ANJUMANE HOOSHAMI SOCIETY,MUMBAI vs. CIT(EXEMPTIONS), MUMBAI, MUMBAI

The brief facts of the case are that the assessee, Anjumane Hooshami Society, is a charitable institution. The assessee had already been granted regular approval under section 80G of the Income-tax Act, 1961 (“the Act”) vide Form No.10AC dated 15.10.2021. The approval was granted for a period of five years and was valid from A.Y. 2022-23 to A.Y. 2026-27.

Since the existing approval was due to expire, the assessee filed Form No.10AB on 08.08.2025 seeking continuation of its approval under section 80G of the Act.

While examining the application, the learned CIT(Exemptions) noticed that the assessee had selected clause (iii) of the first proviso to section 80G(5) of the Act in Form No.10AB. He observed that clause (iii) applies to an institution which has provisional approval and thereafter seeks regular approval. In the case of the assessee, however, regular approval had already been granted for five years. According to the learned CIT(Exemptions), the assessee was therefore required to apply under clause (ii) of the first proviso to section 80G(5) of the Act, which applies where an existing approval is due to expire.

The learned CIT(Exemptions) accordingly rejected the application only on the ground that the assessee had selected the wrong clause in Form No.10AB. At the same time, he specifically clarified that the regular approval already granted to the assessee on 15.10.2021 would continue to remain valid from A.Y. 2022-23 to A.Y. 2026-27. He did not record any adverse finding regarding the charitable objects of the assessee, genuineness of its activities or its substantive eligibility for approval under section 80G of the Act.

The assessee is in appeal before us against the order passed by the learned CIT(Exemptions) rejecting its application under section 80G of the Act.

We have heard the rival submissions and perused the material available on record. The facts are quite simple. The assessee already held regular approval under section 80G of the Act. It filed Form No.10AB on 08.08.2025 for renewal of that approval. However, while filing the form electronically, the assessee selected clause (iii) instead of clause (ii) of the first proviso to section 80G(5) of the Act. The learned CIT(Exemptions) rejected the application for this reason alone.

In our view, the mistake is procedural in nature. The assessee filed the prescribed Form No.10AB before the competent authority and its intention to seek continuation of the existing approval was apparent from the record. The learned CIT(Exemptions) himself verified from the Departmental portal and found that regular approval had already been granted to the assessee for five years. Thus, there was no doubt either about the existing approval or about the nature of the application which the assessee intended to make. Merely selecting an incorrect clause in the electronic form, in our view, should not result in rejection of the application without permitting the assessee to correct the mistake.

The Mumbai Bench of the Tribunal considered an almost similar issue in Rotary Charity Trust v. CIT(Exemptions) [2025] 170 taxmann.com 797 (Mumbai - Trib.) / [2025] 211 ITD 297 (Mumbai - Trib.). In that case, the assessee selected an incorrect section code while filing Form No.10AB and the CIT(Exemptions) rejected the application. The Tribunal restored the matter and directed the CIT(Exemptions) to consider the application under the correct provision and grant approval if the assessee was eligible.

The same view was taken by the Mumbai Bench in Subharma Charitable Trust v. CIT(Exemptions) [2025] 172 taxmann.com 431 (Mumbai - Trib.). The assessee in that case had filed Form No.10AB under clause (ii) instead of clause (iii). The Tribunal treated the mistake as an inadvertent and clerical error and restored the matter to the CIT(Exemptions) so that the assessee could file the application under the correct clause.

We also find support from the decision in Aatman Foundation v. CIT(Exemptions) [2025] 174 taxmann.com 1109 (Ahmedabad - Trib.) / [2025] 213 ITD 8 (Ahmedabad - Trib.). The Tribunal held that an incorrect selection of the provision in Form No.10AB should not defeat the application where the assessee is otherwise entitled to have its claim examined under the correct provision. The matter was therefore restored for fresh consideration under the appropriate clause.

Similarly, in Gandhinagar Ayyapa Pooja Samiti v. CIT(Exemptions) [2025] 174 taxmann.com 901 (Ahmedabad - Trib.), the Tribunal noticed that the provisional approval and all relevant facts were already available before the CIT(Exemptions). It held that the application ought not to have been rejected merely because the assessee had selected an incorrect clause and directed the authority to consider the application under the correct provision.

In ModasaEkda Visha KhadayataKovadia Kelavani Mandal v. CIT(Exemptions) [2025] 176 taxmann.com 569 (Ahmedabad - Trib.), the Tribunal again dealt with an assessee which had inadvertently selected the wrong clause in Form No.10AB while applying under section 80G. The Tribunal held that the defect was curable and restored the matter with a direction to treat the application as one filed under the correct clause and decide the eligibility of the assessee on merits.

Thus, the consistent view emerging from the above decisions is that selection of an incorrect clause in Form No.10AB is a curable procedural defect. Such a mistake should not result in rejection of the application where the nature of the relief sought is clear and the assessee is entitled to have its claim examined under the appropriate provision.

Coming to the facts of the present case, the assessee already had regular approval under section 80G from A.Y. 2022-23 to A.Y. 2026-27. The assessee was therefore required to make the renewal application under clause (ii) of the first proviso to section 80G(5). Instead, it inadvertently selected clause (iii). Apart from this error, the learned CIT(Exemptions) has not pointed out any defect in the charitable objects or activities of the assessee. In fact, even while rejecting the application, he has accepted that the assessee's existing regular approval would to remain valid.

In these circumstances, we are of the considered view that the learned CIT(Exemptions) was not justified in rejecting the application only because the assessee selected an incorrect clause in Form No.10AB. The mistake could have been corrected by permitting the assessee to file the application under the proper clause or by treating the application already filed as one made under the correct provision.

We accordingly restore the application to the file of the learned CIT(Exemptions). We direct the learned CIT(Exemptions) to treat the Form No.10AB filed by the assessee on 08.08.2025 as an application for renewal under clause (ii) of the first proviso to section 80G(5). If any procedural correction in the electronic form is required, the learned CIT(Exemptions) shall permit the assessee to make such correction.

The learned CIT(Exemptions) shall thereafter examine the application on merits and grant approval in accordance with law if the assessee satisfies the conditions prescribed under section 80G of the Act. He shall not reject the application merely on account of the wrong clause selected in the original Form No.10AB. Needless to say, the assessee shall be granted reasonable opportunity of hearing.

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