Procedural lapses should not defeat substantive rights in tax law when genuineness is undisputed.

Revenue by : Shri Prem Prakash Meena, CIT-DR सुनवाई क(cid:9) तारीख/Date of Hearing : 03/06/2025 घोषणा क(cid:9) तारीख /Date of Pronouncement: 04/06/2025 /O R D E R आदेश PER MAKARAND V.MAHADEOKAR, AM:

This appeal by the assessee is directed against the order dated

02.12.2024 passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”] under section 12AA of the Income-tax Act, 1961 [hereinafter referred to as “the Act”], whereby the application of the assessee for final registration in Form No. 10AB was rejected.

Brief Facts of the Case

2. As per the statement of facts submitted by the assessee, the assessee is a public charitable trust duly registered with the office of the Charity Commissioner, Vadodara. The trust had applied for provisional registration under section 12A(1)(ac)(vi) of the Act and under section 80G(5)(iv)(A) on 09.03.2022. The same was granted by the Department on 16.03.2022 and 25.03.2022 respectively. The primary objective of the trust, as per the trust deed, is to undertake charitable activities including medical assistance, educational support, and aid to persons affected by natural calamities and other forms of distress. The assessee commenced its charitable activities on 10.05.2022. The application for final registration in Form 10AB was subsequently filed on 11.06.2024. The CIT(E) issued notices on 10.10.2024 and 07.11.2024 for compliance and clarification. The assessee submitted a detailed reply on 22.11.2024. However, by an order dated 02.12.2024, the CIT(E) rejected the application for final registration on the ground that the assessee had claimed exemption under section 11 in the returns of income for A.Ys. 2022–23, 2023– 24 and 2024–25, thereby violating the conditions laid down under item (B) of sub-clause (vi) of clause (ac) of section 12A(1) of the Act.

3. Aggrieved by the order of CIT(E), the assessee has preferred this appeal raising following grounds:

1. Bonafide Intention and Inadvertent Non-Compliance of Changing Regulatory Framework:

The appellant has at all times acted in good faith and has demonstrated a consistent commitment to compliance with the applicable statutory provisions governing trust registration and tax exemptions.

Pursuant to Section 12A (1)(ac)(iii) of the Income-tax Act, 1961 , the statutory time limit for filing an application for final registration is the earlier of: (a) At least six months prior to the expiry of the provisional registration or approval; or (b) Within six months from the date of commencement of activities.

The appellant commenced its activities on May 10, 2022. The delay in filing the final registration application under Form 10AB was neither intentional nor wilful but resulted from an unintentional oversight regarding the evolving regulatory framework governing trust registrations. However, the appellant has since taken corrective steps and has duly filed Form 10AB on June 11, 2024, in compliance with statutory requirements.

Given the bonafide nature of the appellant’s actions and the absence of any malafide intent, it is submitted that the procedural lapse should not serve as a ground for denying the appellant's rightful claim to final registration under Section 12A .

2. Genuineness of Activities Not Questioned:

The Commissioner of Income Tax (Exemption) has not questioned the genuineness of the appellant's activities. The trust has provided all required documents and responded diligently to the inquiries raised by the department, demonstrating transparency in its functioning.

3. Procedural Delay Should Not Result in Denial of Exemption:

The delay in filing Form 10AB was purely procedural and was not indicative of any failure in meeting the substantive requirements of registration. Procedural lapses