SHRI RAM EK DHARMADA TRUST,MUMBAI vs. CIT (EXEMPTION), MUMBAI, MUMBAI

Before us, the ld.DR has relied on the order of the CIT while the ld.AR has contented that due to a bonafide oversight, the assessee selected sub-clause (ii) in the form instead of sub-clause (iii) of the first proviso to Section 80G(5). However, the form was still filed under the correct section, i.e., Section 80G(5) of the Act.The first notice was issued by the department on March 17, 2025, requesting certain information, which was duly submitted on March 24, 2025. There was no mention or objection at this stage regarding the selected clause.The application was complete in all respects and all required documents and information were submitted in the given time frame in good faith.The application was later rejected which incorrectly stated that the application was filed under the “wrong section”, when in fact it was filed under the correct section [Section 80G(5)] but under the wrong sub-clause, a minor

We have heard the rival contentions and carefully perused the records. We note that the application of the assessee for approval u/s 80G of the Act has been rejected only on account of technical reasons. In fact, instead of straightway rejecting the application, ld. CIT(E) was supposed to give opportunity to the assessee to rectify the mistake.There is no whisper in the order of ld.CIT(E) about any query or show cause to the assessee about the ineligibility of assessee. Taking an action against the assessee without confronting it about the reasons for such rejection clearly amounts to violation of the principle of natural justice as the P a g e | 5 A.Y. 2025-26 Shri Ram Ek Dharmada Trust assessee was not afforded reasonable opportunities of being heard to submit its contentions in defence to the basis of rejection of application.

1 It is a case of the assessee that due to inadvertent mistake and bonafide belief it had correctly applied Form 10AB under Section 80G(5)(iii), which has not been taken into consideration by the ld.CIT(E) in its proper prospective and neither the assessee being heard by him and rejected the case thereafter. Before we proceed to examine the facts in assessee's case, it is important to first look at the relevant provisions of first proviso to subsection (5) of section 80G of the Act which read as under -

2 From the facts of the case, in our considered view, there is merit in claim of the ld. AR that assessee has selected the wrong clause 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) which otherwise assessee might have explained the facts to avoid the impugned rejection. It is not denied that the assessee had already been granted provisional approval u/s.80G(5) of the Act and the correct clause in which the application ought to have been moved by the assessee was sub-clause (iii) of First Proviso to section 80G of the Act. All these facts were there on record before the ld. CIT(E) is also not denied. In fact, the provisional registration was granted to the assessee by the ld. CIT(E) himself. It is abundantly clearly, therefore, the assessee's application seeking approval u/s.80G(5) of the Act has been denied merely for an inadvertent mistake of mentioning incorrect sub-clause in which the application was made, which ld. CIT(E) himself could have corrected and considered in the light of the fact that he was aware of the fact and situation in which the application was filed by the assessee. We, therefore, find merit in the contention of the ld. AR for the assessee that the ld. CIT(E) ought not to have rejected the assessee's application but should have considered it in the light of the correct provisions of law.

This issue we find is squarely covered by the decision of the ITAT, Mumbai Bench in the case of Rotary Charity Trust vs. CIT(E) in ITA No.6133/Mum/2024 dated 09.01.2025 wherein it considered identical issue in favour of the assessee and restored the matter back to the ld. CIT(E) for consideration afresh treating the application to have been made in terms of the correct provisions of law.The Mumbai Bench of ITAT in the case of Celebrate Life vs. CIT(E) passed in ITA No. 5692/Mum/2024 wherein on identical facts and circumstances of the matter where due to inadvertent error the wrong clause was inserted instead of clause (iii) of first proviso to sub-section 80G of the Act, granted liberty to the assessee to file a fresh application before the ld. CIT(E) under the correct Form with the further directions upon the CIT(E) to accept the same and to grant permission to load the said form online and decide the issue, in accordance with law, after affording an opportunity of being heard to the appellant.

In view of the above discussion, we remit the issue back to the file of ld. CIT(E), with a direction to grant an opportunity of being heard to the assessee and to consider the evidences on record or any other evidence which it may choose to file at the time of hearing of the matter in regard to grant of approval under section 80G(5)(ii) of the Act.

In the result, appeal of the assessee is allowed for statistical purposes.