Delay in filing Form 10AB must be condoned when registration

Delay in filing Form 10AB must be condoned when registration is rejected without checking charitable merits.

Issue

Whether the CIT(Exemption) is legally justified in summarily rejecting an application for final approval under Section 80G(5) solely on the grounds of a technical delay, without quantifying the delay or examining the genuineness of the trust’s charitable activities and its existing Section 12A registration.

Facts

The assessee-trust/society had already obtained provisional approval under Section 80G(iv) and held a valid registration under Section 12A.
Seeking final approval, the assessee filed Form 10AB under the provisions of Section 80G(5)(iii), asserting that it was engaged in genuine charitable activities.
The CIT(Exemption) rejected the final approval application on the sole ground that it was submitted beyond the prescribed statutory timeline.
In the rejection order, the CIT(Exemption) failed to specify the exact number of days of delay.
The CIT(Exemption) did not examine, evaluate, or record any objective findings regarding the trust’s charitable objects, the genuineness of its activities, or the basic statutory conditions outlined under Section 80G(5).

Decision

Rejection Deemed Perverse: Held, yes. The summary rejection by the CIT(Exemption) was perverse and legally unsustainable because he failed to analyze the core statutory conditions or explain why approval should be denied to an entity already registered under Section 12A.
Condonation and Remand Ordered: Held, yes. The procedural delay in filing the final application is ordered to be condoned, and the matter is remanded back to the CIT(Exemption) with a directive to examine the application afresh on its merits.

Key Takeaways

Substance Over Technicality: Procedural or timeline delays in filing Form 10AB should not result in an automatic, summary rejection if the entity holds valid provisional approvals and handles genuine charitable operations.
Requirement of a Speaking Order: The CIT(Exemption) cannot issue a blanket rejection based on delay without clearly quantifying the period of limitation exceeded and providing a reasoned order.
Weight of Section 12A Registration: When a trust is already recognized as a genuine charitable entity under Section 12A, the authorities must actively evaluate the core merits of the Section 80G application rather than dismissing it on initial technicalities.

IN THE ITAT RAIPUR BENCH

Gram Bartori Vikas Shikshan Samiti

Commissioner of Income-tax (Exemption)

Partha Sarathi Chaudhury, Judicial Member
and Avdhesh Kumar Mishra, Accountant Member

IT Appeal No. 292 (RPR) of 2026

MAY 22, 2026

Suryakant Soulakhe for the Appellant. Saad Kidwai, CIT-DR for the Respondent.

ORDER

Partha Sarathi Chaudhury, Judicial Member. – The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Exemption), Bhopal dated 29.03.2026 for the as per the following grounds of appeal:

“1. That on the facts and in the circumstances of the case, the order dated 29.03.2026 passed by the Ld. CIT (Exemption), Bhopal rejecting the application filed in Form 10AB for grant of approval under section 80G(5)(ii) of the Income Tax Act, 1961 is unjust, arbitrary and bad in law and liable to be quashed.

2. That the Ld.CIT (Exemption) has erred in rejecting the application solely on the ground of delay in filing the application for final approval under section 80G(5)(iii), without appreciating that the appellant is engaged in genuine charitable activities.

3. That the Ld. CIT (Exemption) failed to appreciate that the delay in filing the application was neither intentional nor deliberate, but due to bona fide reasons, and therefore deserved to be condoned in the interest of justice.

4. That the Ld. CIT (Exemption) erred in law in holding that he has no power to condone the delay, without considering that procedural provisions should be interpreted liberally in the case of charitable institutions to advance the cause of justice.

5. That the rejection of the application on technical grounds defeats the very purpose of granting exemption to charitable institutions and is against the spirit of the Income Tax Act.

6. That the Ld. CIT(Exemption) failed to consider the objects, activities and genuineness of the appellant trust/society before rejecting the application.

7. That the appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at the time of hearing.”

2. The only issue contested by the assessee through its grounds of appeal is rejection of its application for granting exemption u/s.80G of the Income Tax Act, 1961 (for short ‘the Act’) by the Ld. CIT(Exemption). The application of the assesse was rejected for having been filed late i.e. beyond the time line prescribed by the Revenue authorities. The assessee also had obtained provisional approval u/s.80G(iv) of the Act, dated 21.05.2023 but had not obtained final approval u/s.80G(5)(iii) of the Act and the said authority rejected the application of the assessee solely on the ground that it was filed belatedly.

3. At the time of hearing, the Director of the assessee trust appeared before this Bench and submitted that they have obtained final registration u/s.12A of the Act and that they are doing genuine charitable activities for the development of the tribal and villagers in association with NABARD. Further, elaborating on the activities performed by the assessee trust/society, Authorized Representative submitted that in the State of Chhattisgarh specifically in the District of Korba, they are helping the tribal and farmers for development of farming and produce of cashew and mango in the region which was earlier not heard in the given region. The assessee had also submitted financial report for F.Y.2024-25 relevant to A.Y.2025-26 where the collaboration with NABARD is evident and the assessee is working with great support with NABARD and as per projects implemented. The assessee trust/society initially started from Bilaspur District, now its target group has reached to Districts of Korba, Sakti and Janjgir in the State of Chhattisgarh. The mission of the assessee is to promote sustainable and equitable development by providing viable and sustainable solutions in the sector of education, tribal development, water resources management, women’s empowerment, agriculture training and marketing support.

4. The Ld.CIT(Exemption) before rejecting the application of the assessee for final approval u/s.80G(5)(iii) of the Act has not dealt upon the merits of the matter, has not adjudicated on whether the conditions required for granting exemption had been complied by the assesee but solely rejected the application on the technical ground of delay. In this regard, it would be relevant to extract provisions of Section 80G(5) of the Act which reads as follows:

“80G. (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,—

xxx xxx xxx xxx

(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :—

(i)

where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (23AA) or clause (23C) of section 10 :

Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if—

(a)

the institution or fund maintains separate books of account in respect of such business;

(b)

the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and

(c)

the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;

(ii)

the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose;

(iii)

the institution or fund is not expressed to be for the benefit of any particular religious community or caste;

(iv)

the institution or fund maintains regular accounts of its receipts and expenditure;

(v)

the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, or is an institution financed wholly or in part by the Government or a local authority;

(vi)

in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being 25[approved by the Principal Commissioner or Commissioner;]

(vii)

where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,—

(a)

established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and

(b)

approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009;

[(viii)

the institution or fund prepares such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed:

Provided that the institution or fund may also deliver to the said prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be prescribed; and

(ix)

the institution or fund furnishes to the donor, a certificate specifying the amount of donation in such manner, containing such particulars and within such time from the date of receipt of donation, as may be prescribed:

Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,—

(i)

where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Finance Act, 2020], within three months from the date on which this proviso has come into force;

(ii)

where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period;

(iii)

where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier;

(iv)

in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which the said approval is sought:

Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,—

(i)

where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years;

(ii)

where the application is made under clause (ii) or clause (iii) of the said proviso,—

(a)

call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about—

(A)

the genuineness of activities of such institution or fund; and

(B)

the fulfilment of all the conditions laid down in clauses (i) to (v); and

(b)

after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a),—

(A)

pass an order in writing granting it approval for a period of five years;

(B)

if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its approval after affording it a reasonable opportunity of being heard;

(iii)

where the application is made under clause (iv) of the said proviso, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the registration is sought,

and send a copy of such order to the institution or fund:

Provided also that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the first proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received:

Provided also that the approval granted under the second proviso shall apply to an institution or fund, where the application is made under—

(a)

clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund;

(b)

clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved;

(c)

in any other case, from the assessment year immediately following the financial year in which such application is made.]”

5. The Ld. CIT(Exemption) is required to look into the aforesaid conditions as enumerated in the relevant provisions before granting of exemption u/s. 80G(5) of the Act specifically sub-clause (iii) “the institution or fund is not expressed to be for the benefit of any particular religious community or caste.”. The Ld. CIT(Exemption) before accepting or rejecting the application has to look into all these conditions and deal each of them vis-a-vis facts of the assessee’s case so to provide specific reasoning regarding his final decision. The purpose of exemption provisions arises once such trust or society obtains registration u/s. 12A of the Act from the Department which itself establishes that such trust or society is registered as charitable institution in terms with the Act and therefore, entitled for exemption provisions. That once registration u/s. 12A of the Act is obtained, next step is to get exemption u/s. 80G of the Act whereby any donation that would be received by the said registered trust or society, the doner of such donation shall get specified exemption as per Act on the return of income filed by the said doner. In other words, exemption provides financial support to a registered trust for furtherance of its objectives and at the same time, it is an incentive for the doners to donate in any such trust or institution having exemption u/s.80G of the Act so that the said doner gets benefit of the Act while filing his return of income. The time limit provided in the relevant provision is merely directive in nature and not mandatory. The substantial justice always prevails over procedural laws. We also note the fact that the CBDT through various circulars have extended time limit for filing relevant Form for exemption u/s.80G of the Act considering the fact that there is a transition from manual to electronic mode and lot of assessee’s face hardship in filing relevant application within the due time framed, therefore, it is an admitted fact that even Board provides power to Ld. CIT(Exemption) to condone delay when such delay is genuine and that the trust or the society is genuine.

6. In the present case, the Ld. CIT(Exemption) has not provided any reasoning regarding rejection of the application filed by the assessee. He has not mentioned what are the number of days of delay involved, he has also not given any findings whether he is doubting the genuineness of the activities carried out by the assessee trust/society. He has also not given any findings that when the assessee has permanent registration u/s.12A of the Act then why exemption u/s. 80G should not be granted. He has also not examined the basic conditions on merits for granting exemption as per relevant provisions of the Act. The Ld. CIT(Exemption) has summarily dismissed the appeal of the assessee which itself therefore is perverse, unsustainable and bad in law. Uniform view has been taken by various Tribunal considering amendment by the Finance Bill, 2024, whether the application u/s. 80G(5) after due date be considered within the meaning of Section 80G(5) of the Act and it had been held in favour of the assessee. Same view has been upheld by the Co-ordinate Bench of the Tribunal, Chennai in the case of Mother Leela Trust v. CIT (Exemption (Chennai – Trib.)/ ITA No.1408/Chny/2025, dated 06.10.2025. In the case of Peoples Progress Trust v. CIT (Exemptions) (Hyderabad – Trib.), it was held that though the Commissioner may not have power to condone the delay, the assessee should be afforded opportunity and the matter should be examined on merits after appropriate condonation through proper channel.

7. Reverting to the facts of the present case, the Ld. CIT(Exemption) has not rejected the application on the basis of objects of the assessee trust nor has he doubted the genuineness of the activities of the assessee trust. It was rejected solely on the ground of delay and that too in a summary manner without any reasoning. The Ld. CIT(Exemption) could not have summarily rejected the application without dealing with the merits of the case vis-a-vis relevant provision of the Act. The Co-ordinate Bench of the Tribunal, Surat in the case of N J Charitable Foundation v. CIT (Exemption) 206 ITD 486 (Surat – Trib.), it was held that delay in filing application u/s. 80G(5) of the Act has to be condoned and the matter was remanded to the Commissioner (Exemption) to reconsider the application on merits.

8. Considering the facts and circumstances and on examination of the relevant provisions of the Act a/w. judicial pronouncements, we condone the technical delay of the assessee trust/society in filing application for final approval u/s. 80G(5) of the Act and set-aside the order of the Ld. CIT(Exemption) and restore the matter back to his file to reconsider the said application of the assessee on merits as per applicable legal provisions of the Act while complying with the principles of natural justice. The assessee shall respond to the hearing notices and represent its case on merits before the Ld. CIT(Exemption).

9. That as per above terms, the appeal of the assessee is allowed for statistical purposes.