THE CLIMATE PROJECT FOUNDATION,MUMBAI vs. CIT EXEMPTIONS MUMBAI, MUMBAI

These two appeals filed by the assessee are directed against two separate orders, both dated 31.03.2026, passed by the Commissioner of Income Tax (Exemptions), Mumbai [‘the CIT(E)’]. In ITA No. 6083/Mum/2026, the assessee has challenged the rejection of its application in Form No. 10AB for registration under section 12AB of the Income-tax Act, 1961 (‘the Act’). In ITA No. 6081/Mum/2026, the assessee has challenged the rejection of its application in Form No. 10AB for approval under section 80G(5) of the Act. Since both appeals arise from the same set of facts and the decision in the appeal concerning registration under section 12AB has a direct bearing on the appeal concerning approval under section 80G(5), they were heard together and are disposed of by this common order.

The assessee has raised grounds challenging the rejection of its application for registration under section 12AB merely because, while filing Form No. 10AB, it selected clause (iii), instead of clause (ii), of section 12A(1)(ac). In the connected appeal, the assessee has challenged the rejection of approval under section 80G(5) solely on account of the rejection of its application for registration under section 12AB. The remaining ground in each appeal is general in nature.

Brief facts are that the assessee is a charitable trust. It was granted regular registration in Form No. 10AC on 24.09.2021 under section 12AB of the Act for a period of five years from A.Y. 2022-23 to A.Y. 2026-27. Before expiry of the said registration, the assessee filed Form No. 10AB on 30.09.2025 seeking renewal of registration. In the form, however, the application was made under section 12A(1)(ac)(iii), which applies to conversion of provisional registration into regular registration, whereas the application of the assessee, being for renewal of an existing regular registration, was required to be filed under section 12A(1)(ac)(ii). The CIT(E) issued notice dated 21.01.2026 calling for the documents prescribed under rule 17A(2). The assessee furnished submissions and documents on 28.01.2026 and 30.01.2026. The CIT(E), without examining the application on merits, rejected it solely on the ground that it had been filed under the wrong section/clause. The CIT(E) nevertheless clarified that the regular registration granted on 24.09.2021 would remain valid up to A.Y. 2026-27. 2

The assessee had also filed Form No. 10AB on 30.09.2025 seeking approval under section 80G(5) under clause (iii) of the first proviso thereto. By a separate order dated 31.03.2026, the CIT(E) rejected the said application on the ground that the application for registration under section 12AB had been rejected and, therefore, the condition prescribed in section 80G(5)(i) was not fulfilled.

The learned Authorised Representative submitted that the assessee already held regular registration, had filed the renewal application within the prescribed time and had complied with the notices by furnishing the requisite documents. The selection of clause (iii), instead of clause (ii), in Form No. 10AB was an inadvertent procedural error. He submitted that the substantive application ought not to have been rejected without examination on merits merely because an incorrect code or clause was selected in the electronic form. He, therefore, prayed that the matter be restored to the CIT(E) with a direction to consider the application under the correct clause. As regards the application under section 80G(5), he submitted that its rejection was only consequential to rejection of the application under section 12AB and that this matter may also be restored.

The learned Departmental Representative relied upon the impugned orders. She submitted that the assessee was required to file the application under the correct statutory clause. She, however, fairly left the matter to the Bench if an opportunity was considered appropriate for examination of the applications on merits.

We have heard the rival submissions and perused the material placed on record. It is evident from the impugned order that the assessee was already enjoying regular registration under section 12AB from A.Y. 2022-23 to A.Y. 2026-27. It filed Form No. 10AB on 30.09.2025 before 3 expiry of the existing registration. The CIT(E) also records that, in response to the notice, the assessee furnished the relevant details and documents. Thus, the application has not been rejected on account of delay, absence of charitable objects, want of genuineness of activities, or non-compliance with the statutory notice. It has been rejected only because the assessee selected clause (iii), instead of clause (ii), of section 12A(1)(ac) while filing the electronic form.

In our considered view, selection of an incorrect clause in the electronic Form No. 10AB, in the facts of the present case, is a curable procedural defect. The nature of the application was clear from the existing regular registration and the period for which it had been granted. Once the assessee had filed the application within the prescribed time and had furnished the documents called for, the application ought to have been considered under the provision applicable to renewal of regular registration. A substantive claim cannot be shut out at the threshold merely on account of selection of a wrong code or clause in the electronic form when all relevant facts were available before the authority. At the same time, the satisfaction regarding the statutory conditions governing registration is required to be recorded by the CIT(E) after examining the application and supporting material. We, therefore, set aside the order impugned in ITA No. 6083/Mum/2026 and restore the application to the file of the CIT(E). The CIT(E) shall treat the application dated 30.09.2025 as having been filed under section 12A(1)(ac)(ii), permit the assessee to rectify the relevant code/clause in the prescribed manner, if so required, and decide the application afresh on merits in accordance with law after affording reasonable opportunity of being heard to the assessee. We clarify that we have not expressed any opinion on the merits of the assessee’s entitlement to registration.

The application for approval under section 80G(5) was rejected solely because the application for registration under section 12AB had been rejected. Since the order rejecting registration has been set aside and the application has been restored for fresh consideration, the basis of the impugned order under section 80G(5) does not survive at present. We accordingly set aside the order impugned in ITA No. 6081/Mum/2026 and restore the application for approval under section 80G(5) to the file of the CIT(E). The CIT(E) shall decide it afresh in accordance with law, having regard to the outcome of the proceedings under section 12AB and after affording reasonable opportunity of being heard to the assessee.

In the result, both appeals filed by the assessee are allowed for statistical purposes.