The Central Board of Direct Taxes has issued Circular No. 01/2026, clarifying the authority responsible for condoning delays in filing Form No. 10A under Section 12A of the Income Tax Act, 1961.
Background
Section 12A of the Income Tax Act lays down the conditions for availing tax exemptions under Sections 11 and 12, which apply to charitable and religious trusts. As per existing provisions, trusts seeking registration must file an application in Form 10A within the prescribed timeline.
However, delays in filing such applications have been a recurring issue, leading to concerns over denial of benefits due to procedural lapses.
Key Clarification by CBDT
To address this ambiguity, the CBDT has clarified that:
- The jurisdictional Principal Commissioner of Income-tax (PCIT) or Commissioner of Income-tax (CIT) shall have the authority to condone delays in filing Form 10A.
- This clarification is issued under the powers granted by Section 119(2)(b) of the Act to mitigate genuine hardship.
Legal Context
Earlier, a proviso inserted with effect from October 1, 2024, empowered tax authorities to condone delays if there was a "reasonable cause." However, confusion persisted because:
- The Director of Income Tax (Centralized Processing Centre), Bengaluru, was designated as the authority for processing Form 10A applications.
- It was unclear whether the CPC or jurisdictional authorities could condone delays.
The latest circular resolves this conflict by clearly assigning the condonation power to jurisdictional PCIT/CIT.
Applicability
The circular will apply to:
- All cases where Form 10A has been filed after the prescribed deadline
- Applications for condonation that are pending or filed on or after the date of issuance of the circular
Impact on Trusts and Institutions
This clarification is expected to:
- Prevent denial of tax exemption benefits due to technical delays
- Provide relief to genuine charitable institutions
- Streamline the registration process under Section 12A
Tax experts believe this move will improve compliance and reduce litigation involving procedural delays.
Click here to access the offical copy of the circular
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