Entity registration pre-2020 amendment entitled to five-year s.12AB(1)(ac)(vi) period; misfiled Form 10AB quashed, continuity for AY2021-26

Whether an entity registered before the 2020 amendment is entitled to a five-year registration period under section 12AB(1)(ac)(vi): holding that the pre-amendment registration entitles the entity to registration for five years (A.Y. 2021-22 to 2025-26) rather than three, because the statutory provision applies to entities already registered prior to the amendment; directed the CIT(E) to grant registration for A.Y. 2021-22 to 2025-26. Whether an inadvertent/formal misfiled Form 10AB and ensuing ex parte rejection affects entitlement for A.Y. 2024-25: holding that the misfiled application and consequent Form 10AD (11.09.2023) are quashed where valid registration for A.Y. 2024-25 exists; directed the CIT(E) to verify existing registrations and allow continuity of registration for A.Y. 2024-25.

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1. ISSUES PRESENTED AND CONSIDERED

1) Whether the delay of 615 days in filing the appeal was supported by bona fide and genuine reasons warranting condonation.

2) Whether an additional ground seeking (i) correction of the tenure of registration available to an entity already registered prior to the 2020 amendment, and (ii) withdrawal/quashing of an inadvertently filed Form 10AB for an assessment year already covered by existing registration, could be admitted and allowed as a pure legal issue on available record.

3) Whether, on merits, the entity already registered prior to the 2020 amendment was entitled to registration for five years (A.Y. 2021-22 to 2025-26) rather than three years (A.Y. 2021-22 to 2023-24) as earlier granted.

4) Whether the rejection order in Form 10AD, passed on an inadvertently filed Form 10AB for A.Y. 2023-24 (an year already covered by existing registration), should be quashed to prevent denial of exemption otherwise available.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Condonation of 615 days' delay

Interpretation and reasoning: The Court considered the affidavit explaining that the tax matters were handled through e-proceedings by a chartered accountant having access to the portal/e-mail, that the trust authorities were unaware of the adverse order when it was passed, and that the delay arose from lack of timely advice and subsequent discovery of the rejection only later during correspondence relating to a later registration cycle. The Court weighed the objection that the reasons were not reasonable against the material placed on record.

Conclusion: The Court held the delay to be for bona fide and genuine reasons, condoned the delay, and proceeded to decide the appeal on merits.

Issue 2: Admissibility of additional ground seeking withdrawal/quashing and correction of registration tenure

Legal framework (as discussed by the Court): The Court applied the principle that a purely legal issue can be raised for the first time before an appellate authority when all necessary facts are already on record and no further factual verification is required.

Interpretation and reasoning: The additional ground concerned (i) the legal consequence of the entity's pre-amendment registration status on the length of registration, and (ii) the legal effect of an inadvertent selection of assessment year while filing Form 10AB despite an existing registration covering that year. The Court found the issue to be purely legal, based on undisputed record facts, requiring no further inquiry.

Conclusion: The additional ground was admitted for adjudication and was decided on merits in the assessee's favour as set out under Issues 3 and 4.

Issue 3: Correct tenure of registration for an entity registered prior to the 2020 amendment

Legal framework (as discussed by the Court): The Court examined the post-amendment scheme referred to in the order and the applicability of the provision under which pre-existing registrants were to apply in Form 10A and be eligible for registration for a five-year period.

Interpretation and reasoning: The Court found that the entity was already registered prior to the legislative amendment and therefore was eligible for registration for five years starting from A.Y. 2021-22. It noted that only a three-year period had been allowed, which the Court held to be inconsistent with the entitlement arising from the pre-amendment registration status.

Conclusion: The Court directed the authority to allow registration from A.Y. 2021-22 to A.Y. 2025-26, thereby allowing the first issue raised in the additional ground.

Issue 4: Whether inadvertent Form 10AB for A.Y. 2023-24 and consequent Form 10AD rejection should be quashed

Interpretation and reasoning: The Court found as fact that the entity already held registration covering A.Y. 2023-24, and that filing Form 10AB for A.Y. 2023-24 occurred due to an inadvertent mistake in selecting the assessment year in the drop-down menu. The Court reasoned that maintaining the rejection flowing from this mistaken application would debar the entity from claiming exemption for A.Y. 2023-24, even though it was otherwise eligible by virtue of the existing registration already granted for that period. Given these circumstances and the specific prayer to treat the mistaken application as withdrawn, the Court held the rejection order could not be sustained.

Conclusion: The Court quashed the Form 10AB filed for A.Y. 2023-24 and the consequent order in Form 10AD dated 11.09.2023, thereby allowing the second issue in the additional ground.

Disposition of original grounds

The grounds contained in the memorandum of appeal were not pressed and were dismissed as not pressed, while the appeal was partly allowed based on the additional ground reliefs.

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