ITAT Mumbai Holds Delay In Form 10AB Filing Cannot Defeat Charitable Registration When Activities Are Undisputed

Background

The Income Tax Appellate Tribunal Mumbai Bench has ruled that technical delay in filing Form 10AB cannot be used to deny final registration under Sections 12AB and 80G when the charitable nature and genuineness of activities remain unquestioned. The appeals were filed by Grace Foundation against orders of the Commissioner of Income Tax (Exemptions) rejecting its applications for regular registration solely on the ground that Form 10AB had been filed around eight months beyond the extended deadline prescribed by the CBDT. The trust had earlier enjoyed valid provisional registration under both provisions and approached the department for regularisation during the transition regime introduced by the amended charitable trust framework.

Outcome

Before the Tribunal, the assessee explained that the delay occurred due to bona fide confusion surrounding the new compliance structure, compounded by reliance on professional advisers. The trustee also filed an affidavit affirming the absence of any deliberate lapse. The Bench noted that the transitional phase had witnessed widespread procedural complexity, acknowledged even by the CBDT through repeated extensions of timelines. It further observed that rejection was based purely on limitation, without any adverse finding on the trust’s objects or genuineness of activities. Significantly, the department itself had already granted the trust regular registration under Section 12AB for ten years, effectively accepting its charitable credentials.

Relying on consistent Tribunal precedents, the Bench held that procedural lapses should not override substantive entitlement to charitable benefits. The matter was remanded to the CIT (Exemptions) for fresh consideration on merits, directing acceptance of the application subject to statutory verification.