Income Tax clarification on Authority to Condone Delay in Filing Form 10A under Section 12A

The Central Board of Direct Taxes (CBDT) recently issued a circular clarifying the power to condone delay in filing Form No. 10A, section 12A(1)(ac)(i), of the Income Tax Act, 1961.

Section 12A of the Income Tax Act, 1961, lays down the conditions for the applicability of sections 11 and 12. According to section 12A(1)(ac)(i), any trust or institution seeking registration is required to submit an application in Form 10A within the prescribed time limit.

However, the board said, starting October 1, 2024, a new provision has been added which allows the Principal Commissioner or Commissioner of Income Tax to condone any delay in filing this application, subject to certain conditions. The following is the new provision:

“12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled: namely:-

Provided that where the application is filed beyond the time allowed in subclause (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time.”

The government further clarified that as per Rule 17A(5) of the Income-tax Rules, 1962 and the relevant government notifications issued in 2021 and 2022, the Director of Income Tax (Centralised Processing Centre), Bengaluru (CPC), is the official authority responsible for granting registration when an application is made in Form 10A under section 12A(1)(ac)(i) of the Income-tax Act.

However, there has been confusion about who has the power to approve delays if Form 10A is filed late. Specifically, it was unclear whether this power lies with the jurisdictional Principal Commissioner / Commissioner of Income-tax, or the Director of Income Tax (CPC), Bengaluru.

To resolve this issue, the Board has made it clear that if a trust or institution submits Form 10A after the deadline, the Principal Commissioner of Income-tax or Commissioner of Income-tax with jurisdiction over the area can approve the late filing.

This move aims to reduce genuine hardship for trusts/institutions and ensure that eligible entities are not denied registration just because of a delay in filing.