The Central Board of Direct Taxes (CBDT) has clarified that the jurisdictional Principal Commissioner of Income Tax (PCIT) or Commissioner of Income Tax (CIT) are responsible for condoning delays in filing Form 10A under the provisions of the Income Tax Act, 1961.

The circular settles a long-standing ambiguity by confirming that the jurisdictional Principal Commissioner of Income Tax (PCIT) or Commissioner of Income Tax (CIT) is the competent authority to condone delays in filing Form 10A for registration under Section 12A(1)(ac)(i).

This clarification becomes crucial as the Centralized Processing Centre (CPC), Bengaluru, while responsible for processing and granting registrations, does not hold the power to condone such delays. The absence of clarity earlier had led to confusion among applicants and inconsistent handling of delayed applications.

Background of the Issue

Section 12A of the Act lays down the conditions for availing tax exemptions under Sections 11 and 12 for charitable or religious trusts. Entities seeking registration are required to file Form 10A within prescribed timelines.

A proviso introduced with effect from October 1, 2024, empowered tax authorities to condone delays if there was a “reasonable cause.” However, uncertainty persisted regarding whether this power rested with CPC Bengaluru or jurisdictional officers.

Relief for Trusts and Institutions

Addressing this concern, the CBDT has now explicitly vested the condonation power with the jurisdictional PCIT/CIT. The Board emphasized that this step is intended to prevent genuine trusts from being denied registration benefits solely due to procedural delays.

Applicability of the Circular

The circular provides broad relief by stating that:

• It will apply to all cases where Form 10A was filed beyond the prescribed time limit, and
• Where applications for condonation are either pending or filed on or after the date of issuance of the circular.

This ensures that a large number of pending cases can now be resolved without unnecessary litigation or rejection on technical grounds.

Ensuring Ease of Compliance

By removing ambiguity and clearly defining the authority, the CBDT’s clarification is expected to streamline the registration process and improve ease of compliance for the non-profit sector. It also reinforces the government’s intent to support legitimate charitable institutions while maintaining procedural discipline.