधरीख/ Date of Pronouncement : 20.08.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The present appeals have been filed by the assessee society against the respective orders passed by the Commissioner of Income Tax (Exemptions) [hereinafter referred to as “CIT(Exemptions)”], dated 12.03.2025 and 17.03.2025 rejecting its applications filed in “Form No. Printed from counselvise.com 2 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam 10AB” for regular registration under Section 12AB and Section 80G(5) of the Income-tax Act, 1961 (for short, “the Act”). 2. We shall first take up the appeal filed by the assessee society in ITA No.893/Hyd/2025, wherein it has assailed the order passed by the CIT(Exemption) declining its application for regular registration u/s 12AB of the Act on the following grounds of appeal before us: “1. The order passed by the Ld. Commissioner of IT (Exemptions) in Form No. 10AD dt. 12.03.2025, rejecting the application for grant of permanent registration u/s 12AB of the IT Act, 1961 is bad in law, and contrary to the facts and circumstances of the case. 2. The Ld. CIT(E) erred in law and on facts in rejecting the application for registration u/s 12AB of the IT Act on the ground of delay in filing Form 10AB by 84 days, without appreciating that as per section 12A(1)(ac) (iii), the application was filed within the prescribed period I.e., within six months from the date of commencement of activities on dt. 28.03.2024 within the statutory time limit. and was thus well within the statutory time limit. 3. Without prejudice to ground no.2, the Ld. CIT(E) has grossly erred in law and on facts in rejecting the application for registration u/s 12AB of the Act on the ground of alleged delay of 84 days in filing the application, without appreciating the bona fides of the appellant's case and the charitable nature of its activities. 4. Without prejudice to Ground No. 2,3 even assuming for a moment but without conceding that there is a delay, however, the Ld. CIT(E) has failed to appreciate that the delay in filing Form No. 10AB is covered under the proviso to section 12A (1) (ac), which was inserted with effect from dt.01.10.2024, thereby conferring discretionary powers upon the competent authority to condone the delay in deserving cases. 5. Without prejudice to the above, the impugned order is not in order by failure to consider that the appellant is engaged in charitable activities and in line with the objects of the trust. 6. For the aforesaid reasons and such other grounds as may be urged at the time of hearing, the appellant respectfully prays that the impugned order dt.12.03.2025 be quashed and set aside, and the Ld. CIT(E) be directed to Printed from counselvise.com 3 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam grant permanent registration u/s 12AB of the IT Act, 1961, in the interest of justice.” 2. Succinctly stated, the assessee society was established with the primary objective of engaging in charitable activities such as relief of the poor, education, medical relief, advancement of other objects of general public utility. 3. On a perusal of the record, it transpires that the assessee trust was granted provisional registration in “Form 10AC” by the CPC, Bangalore on 04.09.2022, valid for three assessment years i.e. A.Y. 2023-24 to A.Y. 2025-26. 4. Subsequently, the assessee society filed an application in “Form 10AB” on 22-09-2024 seeking regular registration under Section 12AB of the Act. 5. In response, the CIT (Exemptions) initiated proceedings under Section 12A(1)(ac)(iii) of the Act and issued notices dated 03-12-2024 and 12-02-2025, to which the assessee society duly responded with complete documentation and clarifications. However, the CIT (Exemptions), vide his impugned order dated 12-03-2025, rejected the application for the reason that the same was filed beyond the limitation period prescribed under the Finance Act, 2020 and CBDT Circular No. Printed from counselvise.com 4 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam 7/2024 dated 25-04-2024, which had extended the deadline till 30-06- 2024. Accordingly, the CIT (Exemption) held the application filed by the assessee society for regular registration on 22-09-2024 as barred by limitation. 6. Ostensibly, the assessee society has assailed the order passed by the CIT(Exemption) for its regular registration under Section 12AB of the Act based on its multi-facet grounds, viz. (i). the CIT(Exemption) had grossly erred in law and facts of the case in mechanically rejecting the application without affording any opportunity to the assessee society to explain the delay; (ii). the issuance of notices by the CIT (Exemption) even after the expiry of the limitation period, thereby gave rise to a bona fide belief to the assessee society that its application was valid and accepted; (iii). that the CIT(Exemption) had not drawn any adverse findings on the merits or documents filed by the assessee society; and (iv). that the CIT (Exemption) has failed to exercise the discretion vested with him under the proviso to Section 12A(1)(ac) for condoning the delay involved in the application filed by the assessee society. 7. We have heard the Ld. Authorized Representatives for both parties, perused the order of the CIT(Exemption) and the judicial Printed from counselvise.com 5 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam pronouncements pressed into service by the Ld. AR to drive home his contentions. 8. Admittedly, the application for regular registration was filed by the assessee society on 22-09-2024, i.e., beyond the extended due date of 30-06-2024 as per the CBDT Circular No. 7/2024. However, we cannot remain oblivion of the fact that the CIT (Exemptions) had thereafter issued notices on 03-12-2024 and 12-02-2025, seeking additional details and documents, to which the assessee society had responded. 9. We are of firm conviction that the issuance of notices after the prescribed deadline, without any objection as to limitation at that stage, gave rise to an expectation and bona fide belief to the assessee society that the delay had either been condoned or was not material. In our view, in the backdrop of the aforesaid facts, the CIT(Exemption) ought to have given the assessee society an opportunity to explain the delay involved in filing of the application before him. 10. Apart from that, we find that the impugned order does not record any defect either in the activities or objects of the assessee society or the documents submitted. Also, the bona fides of the assessee society Printed from counselvise.com 6 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam are not in dispute, and the delay in filing the application, in our considered view, prima facie, does not appear to be deliberate. 11. We find that the legislature in all its wisdom had vide the Finance Act, 2024 from 01.10.2024 made available on the statute a “Proviso” to Section 12A(1)(ac) that formally allows the CIT(Exemption) to condone the delay if reasonable cause is shown, which, thus, renders the application valid and deemed to be filed on time. We thus, in terms of our aforesaid deliberations, are of the considered view that the matter deserves to be restored to the file of the CIT (Exemptions), Hyderabad for fresh consideration. The assessee society shall remain at liberty to file an application for the condonation of the delay involved in the filing of the present application in “Form 10AB” seeking regular registration under Section 12AB of the Act. The CIT (Exemptions), Hyderabad shall consider such application in accordance with the extant law and dispose of the same after granting a reasonable opportunity of being heard to the assessee society. 12. Resultantly, the impugned order dated 12-03-2025 is set aside and the matter is restored to the file of the CIT (Exemptions), Hyderabad for fresh adjudication, as per law. Printed from counselvise.com 7 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam 13. In result, the appeal filed by the assessee society is allowed for statistical purposes in terms of our aforesaid observations. ITA 894/HYD/2025 : 14. We shall now deal with the appeal filed by the assessee society in ITA 894/Hyd/2025, wherein it has assailed the rejection of its application for registration by the CIT(Exemptions), Hyderabad, on the following grounds of appeal before us: “1. The order passed by the Ld. Commissioner of IT (Exemptions) in Form No. 10AD dt. 12.03.2025, rejecting the application for grant of permanent registration u/s 12AB of the IT Act, 1961 is bad in law, and contrary to the facts and circumstances of the case. 2. The Ld. CIT(E) erred in law and on facts in rejecting the application for registration u/s 12AB of the IT Act on the ground of delay in filing Form 10AB by 84 days, without appreciating that as per section 12A(1)(ac) (iii), the application was filed within the prescribed period I.e., within six months from the date of commencement of activities on dt. 28.03.2024 within the statutory time limit. and was thus well 3. Without prejudice to ground no.2, the Ld. CIT(E) has grossly erred in law and on facts in rejecting the application for registration u/s 12AB of the Act on the ground of alleged delay of 84 days in filing the application, without appreciating the bona fides of the appellant's case and the charitable nature of its activities. 4. Without prejudice to Ground No. 2,3 even assuming for a moment but without conceding that there is a delay, however, the Ld. CIT(E) has failed to appreciate that the delay in filing Form No. 10AB is covered under the proviso to section 12A (1) (ac), which was inserted with effect from dt.01.10.2024, thereby conferring discretionary powers upon the competent authority to condone the delay in deserving cases. 5. Without prejudice to the above, the impugned order is not in order by failure to consider that the appellant is engaged in charitable activities and in line with the objects of the trust. Printed from counselvise.com 8 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam 6. For the aforesaid reasons and such other grounds as may be urged at the time of hearing, the appellant respectfully prays that the impugned order dt.12.03.2025 be quashed and set aside, and the Ld. CIT(E) be directed to grant permanent registration u/s 12AB of the IT Act, 1961, in the interest of justice.” 15. Succinctly stated, the assessee society was granted provisional registration under Section 80G of the Act by the Central Processing Centre (CPC) in “Form No. 10AC” dated 04-09-2022, valid for the period from AY 2023–24 to AY 2025–26. 16. The assessee society in accordance with the provisions of the amended Section 80G r.w Rule 11AA, had filed its application for regular registration in “Form No. 10AB” on 22-09-2024. During the course of proceedings under Section 80G(5)(iii), the CIT(Exemptions) issued notices dated 03-1-2024 and 17-02-2025. In compliance, the assessee society filed the requisite details/information. 17. However, the CIT(Exemptions) rejected the said application vide order dated 17-03-2025 on the ground that the assessee society had failed to apply for regular registration within the prescribed time limit. It was observed by him that as per the amended provisions introduced by the Finance Act, 2020, an application in “Form No. 10AB” should be filed at least six months prior to the expiry of the provisional registration or within six months from the commencement of its activities, whichever is earlier. Printed from counselvise.com 9 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam 18. The CIT(Exemptions) further observed that the CBDT vide Circular No. 7/2024 dated 25-04-2024 had extended the “due date” for filing Form No. 10A/10AB till 30.06.2024. However, as the assessee society had filed its application in “Form 10AB” on 22-09-2024, therefore, it was time-barred. Accordingly, the CIT(Exemptions) rejected the application filed by the assessee society for regular registration under Section 80G of the Act on the ground of the delay involved in filing of the same. 19. Aggrieved, the assessee society has carried the matter in appeal before us. 20. We have heard the Ld. Authorised Representatives of both parties, perused the orders of the lower authorities and the material available on record. 21. The Ld. Authorised Representative (for short, “Ld. AR”) for the assessee society, submitted that the delay in filing the application in “Form No. 10AB” was inadvertent and not deliberate. The Ld. AR submitted that the assessee society had already been granted provisional registration and had thereafter complied with all statutory requirements. Elaborating further on his contention, the Ld. AR submitted that the delay in filing the application for regular registration Printed from counselvise.com 10 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam was only procedural and should not defeat its substantive claim under Section 80G of the Act. The AR also contended that the assessee society had filed complete details before the CIT(Exemptions), which demonstrated the genuineness of its activities. 22. Per Contra, the learned DR supported the order of the CIT(Exemptions) and submitted that the time limit prescribed under the law is mandatory in nature, and the CIT(Exemptions) has no discretion to condone the delay in filing of “Form 10AB”. 23. We have heard the Ld. Authorized Representatives for both parties and perused the material available on record. 24. Admittedly, the assessee society was granted provisional registration under Section 80G and had filed “Form 10AB” for regular registration on 22-09-2024. As observed by us hereinabove, the CBDT, vide Circular No. 7/2024 dated 25.04.2024, had extended the “due date” for filing such application till 30.06.2024, therefore, there can be no denying the fact that the application filed by the assessee society was beyond the prescribed time limit. 25. Although the delay in filing the application for regular registration under Section 80G in “Form 10AB” is procedural in nature, and the Printed from counselvise.com 11 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam assessee society had otherwise demonstrated the genuineness of its charitable activities, but we are afraid that the provisions of the Act read alongwith the CBDT Circular No. 7/2024 (supra) are clear on the prescribed time limit in so far the filing of an application for regular registration in “Form 10AB” under Section 80G of the Act is concerned. However, we are at the same time of a firm conviction that procedural lapses should not defeat the substantive rights, particularly in matters of charitable trusts seeking exemptions. Although there is no explicit provision under the Income-tax Act or rules for condonation of delay in filing of “Form 10AB” for regular registration under Section 80G of the Act, but the assessee society remains at liberty to seek the condonation under Section 119(2)(b) of the Act. Thereafter, the CIT(Exemptions) is directed to take up and dispose of the application filed by the assessee society for regular registration under Section 80G of the Act, on merits, in accordance with law and after providing due opportunity of being heard. 26. Resultantly, the appeal of the assessee society is allowed for statistical purposes in terms of our aforesaid observations. Printed from counselvise.com 12 ITA Nos.893 and 894/Hyd/2025 Srisaivakesava Sridatta Kshetra Seva Samajam 27. To sum up, both the appeals of the assessee society are allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the Open Court on 20th August, 2025. Sd/-(श्री मिुसूदन सावडिया) (MADHUSUDAN SAWDIA) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Hyderabad, dated 20.08.2025. TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Srisivakesava Sridatta Kshetra Seva Samajam, D.No.32-65, SBI Colony, Addanki, Prakasam District – Pin -523201, Andhra Pradesh, India. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward – 1, Ongole. 3. The Principal Commissioner of Income Tax (Exemptions), Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, / DR, ITAT, Hyderabad. 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad. Printed from counselvise.com "