CONCEPT FOUNDATION TRUST,SURAT vs. CIT (EXEMPTION), AHMEDABAD

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ITA 843/SRT/2026Status: DisposedITAT Surat15 July 2026AY 2026-2711 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the rejection orders were passed in violation of natural justice as no opportunity of hearing was provided. It also noted that selecting the wrong clause/code is a procedural mistake, not a substantive defect, especially given recent changes in the law.

What were the facts?

The assessee trust applied for renewal of registration under Section 12AB and approval under Section 80G. The CIT(Exemption) rejected both applications, citing the selection of incorrect clauses/codes in the applications and lack of opportunity for hearing.

What were the issues?

Whether rejection of applications for registration and approval without providing an opportunity of hearing is valid, and if a procedural error in selecting a wrong clause/code warrants rejection.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT ‘DB’ BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

For Appellant: Shri Parin Shah, CA
For Respondent: Shri Aashish Pophare, CIT-DR

आदेश / O R D E R Per Bench: The captioned two (2) appeals are filed by assessee; the details of these appeals are as under:

(i) ITA 842/SRT/2026 is directed against the order bearing DIN: ITBA/EXM/F/EXM45/2025-26/1084854863(1) dated 16.01.2026 passed by learned Commissioner of Income-tax (Exemption), Ahmedabad [“Ld. CIT(E)”], by which the assessee’s application for renewal of registration u/s 12A/12AB of Income-tax Act, 1961 [“the Act”] has been rejected.

(ii) ITA 843/SRT/2026 is directed against the order bearing DIN: ITBA/EXM/F/EXM45/2025-26/1084890770(1) dated 16.01.2026 passed by Ld. CIT(E), by which the assessee’s application for renewal of approval u/s 80G(5) of the Act has been rejected.

The assessee has raised the grounds as mentioned in respective Appeal Memos (Form No. 36).

2.

Since these appeals relate to the same assessee and are interconnected, they were heard together and are being decided by this common order.

3.

There is a delay of 52 days in both of these appeals. The assessee has filed similarly worded applications/affidavits for condonation of delays in these appeals. Hence, the application/affidavit filed in one of these appeals is scanned and re-produced for an immediate reference:

4.

The averments made by assessee in above application/affidavit, which are self-explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeals. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time. It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the facts of case, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeals and proceed with hearing.

5.

The Ld. AR for assessee carried us to the impugned orders and made two-fold submissions as under:

(i) That the Ld. CIT(E) has not given any opportunity of hearing to assessee before passing impugned orders which is manifestly evident from the fact that the Ld. CIT(E) has kept blank the details in Entry No. 10 of Form No. 10AD (first page of impugned order) against “Date of opportunity afforded to the applicant before such rejection or cancellation of application for registration/approval”. Therefore, the impugned orders passed by Ld. CIT(E) are violative of section 12AB(1)(b)(ii)(B) which mandates that the Ld. CIT(E) shall afford a reasonable opportunity of hearing to assessee before passing a rejection order as also the impugned orders are against the principle of natural justice and fair play.

(ii) That, in Paras 3.2 of impugned orders, Ld. CIT(E) has noted his observation that the assessee has selected wrong clause/code in filing applications and for this reason, he has rejected assessee’s applications. But there are numerous judicial rulings given in recent times by different benches of ITAT that such a mistake i.e. selecting wrong clause/code while filing application is a procedural mistake. Further, occurrence of this mistake is attributable to the reason that there is a substantial change made in recent times in the provisions of section 12A/12AB and 80G whereby several clauses/sub-clauses have been introduced for different situations and the professionals/ assessees across India have committed mistakes due to confusion/lack of understanding of provisions. He submitted that the case of assessee is also same, otherwise there was no reason of selecting wrong section/code. He submitted that by selection of wrong section/code, the assessee does not derive any benefit. He submitted that it was a pure technical mistake on the part of assessee which needs a judicious consideration.

6.

Having made above submissions, Ld. AR requested that the present matters must be restored at the level of Ld. CIT(E) for adjudication afresh. He submitted that the inadvertent selection of an incorrect clause/code in the electronic applications constituted a mere procedural defect capable of rectification and, therefore, it should not be a basis for rejection of the applications. The Ld. AR requested that the assessee be permitted to rectify the applicable clause/code, if required by Ld. CIT(E), and that the applications be considered afresh on merits after affording due opportunity of hearing.

7.

Per contra, Ld. DR for revenue strongly opposed the submission of assessee. He submitted that it is the assessee who had selected/filled wrong clause/code in applications. Therefore, the Ld. CIT(E) is justified in rejecting assessee’s applications. He submitted that there is no infirmity, perversity or error in the orders passed by Ld. CIT(E). Therefore, the impugned orders must be upheld.

8.

We have considered rival contentions of both sides and perused the impugned order as well as the material held on record to which our attention has been drawn.

9.

At first, we find that the Ld. CIT(E) has passed impugned orders without giving any opportunity to assessee as is manifest from the fact that the impugned orders do not record any date on which an opportunity of hearing was afforded to the assessee. Therefore, the impugned orders are against the provision of section 12AB(1)(b)(ii)(B) as well as the principle of natural justice and fair play and liable to be set aside for a fresh consideration by Ld. CIT(E).

10.

We next find that the Legislature has introduced a new regime for granting different types of registrations/approvals in section 12A/12AB and 80G through TOLA w.e.f. 01.04.2021. The provisions contain multiple clauses and sub-clauses governing different situations of ‘provisional’, ‘final’ and ‘renewal’ of registration/approval. The taxpayers have faced difficulties in understanding and, therefore, inadvertent errors in selecting the correct/applicable clause while filing applications are not uncommon. There are cases all over India being dealt by benches of ITAT concerning the issues of wrong selection of clause/code. We find that in the undermentioned cases, the Benches of ITAT have examined such situations and have provided appropriate relief to the assessees by adopting a pragmatic approach:

(i) ITAT, Pune in Subhadra Foundation Vs. The Commissioner of Income- tax Exemption, Pune, ITA No. 1744 & 1745/PUN/2025, dated 09.09.2025 (ii) ITAT, Mumbai in Rambha Charitable Trust, Mumbai Vs. Commissioner of Income-tax, ITA No. 5111/Mum/2024, order dated 29.11.2024

(iii) ITAT, Kolkata in North Eastern Social Research Centre Vs. CIT(Exemption), Kolkata, ITA No. 741/Kol/2024, order dated 09.07.2024

(iv) ITAT, Indore in Balaji Gau Sarakshan Sansthan Vs. CIT(Exemption), Bhopal, ITA No. 887 & 890/Ind/2025

11.

These decisions consistently hold that an inadvertent selection of an incorrect clause/code, by itself, constitutes a procedural lapse and should not defeat a substantive claim for registration or approval. For an immediate reference, we re-produce below the order of ITAT, Pune in Subhadra Foundation (supra):

“7. The ld. CIT(E) has alleged mis-representation of facts, however, ld. CIT(E) failed to substantiate it. Ld. CIT(E) failed to consider the elaborate submission filed by Assessee to establish genuineness of charitable activities. It is an admitted fact by Assessee that while filing the Form, the incorrect sub-clause was selected. However, this cannot be a grave mistake to make the Assessee ineligible for registration u/s.12A of the Act. ITAT Pune Bench in the case of National Association for the Blind Vs. CIT(Exemption)-Pune in ITA No.2389/PUN/2024 has held as under: “6. We have heard Ld. Counsels from both the sides and perused the material available on record and also copy of case laws relied on by the assessee. We find that admittedly, the assessee trust was required to file application under clause (iii) of section 12A(1)(ac) of the IT Act but due to inadvertent error the application was filed under clause (vi) of section 12A(1)(ac) of the IT Act and for this reason alone Ld. CIT, Exemption, Pune rejected its application for registration. We find that under identical situations, a Co-ordinate Bench of this Tribunal in the case of Raj Krishan Jain Charitable Trust (supra) allowed the appeal of the assessee by observing as under:- “9. As contended the appellant has committed a technical mistake in making the application under Section 12A(1)(ac)(ii) instead of clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act. As pointed out the appellant has filed revised form 10AB for seeking registration under the correct provision i.e. Section 12A(1)(ac)(iii) which can also be considered. 10. In consonance with the decision rendered by the co-ordinate Bench, the typographical error deserves to be corrected. Accordingly, the appeal deserves to be allowed and impugned order dated 15.03.2024 of Ld. CIT(E) is liable to be set aside. Hence, the appeal is allowed and we set aside the order of Ld. CIT(E) dated 15-03-2024 and remand the matter back to the file of the CIT(E) for fresh adjudication by considering amended application of the appellant under Section 12A(1)(ac)(iii) of the Act, or he can call for amended application from the appellant. 11. In the result, the appeal filed by the assessee is allowed for statistical purpose.” 7. Respectfully following the above decision passed by the Coordinate Bench of this Tribunal (supra), & considering the totality of facts of the case & in the interest of justice, we deem it proper to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to treat the application already filed by the assessee as under clause (iii) of section 12A(1)(ac) of the IT Act instead of under clause (vi) of section 12A(1)(ac) of the IT Act and decide the same as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT, Exemption, Pune in this regard and produce supporting documents/evidences in support of application for registration without taking any adjournment under any pretext, otherwise, Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal filed by the assessee are partly allowed.” 8. The facts of the present case and National Association for the Blind are identical, therefore, respectfully following the Co-ordinate Bench’s Decision(supra), we set-aside the order of ld. CIT(E) for de novo adjudication. Ld. CIT(E) shall provide opportunity of hearing. The Assessee shall file necessary documents before the ld. CIT(E). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose. 9. In the result, appeal of the assessee ITA No.1745/PUN/2025 is allowed for statistical purpose” 12. The core issue arising in the present appeals stands substantially covered by the aforesaid decisions rendered by the Co-ordinate Benches. No distinguishing feature has been brought to our notice so as to warrant a different view. Therefore, respectfully following the view taken by ITAT, Pune in Subhadra Foundation (supra) and other decisions referred to in preceding para, we are inclined to set aside the impugned orders of Ld. CIT(E) for a de novo adjudication in accordance with law after permitting the assessee to rectify the applicable clause/code, if so required, and thereafter examine the applications on their own merits without being influenced by the observations recorded in the impugned orders. The Ld. CIT(E) shall pass a speaking order after giving necessary opportunity of hearing to assessee and the assessee shall also extend full co-operation and furnish necessary documents and explanations as may be required by Ld. CIT(E).

13.

Resultantly, these appeals are allowed for statistical purposes.

Order pronounced in open court on 15 /07/2026

Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat दिन ांक /Dated : 15/07/2026 *a.k. Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Surat Bench, Surat

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