2026 (1) TMI 1574 - AT - Income Tax

Condonation of delay in registration applications requires reasonable cause, evidence review and a fresh hearing on merits.

Proviso to clause (ac) of section 12A(1) permits the Principal Commissioner or Commissioner to condone delay in filing an application for registration ... Rejection of application for registration u/s 12AB filled belated - Commissioner Power to condone delay in filing application for registration under section 12A(1)(ac) - Whether the Commissioner may condone delay in filing the application for registration under section 12A(1)(ac) and the consequences for the pending order? - HELD THAT: - The Tribunal found that a proviso inserted w.e.f. 01.10.2024 in section 12A(1)(ac) empowers the Principal Commissioner or Commissioner to condone delay where an application is filed beyond the time allowed, if there is a reasonable cause for the delay. In view of that power, the Tribunal set aside the rejection order and remanded the matter to the CIT, Exemption, Pune with a direction to consider condonation of delay and decide the registration application afresh in accordance with law. The Tribunal also directed that the assessee be given a reasonable opportunity of hearing and be required to respond to notices and furnish documents and authorities without seeking adjournments, failing which the Commissioner may proceed to pass appropriate orders. [Paras 4, 5] Final Conclusion: The Tribunal allowed the appeal for statistical purposes, set aside the CIT's rejection, and remanded the matter to the CIT, Exemption, Pune with directions to consider condonation of the delay and to decide the registration application afresh after affording the assessee a reasonable opportunity of hearing and compliance with notices. Issues: (i) Whether delay in filing application for registration under section 12A(1)(ac) can be condoned by the Commissioner in view of the proviso inserted w.e.f. 01.10.2024 and related facts including CBDT circular relaxation; and (ii) whether the matter should be remitted for fresh decision after condonation.Analysis: The legal framework comprises clause (ac) of section 12A(1) of the Income-tax Act, 1961 which requires application for registration in the prescribed form and includes a proviso empowering the Principal Commissioner or Commissioner to condone delay if there is a reasonable cause. The record discloses provisional registration and an application filed with a short delay after the period for which CBDT Circular No. 7/2024 dated 25.04.2024 had given relaxation. The discretionary power under the proviso to condone delay is applicable where reasonable cause is shown; the appropriate exercise of that discretion requires consideration of the facts, relevant documents and opportunity of hearing. The Tribunal found that the Commissioner has jurisdiction to condone the delay and that, given the factual materials and the CBDT circular, the matter ought to be reconsidered with an opportunity to the applicant to furnish evidence and submissions.Conclusion: (i) The delay in filing the registration application is capable of being condoned under the proviso to section 12A(1)(ac) and the matter is remitted for fresh decision on merits after condoning delay where appropriate; (ii) The remand is directed with a requirement to grant reasonable opportunity of hearing and consider the CBDT circular and other supporting material. This conclusion is in favour of the assessee.