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Facts
The assessee, an old trust, inadvertently filed an application for 80G registration under the wrong section due to a technical glitch on the e-filing portal. This led to the CIT(E) rejecting the application as withdrawn, despite the assessee's attempt to rectify the mistake.
Held
The Tribunal held that the delay and the incorrect section filing were not deliberate but due to technical issues and manpower limitations. Considering the beneficial objects of the trust and CBDT circulars, the Tribunal found the assessee entitled to relief.
Key Issues
Whether the CIT(E) was justified in rejecting the assessee's application for 80G registration as withdrawn due to a mistake in filing the wrong section, and whether the delay in filing should be condoned.
Sections Cited
80G, 12A, 80G(5)(ii), 80G(5)(iii)
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI
Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 13/06/2025 passed by Ld.CIT(Exemption), rejecting the application of the assessee for registration u/s.80G as withdrawn. The assessee raised following ground of appeal :
2 ITA 5003/Mum/2025; A.Y. 2025-26 Rotary District 3141 District Welfare Fund “ Ground 1. The learned CIT(E) erred in rejecting the Application in Form No. 10AB dated 05.10.2024 for section 80G approval treating the application as withdrawn for the reason that the application was erroneously filed under wrong section and the applicant has filed a fresh application under correct clause. Ground 2. The learned CIT(A) erred in misinterpreting the letter dated 5/6/2025 as Withdrawal of assessee's application dated 5/10/2024. The assessee prays to re-instate the above said application and re-consider the same. Ground 3. Your appellant prays that the application for 80G renewal in form 10AB may kindly be reinstated and your appellant be allowed correction of any defect in mentioning the relevant section/ clauses of the Act in the said application. Ground 4. The Appellant craves leave to add, alter modify OR 4 DLEETE one OR more ground before OR at the time of hearing of Appeal.” Brief facts of the case are as under:
The assessee was granted provisional registration u/s 80G on 06.04.2022 from 06.04.2022 to AY 2024-25. The provisional registration expired on 31.03.2024. The assessee were required to make application for permanent registration on or before 31st March 2024. However, due to absence of permanent full-time employees and yearly rotation of the Trustees, the assessee inadvertently failed to make the application for final registration within the prescribed time. The application was eventually filed on 05.10.2024 vide. 2.1 Further the assessee submitted that on receipt of notice and on verification of records and forms filed, they realised that the form was erroneously filed under section 80G(5)(ii) instead of the correct provision section 80G(5)(iii). The assessee was thus trying to rectify the said mistake to file the correct form, but the respective clause was not visible under the form pertaining to the 3 ITA 5003/Mum/2025; A.Y. 2025-26 Rotary District 3141 District Welfare Fund Asst. year 2025-26. The assessee was under the process of getting the same resolved by connecting to the e-filing portal team. The assessee thus requested Ld. CIT(E) to grant some time for the same rectify the mistake by filing fresh application. 2.3 The Ld.CIT(E) rejected the application by observing as under:- “The applicant, vide request letter dated 05.06.2025, has stated that it seeks to withdraw the Application in Form 10AB dated 05.10.2024 for 80G approval on the ground that the application has erroneously filed under wrong section and the applicant has filed a fresh application under correct clause. Hence, this Application in Form 10AB is rejected as withdrawn.
3. In conclusion, this application for grant of registration stands rejected as withdrawn.”
The Ld.AR submitted that, the Ld.CIT(E) rejected application in form 10AB dated 05/10/2024 wherein the assessee was seeking renewal of registration under the new regime. He submitted that, the assessee filed letter dated 05/06/2025 wherein, the assessee submitted that it had erroneously filed application u/s.80G(5)(ii) instead of 80G(5)(iii). It was submitted that the assessee was not able to uphold the application under the correct section due to technical glitch on the e-filing portal. It was submitted that the assessee had accordingly sought some time to rectifying the some mistake, which was treated by the Ld. CIT(E) erroneously, as withdrawal by the assessee. 3.1 The Ld.AR submitted that, the assessee is very old trust and was granted provisional registration under 80G on 06/04/2022 which was valid from 06/04/2022 to assessment year 2024-25. It was submitted that, the provisional registration expired on 21/03/2024, however, due to the absence of permanent full time
4 ITA 5003/Mum/2025; A.Y. 2025-26 Rotary District 3141 District Welfare Fund employee and yearly rotation of the assessee failed to even time prescribe of the assessee eventually filed on 05/10/2024. 3.2 The Ld.AR thus submitted that above two issues have been wrongly considered by the Ld. CIT(E) without having regards to the fact that the assessee is a existing trust that had a valid 12A registration. He thus submitted that the assessee may be remitted back to the Ld. CIT(E) with appropriate direction for necessary consideration of the facts.
3.3 On the contrary, the Ld.DR relied on the orders passed by the authorities below.
We have perused the submissions advance by both sides in the light of record placed before us.
From the record placed before us, it is clear that, the delay was neither deliberate nor mala fide but was due to the difficulty that assessee did not have dedicated manpower to keep track of the procedures in any event it is noted that after filing the application belatedly beyond the time permitted by the CBDT there were other issue that could not be reserved due to technical glitch in the portal. It is noted that the assessee is a charitable trust, and had complied with the statutory requirements and filed the renewal application immediately upon noticing the lapse. The explanation offered has not been found to be false, revenue has not been able to file any document contrary to the submissions made by the Ld.AR. 4.1 In our view, refusal to condone the delay would result in grave financial hardship to the assessee, which is a very old trust, especially when the demand has arisen solely on account
5 ITA 5003/Mum/2025; A.Y. 2025-26 Rotary District 3141 District Welfare Fund of a technical lapse. Considering its beneficial object and the CBDT circular empowering condonation in genuine cases, we are satisfied that the assessee is entitled for relief on account of delay. 4.2 It is noted that the assessee is admittedly an old trust having a valid registration under section 12A and 80G. It is also noted that while filing Form for final registration in Form 10AB has inadvertently mentioned the wrong section as sub- clause (B) of clause (iv) of first proviso to subsection (5) of section 80G instead of clause (iii) of first proviso to subsection (5) of section 80G 4.3 From the perusal of provisions applicable to the facts of present case, in our considered view, there is merit in claim of the Ld. AR that assessee selected the wrong section code inadvertently while filing the application for final registration in Form 10AB 4.4 In view of these we remit the issue back to the file of Ld.CIT(E), with a direction to consider the application under Clause (iii) to first proviso to section 80G(5) of the Act, and to decide the application of the assessee for final approval as possible before the expiry of the provisional approval granted in order to enable the assessee to have the benefit of section 80G without any break. Accordingly the grounds raised by the assessee stands allowed. In the result the appeal filed by the assessee stands allowed.
6 ITA 5003/Mum/2025; A.Y. 2025-26 Rotary District 3141 District Welfare Fund Order pronounced in the open court on 27/10/2025