RAJGANGA EDUCATIONAL SOCIETY,FARRUKHABAD vs. CIT EXEMPTION, LUCKNOW

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ITA 577/AGR/2026Status: DisposedITAT Agra26 October 2026AY 2026-277 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rejection of the assessee's application by the CIT(E) was based solely on a technical ground, specifically filing under the wrong sub-clause of section 12A(1)(ac) of the Act, without any adverse remarks regarding the nature of the assessee's activities or objectives. The Tribunal noted that no show-cause notice was issued by the CIT(E) before rejecting the application. Relying on the coordinate bench decision in Shree Swaminarayan Gadi Trust vs CIT (2024) 162 taxman.com 772, the Tribunal found that an inadvertent mistake in filing the application under the wrong sub-clause is not fatal and could be considered in the appropriate sub-clause. The Tribunal directed the registry official of the CIT(E) to either correct the mistake on the ITBA portal or allow the assessee to rectify or amend the relevant clause/sub-clause of section 12A(1). Consequently, the impugned order of the CIT(E) was set aside, and the CIT(E) was directed to treat the application as filed under section 12A(1)(ac)(iii) instead of section 12A(1)(ac)(vi)(B) and to consider the case on its merits after granting an opportunity of hearing to the assessee and allowing the assessee to furnish complete details. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Rajganga Educational Society, filed an online application for registration in Form 10AB on December 31, 2025, under section 12A(1)(ac)(vi)(B) of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption), Lucknow (CIT(E)), rejected the application on June 25, 2026. The CIT(E) held that the application was not filed under the correct sub-clause and was beyond the statutory time limit. Specifically, the CIT(E) observed that section 12A(1)(ac)(vi)(B) applies when the trust's activities have commenced and no income has been excluded under certain other provisions. However, the CIT(E) believed the application should have been filed under section 12A(1)(ac)(iii), which is for institutions provisionally registered under section 12AB or provisionally approved under other sections, and that a reasonable cause for delay should have been provided. The assessee appealed this rejection.

What were the issues?

1. Whether the learned CIT(E) erred in rejecting the assessee's application for registration in Form 10AB solely on the ground that it was filed under sub-clause (vi)(B) of section 12A(1)(ac) instead of sub-clause (iii) thereof, considering it a hyper-technical ground. - Assessee's contention: The selection of a sub-clause is a procedural description, and a bona fide or inadvertent mention of an incorrect sub-clause is a curable irregularity that does not affect maintainability. The CIT(E) should have treated the application as filed under the correct sub-clause (iii) given the substance of the claim, especially since the assessee already held provisional registration. - Revenue's contention: Not recorded. 2. Whether the rejection of the application in limine by the learned CIT(E) was erroneous when the admitted facts indicated the assessee's eligibility for registration under the correct sub-clause (iii). - Assessee's contention: The CIT(E)'s own finding that the assessee "should have filed" under sub-clause (iii) demonstrates eligibility, making the outright rejection inconsistent. The CIT(E) also failed to comply with the mandate of section 12AB(1)(b) by not making necessary inquiries to satisfy himself about the genuineness of activities and compliance with other laws. - Revenue's contention: Not recorded. 3. Whether the learned CIT(E) erred in not considering the application on merits, despite the assessee's claim of being engaged in providing education and professional training to the poor, and whether the rejection based on a technicality frustrates the beneficial provisions for charitable institutions. - Assessee's contention: Procedure is the handmaid of justice, and a substantive benefit under a beneficial provision should not be defeated by a technical or clerical misdescription where substantive conditions are met. Liberal construction of registration provisions for charitable institutions is necessary. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(vi)(B),Section 12A(1)(ac)(iii),Section 12AB(1)(b),Section 10(23C),Section 11,Section 12

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA(DB

Before: SUNIL KUMAR SINGHBRAJESH KUMAR SINGH

For Appellant: Shri. Rajiv Pratap Mall, Adv. &, Shri Anish Raj, Adv
For Respondent: Ms. Sangeeta Yadav, CIT DR
Hearing: 02.09.2026Pronounced: 02.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA(DB) BENCH, AGRA BEFORE: SUNIL KUMAR SINGH, JUDICIAL MEMBER BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 577/Agr/2026 Assessment Year: 2026-27 Rajganga Educational Society, Vs. CIT Exemption, Aayakar 1/1421, Awas Vikas Colony, Bhawan, 5, Ashok Marg, Barhpur, Farrukhabad-209625 Lucknow-223362 PAN: AAIAR4161Q (Appellant) (Respondent) Assessee by Shri. Rajiv Pratap Mall, Adv. & Shri Anish Raj, Adv. Department by Ms. Sangeeta Yadav, CIT DR Date of hearing 02.09.2026 Date of pronouncement 02.09.2026 ORDER PER:BRAJESH KUMAR SINGH, A.M.

This appeal is directed against the impugned order dated 25.06.2026 passed in Application No. CIT Exemption, Lucknow/2026-27/12AA/10086 by the ld. Commissioner of Income Tax (Exemption), Lucknow [(hereinafter referred to as the “CIT(E)] under clause 12AB(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), wherein ld. CIT(E) has rejected assessee’s application on

ITA No.577/Agr/2026

the ground of not filed under correct sub clause and being beyond statutory time limit.

2.

Brief facts of the case: The appellant assessee had filed an online application for registration in form 10AB on 31.12.2025 u/s 12A(1)(ac)(vi)(B) of the Act. In this regard, the Ld. CIT(E) observed that the provisions of section 12A(1)(ac) (vi) (B) of the Act are applicable where activities of the trust or institution have commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application. The Ld. CIT(E) further observed that in the present case, the applicant society should have filed the application in form 10 AB under section 12A(1)(ac) (iii) with reasonable cause of delay as the provisions of section 12A(1)(ac) (iii) are applicable where the trust or institution has been provisionally registered under section 12AB [or provisionally approved under sub- clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10]. The Ld. CIT(E) held that since the application has not been filed under the correct section of the Act, the

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application is not maintainable and, therefore rejected the application of the assessee trust filed in Form No. 10AB dated 31/12/2025 under section 12A(1)(ac) (vi) (B).

3.

Aggrieved with the said order, the assessee has preferred this appeal on the following grounds of appeal: “1. That the impugned order dated 25.06.2026 passed under clause 12AB(1)(b) of the Act is bad in law, contrary to the facts on record, opposed to the settled principles of law and the object of the beneficial provisions governing registration of charitable and educational institutions, and is therefore liable to be quashed. 2. That the learned CIT(E) erred, both in law and on facts, in rejecting the Appellant's application in Form No. 10AB dated 31.12.2025 solely on the hyper-technical ground that it had been filed under sub-clause (vi) (B) of clause (ac) of section 12A(1) instead of sub-clause (iii) thereof, without appreciating that the selection of a particular sub-clause in Form No. 10AB is at best a procedural description, and that a bona fide or inadvertent mention of an incorrect sub-clause is a curable irregularity which does not go to the root of maintainability. 3. That the learned CIT(E) ought to have been read and adjudicated the application as if filed under the correct sub-clause (iii), rather than being rejected outright, the substance of the claim being that of an existing provisionally-registered institution seeking regular registration. 4. That the learned CIT(E) erred in holding the application to be "not maintainable" and in rejecting it in limine, when the admitted facts recorded in the impugned order itself -namely that the Appellant already held provisional registration under section 12A(1)(ac)(vi) vide order dated 08.12.2023 valid for A.Y. 2024-25 to A.Υ. 2026-27 - establish that the Appellant was in fact eligible for, and entitled to be considered for, registration under the correct sub-clause (iii). The very finding that the Appellant "should have filed" under sub-clause (iii) is a finding of eligibility, and it was wholly inconsistent to reject the application on that basis. 5. That the impugned order is in breach of the mandate of clause (b) of section 12AB(1), which requires the learned CIT(E) to call for such documents or information and to make such inquiries as he thinks necessary in order to satisfy himself about (a) the genuineness of the

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activities of the institution and (b) the compliance of such requirements of any other law as are material for the purpose of achieving its objects. 6. That the learned CIT(E) failed to appreciate that procedure is the handmaid of justice and not its mistress, and that an application seeking a substantive benefit under a beneficial provision cannot be defeated by a technical or clerical misdescription where the substantive conditions for registration are otherwise satisfied. Registration provisions relating to charitable and educational institutions are to be construed liberally so as to advance, and not to frustrate, their object. 7. That the rejection of registration will visit the Appellant with grave and irreparable prejudice, exposing it to loss of exemption under sections 11 and 12 of the Act, notwithstanding that its objects are admittedly charitable/educational in nature and its activities genuine, and such a consequence flowing from a curable procedural lapse cannot be countenanced. 8. That the Appellant craves leave to add to, alter, amend, modify, substitute, delete or withdraw any of the foregoing grounds of appeal, and to raise such further or additional grounds, at or before the hearing of the appeal, with the leave of this Hon'ble Tribunal.”

4.

We have heard both the parties and perused the material available on record. On perusal of the order of the Ld. CIT(E), it is seen that the same has been rejected on a technical ground that the application in Form 10 AB was filed under Section 12A(1)(ac)(vi)(B) of the Act instead of Section 12A(1)(ac) (iii) of the Act without pointing out any adverse remark regarding nature of activity, objectives and the status of the assessee trust which is claim to be engaged in providing education and professional training to poor.

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4.1 On similar facts, the Co-ordinate Bench of the Tribunal Surat in the case of Shree Swaminarayan Gadi Trust vs CIT (2024) 162 taxman.com 772 directed the Ld. CIT(E) to consider the application of the assessee afresh on merits and not to reject the same on technical grounds like filing the application in a wrong Form or applying under the wrong sub-clause of section 12A of the Act. The relevant extract of the order is reproduced as under: - “We have considered the submissions of both the parties and perused the record carefully. There is no dispute that the assessee applied for registration under Section 12A/12AB of the Act under Form 10AB on 28.09.2023. The ld. CIT(E) while considering the application of assessee noted that the application filed by assessee is not maintainable and accordingly, a show cause notice dated 02/11/2023 was issued for seeking clarification. The assessee responded to the show cause notice of ld CIT(E) vide their reply dated 15.12.2023. The contents of show cause notice and the reply thereof is not recorded by ld CIT(E) in his order. We find that the assessee vide their reply dated 15/12/2023 prayed to consider the application in appropriate sub-clause of section 12A(1). The ld CIT(E) held that he has no power to change/ amend or rectify Form-10AB. We find that it was an inadvertent mistake and the assessee has already explained the facts and prayed for correction before the ld. CIT(E). In our view the mistake in filing entry was not fetal and could be considered in appropriate sub-clause or clause of section 12A(1). Otherwise, the assessee has provided all the details and information in Form-10AB, while applying for registration under section 12A/12AB. Being first appellate authority, the plea of assessee for correction in Form-10AB is accepted and the order of ld CIT(E) is set- aside. The registry official of ld CIT(E) maintaining record of ITBA portal about the registration of trust under section 12A/12AB is directed either to correct such mistake or allow the assessee to rectify or amend the relevant clause/ sub-clause of section 12A(1). Considering the fact that the application of assessee was not considered on merit, therefore, we deem it appropriate to direct the ld. CIT(E) to treat the application of assessee under Section 12A(1)(ac)(iii) in place of Section 12A(1)(ac)(iv) of the Act and to consider the case on merit and pass the order in accordance with law. Needless to direct that before passing the order, the ld CIT(E)

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shall grant opportunity of hearing to the assessee. The assessee is also directed to furnish complete details to prove its object and activity and make all compliances as desired by the ld. CIT(E). In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes only. 6. In the result, the appeal of assessee in ITA No. 369/Srt/2024 is allowed for statistical purpose.”

4.2 In the case of the present assessee also, the Ld. CIT(E) rejected the application of the assessee only on the technical ground as discussed in para no. 4 of this order. Further, apparently no show- cause notice was issued by the Ld. CIT(A) before rejecting the application of the assessee.

4.3 We, therefore, considering the facts of the present case and relying upon the order of the Co-ordinate Bench of the Tribunal in the case Shree Swaminarayan Gadi Trust VS CIT (2024) 162 Taxman.com 772, direct the registry official of ld. CIT(E) maintaining record of ITBA portal about the registration of trust under section 12A/12AB either to correct such mistake or allow the assessee to rectify or amend the relevant clause/ sub-clause of section 12A(1) so as to make the application of the assessee technically correct to be considered for valid registration. Considering the fact that the application of assessee was not considered on merit, we, therefore, deem it appropriate to set aside the impugned order dated 25.06.2026 of the Ld. CIT(E) and

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direct him to treat the application of assessee under Section 12A(1)(ac) (iii) of the Act instead under Section 12A(1)(ac) (vi) (B) of the Act and to consider the case on merit and pass an order afresh in accordance with law. Needless to state that before passing the order, the Ld. CIT(E) shall grant opportunity of hearing to the assessee. The assessee is also directed to furnish complete details to prove its object and activity and make all compliances as desired by the Ld. CIT(E).

5.

In the result, the appeal of the assessee is allowed for statistical purposes. The impugned order is set aside.

Order pronounced in the Open Court on- 02.09.2026

Sd/- Sd/- (SUNIL KUMAR SINGH) (BRAJESH KUMAR SINGH) JUDICIAL MEMBER ACCOUNANT MEMBER

Dated: 26.10.2026 *aks Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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