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Facts
The assessee filed an application for regular approval u/s 80G in Form 10AB, but inadvertently mentioned clause (ii) of the first proviso instead of clause (iii). The CIT(E) rejected the application on this technical ground, leading to the present appeal.
Held
The Tribunal held that the assessee should not be penalized for an inadvertent mistake in quoting the wrong provision. The intention of seeking regular approval was clear. The rejection resulted in a miscarriage of justice.
Key Issues
Whether rejection of an application for 80G approval solely on the ground of an inadvertent technical error in mentioning the wrong section is justified and amounts to miscarriage of justice.
Sections Cited
80G, 10AB, 10AC
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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: MS. PADMAVATHY S & SHRI RAJ KUMAR CHAUHAN
O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order dated 10.03.2025of Learned Commissioner of Income Tax (Exemption), Mumbai [hereinafter referred to as the “CIT(E)”], wherein the application for regular approval u/s 80G was rejected on the ground that Page | 1 SamarpanFoundation the application was filed in Form 10AB under clause (ii) of first proviso to sub section (5) of section 80G of the Act on 23.09.2024 i.e. for extension of provisional approval in Form No.10AC under section 80G(5)(vi) read with clause (i) or clause (iii) of first proviso to sub- section (5) of section 80G of the Act.
Aggrieved by the order of Ld. CIT(E), Assessee preferred the present appeal before us and has raised the following grounds of appeal:-
“1. The Learned CIT (exemption) erred in rejecting the application under 80G. thereby violating the principles of natural justice, not providing an opportunity of being heard is against the principle of natural justice
2.The Learned CIT (Exemptions) erred in rejecting the application solely on a technical error, leaving the appellant without any effective remedy. It is a well-established principle that mere technicalities should not defeat substantive rights. Rejection on such grounds is unjustified and contrary to the principles of fairness and natural justice.
3.That the Appellant craves leave to add, alter, modify, or delete any grounds of appeal at the time of hearing”
We have heard Ld AR and Ld. DR and examined the record. At the outset, Ld. AR submitted that due to clerical mistake while filing online application in Form 10AB inadvertently clause (ii) of first proviso to sub section (5) of section 80G has been mentioned instead of clause (iii) of Page | 2 SamarpanFoundation first proviso to sub section (5) of section 80G of the Act. It is therefore submitted that Ld. CIT(A) has taken a hyper technical view of the matter and has not afforded opportunity to the assessee regarding the said mistake, therefore rejected the application, which resulted into miscarriage of justice because the said mistake is an inadvertent mistake by quoting wrong provision of section. Ld. AR further submitted that Ld. CIT(A) could have considered the said application under clause (iii) of sub section (5) of section 80G of the Act. In support of his arguments, Ld. AR relied on the following case laws wherein in similar situation the Coordinate Bench has restored the matter to the file of Ld. CIT(E) for deciding the matter afresh:- order dated 09.01.2025 (Mum Trib) (ii) order dated 27.01.2025 (Pune Trib) (iii) ITA No. 3520/Mum/2023 order dated 28.02.2024 (Mum Trib) 4. On the other hand, Ld. DR opposed the arguments of Ld. AR and submitted that the Ld. CIT(E) has rejected the application based on the submission made by the assessee in Form 10AB stating that the application is made under section (ii) proviso of sub section (5) of section 80G of the Act. Ld. DR however submitted that case can be remitted back to Ld. CIT(E) to consider the application afresh based on Page | 3 SamarpanFoundation the claim of the assessee that wrong section has been inadvertently mentioned in the Form 10AB.
We have considered the rival submissions of both the parties and examined the record. Assessee has filed paper book containing 67 pages out of which pages 18-19, 80G provisional order and page 20-23, 12AB approval order. On perusal of Form 10AC, it clearly shown that the assessee trust was granted provisional approval on 11.06.2023 which was valid from AY 2024-25 to 2026-27. This provisional approval was required to be regularised by moving an application u/s 12AB in Form 10AB for seeking regular approval u/s 80G(5)(vi) and clause (iii) of proviso 1. The said provision for understanding the matter is extracted below:-
Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,-
(i) xxxx (ii) xxxx (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier: [or] SamarpanFoundation 6. In similar situation, the Ld. Coordinate Bench of ITAT in (supra) has held as under:-
“6. Assessee, in terms of the above provisions, first applied for a provisional approval under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G within and subsequently (refer clause 2 in Form 10A) and was given the provisional registration up to AY 2024-25 on 04.04.2022. In the application for final approval in Form 10AB, it is noticed that assessee has once again mentioned same section i.e. sub-clause (B) of clause (iv) of first proviso to subsection (5) of section SOG whereas the correct section code under which the assessee ought to have selected is clause (iii) of first proviso to subsection (5) of section 80G. We also noticed that ld. CIT(E) has treated the application as one filed under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G and accordingly rejected the application for not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB.
6.1. From the perusal of forms filed and the facts of the case, in our considered view, there is merit in claim of the ld. AR that assessee has selected the wrong section code inadvertently while filing the application for final registration in Form 10AB. Further, we notice that assessee did not have the opportunity of being heard before ld. CIT(E) due to incorrect course of action advised, which otherwise assessee might have explained the facts to avoid the impugned rejection. In view of these discussions and respectfully following the above decision of the Kolkata Bench in the case of North Eastern Social Research Centre (supra), we remit the issue back to the file of ld. CIT(E), with a direction to grant final approval to assessee under Clause (iii) to first proviso to section 80G(5) of the Act, if assessee is otherwise found eligible. We also direct ld. CIT(E) to decide the application of the assessee for final approval as quickly as possible before the expiry of SamarpanFoundation the provisional approval granted in order to enable the assessee to have the benefit of section 80G without any break. It is ordered accordingly.
In the result, appeal of the assessee is allowed for statistical purposes.”
7. Respectfully following the above decision, we are of the considered opinion that the assessee should not be penalised for inadvertent mistake in quoting wrong provision in the application. Even otherwise when the provisional approval was filed alongwith Form 10AB, it was crystal clear before the Ld. CIT(E) that intention of the assessee was to seek regular approval under clause (iii) of first proviso to sub section (5) of section 80G of the Act. The denial of the rejection of application due to inadvertent mistake has resulted into miscarriage of justice. Therefore, we restore the matter to the file of Ld. CIT(E) who shall dispose the matter afresh, with a direction to grant final approval to the assessee under clause (iii) to first proviso of section 80G(5) of the Act, if assessee is otherwise found eligible. We also direct Ld. CIT(E) to decide the application of the assessee for final approval as quickly 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. It is ordered accordingly.
SamarpanFoundation 8. In the result, the appeal filed by the assessee is allowed for statistical purposes in above terms.
Order pronounced in the open court on 14.10.2025.