SHREE BHAKT JALARAM MANDIR TRUST,NA vs. ARIVS.CIT(EXEMPTION), AHMEDABAD, AHMEDABAD

The learned CIT(E) has erred in law and on facts in holding that he had no power to correct the section code selected in the application. The Trust had filed Form 10AB under clause (ii) of the first proviso to section 80G(5) under a bona fide belief that its existing approval continued to remain valid. The selection of an incorrect clause was purely inadvertent and clerical in nature, and therefore a curable defect. It is now well settled that such procedural mistakes should not defeat substantive rights. In the case of Shri Navsari Vishalad Vidhyotejak Fund v. CIT(E) (ITA Nos.1272/SRT/2024, ITATSurat), the Honorable Tribunal, in identical circumstances, held that WHARE the assessee had selected an incorrect clause while filing the application, the same ought to be treated as a bona fide mistake. The Tribunal directed the CIT(E) to treat the application under the correct clause and to decide the matter on merits, instead of rejecting it on technical grounds.

The Tribunal further emphasized that the application must be examined substantively, with an opportunity of hearing, rather than being dismissed for a procedural lapse. Shree Fofaria Family Charitable Trust v. CIT(E) (2025) 178 taxmann.com 362 (Ahmedabad, Trib) (12-09-2025), it has been held that incorrect selection of clause in Form 10AB is a curable defect, and rejection of application without granting an opportunity to rectify the same is violative of principles of natural justice. In view of the above judicial position, the action of the learned CIT(E) in rejecting the application solely on account of wrong clause selection is contrary to settled law. The learned CIT(E) ought to have adopted a facilitative and justice oriented approach by permitting correction of the clause and adjudicating the application on merits. The impugned order, therefore, deserves to be set aside on this ground alone.

The CIT(E) erred in holding that clause (ii) of the first proviso to section 80G (5) applies only to trusts holding a five year approval in Form 10AC/10AD. The Trusts approval dated 7 June 2010 was permanent and continues until cancelled. The Finance Act 2020 introduced a transition period for revalidation. it does not stipulate that pre existing approvals become invalid unless provisional registration is obtained. The CBDT Circular No. 7/2024 dated 25 April 2024 extended the due date for filing Form 10AB to 30 June 2024 and clarified that applications earlier rejected due to wrong section selection could be refilled.

The Tribunal in Shree Kukarwada Kelavni Trust v. CIT(E) (ITA Nos. 2514 and 2515/Ahd/2025) (Ahmedabad Bench) held that provisional registration granted under the new regime should be treated as regular and effective from 1 April 2021, thereby recognizing continuity of approvals. Even if the Trust did not obtain provisional registration due to confusion, the absence of a provisional certificate cannot wipe out its existing approval.

The CIT(E) assertion that he lacked the facility to correct the section code ignores judicial pronouncements. In Youth Service Centre v. CIT(E).(ITA No.585/Ahd/2025) the Tribunal condoned delay and restored an 80G application where the wrong clause was selected becaue of a portal glitch, it observed that the assessees should not be penalised for technical errors and remanded the matter for fresh consideration. The same principle applies here. The CIT(E) ought to have allowed the Trust to correct the mistake OR should have treated the application as filed under the correct clause.

The impugned order was passed without granting a meaningful opportunity to the Trust to explain the circumstances OR to furnish evidence of its activities. In Gawar Foundation v. CIT(E), (ITA 3474/DEL/2015), Delhi Bench, the Tribunal held that the CIT(E) must provide a reasonable opportunity and cannot reject Form 10AB on technical grounds without recording any adverse finding about the activities. The CIT(E) in the present case acted contrary to these principles by summarily rejecting the application.

The CIT(E) effectively held that the Trust had no valid approval, thereby depriving it of 80G benefit. Section 80G (5) empowers the Commissioner to withdraw approval only on satisfaction that the trusts income is not applied for charitable purposes OR that the conditions are violated. No such finding has been recorded. On the contrary, the Tribunal in Menaba Charitable Trust (ITA No. 1429/Ahd/2025) directed that provisional approval should remain valid until fresh adjudication. The impugned order therefore travels beyond jurisdiction.

In the light of the above facts and legal precedents, the appellant prays that the order dated 17 January 2026 be quashed, that the CIT(E) be directed to treat the Form 10AB application as filed under the appropriate clause and to adjudicate it on merits after Rs. 0 granting a reasonable opportunity of hearing, and that the appellant existing approval under section 80G be held to remain valid until a final order is passed.

The appellant craves leave to add, amend OR modify the above.”