KUTCHI VISHA OSWAL JAIN BHINSARA SARVODAYA SANGH,MUMBAI vs. ASSESSING OFFICER, EXEM. WARD 1(2), MUMBAI

The undisputed facts borne out from the record are that the impugned applications came to be rejected solely on the ground that while filing Form No.10AB on the e-filing portal, the assessee had inadvertently selected an incorrect clause of section 12A(1)(ac) instead of the clause applicable to its case. The Ld. CIT(E), treating the said defect as fatal to the maintainability of the application itself, declined to examine the assessee’s claim on merits and rejected the applications at the threshold. Thus, the rejection is not founded upon any adverse finding regarding the genuineness of the trust, its charitable objects or the authenticity of its activities, but rests exclusively upon a technical defect in the electronic filing of the application.

Before us, the Ld. Counsel submitted that the assessee is an existing charitable trust and the incorrect selection of the relevant clause in the online utility was nothing but an inadvertent and bona fide procedural mistake. It was submitted that such a curable defect could not have resulted in outright rejection of the applications without affording an opportunity to rectify the same. It was, therefore, pleaded that

We have heard the rival submissions and perused the material placed on record. The short controversy requiring our adjudication is whether the applications of the assessee could have been rejected merely because an incorrect clause was selected while filing Form No.10AB on the e-filing portal, despite there being no adverse finding whatsoever with regard to the genuineness of the trust or its charitable activities.

In our considered opinion, the approach adopted by the Ld. CIT(E) cannot be sustained. The distinction between a procedural requirement and a substantive statutory condition is too well recognised to require any elaborate discussion. An inadvertent selection of an incorrect clause in an electronic form is essentially a curable procedural defect. Such a lapse, by itself, cannot be elevated to the status of a substantive disqualification so as to deny the assessee an opportunity of having its application examined on merits. Once the identity of the applicant, its objects and the purpose for which registration or approval is sought remain undisputed, the application deserves to be considered in its correct

We further find that the impugned orders do not indicate that the assessee was afforded any meaningful opportunity to rectify the defect or that the Ld. CIT(E) made any endeavour to examine whether the mistake was merely technical in nature. The entire exercise has been concluded by treating the incorrect selection of the relevant clause as sufficient to reject the applications themselves. In our view, such a hyper- technical approach does not advance the object of the statute. A quasi judicial authority is expected to examine the substance of the claim rather than reject it at the threshold on account of a procedural irregularity, particularly when the defect is capable of being rectified without causing any prejudice to the Revenue.

We also find that in a series of similar matters involving identical facts, wherein the applications came to be rejected merely on account of quoting an incorrect clause while filing Form No.10AB, the Coordinate Benches have consistently restored the matter to the file of the Ld. CIT(E) for fresh adjudication after permitting the assessee to rectify the

Accordingly, in the interest of substantial justice, the impugned orders are set aside and the matters are restored to the file of the Ld. CIT(E). The Ld. CIT(E) shall treat the applications under the appropriate statutory provision, permit the assessee to rectify the technical defect, if so required, and thereafter examine and adjudicate the applications afresh on their own merits in accordance with law after affording due and effective opportunity of hearing to the assessee. The assessee is also directed to extend full cooperation in the fresh proceedings and furnish all necessary details and documents as may be called for. We make it clear that we have not expressed any opinion on the merits of the claim and all issues are left open for adjudication by the Ld. CIT(E).

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