MANAV UTTHAN SEVA SAMITI,SURAT vs. EXEMPTION WARD , SURAT

Ld. AR for assessee carried us to the impugned order and submitted that the Ld. CIT(E) has passed ex-parte order while granting only one opportunity to the assessee, which the assessee could not avail. It was further submitted that the impugned order has been passed without examining the applications on merits. It was also emphasised that the registration u/s 12A is fundamental and necessary for the existence and functioning of assessee since the assessee is engaged in charitable/religious activities for the benefit of the public. It was further submitted that the assessee is ready with the requisite details and documents for making an effective representation before Ld. CIT(E). It was also assured that if one more opportunity is given, the assessee shall fully co-operate and make effective representation before Ld. CIT(E). Accordingly, it was prayed that in the interest of justice and fair play, the present matters be restored to the file of Ld. CIT(E) for a meritorious adjudication after affording reasonable opportunity of hearing to assessee.

Per contra, Ld. DR for revenue submitted that there is no infirmity in the order passed by Ld. CIT(E). He submitted that the assessee voluntarily filed application to Ld. CIT(E) seeking registration u/s 12A, therefore it was incumbent upon the assessee to stay diligent and make representation before Ld. CIT(E) when called upon. He submitted that the Ld. CIT(E) has given opportunity to assessee but the assessee failed to avail the same. Therefore, the Ld. CIT(E) could not get necessary satisfaction for granting registration due to the failure of assessee. He, therefore, submitted that the rejection of application by Ld. CIT(E) was fully justified and the impugned order be upheld.

We have considered the rival submissions of both sides and carefully perused the case files including the impugned order passed by Ld. CIT(E). We find that that the rejection of the application by Ld. CIT(E) is primarily on account of non-compliance by the assessee in furnishing the requisite details and documents. At the same time, on a perusal of Column No. 10 of the impugned order (main body of Form No. 10AD) passed by Ld. CIT(E), the Ld. CIT(E) appears to have granted only one opportunity on 23.02.2026 to assessee, which shows that the Ld. CIT(E) has not afforded sufficient opportunities. Considering the nature of proceeding relating to grant of registration u/s 12A, which has significant consequences for the assessee and in the interest of justice and fair play and also having regard to the fact that the remanding of this matter to the file of Ld. CIT(E) would not cause any prejudice to the revenue/respondent, we are of the view that the assessee should be granted one more effective opportunity to substantiate his application. Accordingly, we set aside the impugned order and restore this matter to the file of the Ld. CIT(E) for a fresh consideration. The Ld. CIT(E) shall examine the application afresh after providing reasonable and adequate opportunities of being heard to assessee. The assessee is also directed to make representation to Ld. CIT(E) and furnish all requisite details and documents without seeking unnecessary adjournments failing which the Ld. CIT(E) shall be at liberty to pass order in accordance with law. Ordered accordingly.

Accordingly, this appeal is allowed for statistical purposes.

This appeal is directed against the order bearing DIN: ITBA/EXM/F/EXM45/2023-24/1063038795(1) and dated 20.03.2024 passed by learned Commissioner of Income-tax (Exemption), Ahmedabad [“Ld. CIT(E)”] by which the application dated 30.09.2023 filed by assessee for approval u/s 80G(5) has been rejected.

There is a delay of 633 days in filing this appeal. The assessee has filed an application/affidavit for condonation of delay; the same is scanned and re- produced for an immediate reference:

We have considered the explanation furnished by the assessee in the affidavit filed in support of the application. The Ld. DR opposed the condonation of delay; however, after considering the matter, the Ld. DR left the issue to the discretion of the Bench. Having regard to the explanation furnished by the assessee and the material available on record, we find that the assessee has established sufficient cause for the delay in filing the present appeal. Section 253(5) of the Act empowers the Tribunal to admit an appeal after the expiry of the prescribed period if sufficient cause is shown for not presenting the appeal within such period. Further, the Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 has emphasised the need for adopting a justice- oriented approach while considering an application for condonation of delay. Accordingly, considering the facts and circumstances of the present case and the explanation furnished by the assessee, we condone the delay of 633 days, admit the appeal and proceed to adjudicate the same on merits.

On merit of case, the Ld. AR submitted that the assessee was having approval u/s 80G(5) granted by Ld. CIT(E) vide Certificate No. Ahm/80G(5)/264/MUSS/2016-17/571 w.e.f. 28.06.2016 and the approval so granted was effective all along; copy of certificate is placed at Page 4 of Paper-Book. However, after amendment in the provisions of section 80G through TOLA, 2021 w.e.f. 01.04.2021, the assessee was required to obtain new approval and accordingly, the assessee filed application dated 26.03.2022 to Income-tax Department. While filing such application, the assessee mistakenly selected “Clause (iv) of first proviso to section 80G(5)” instead of correct clause “Clause (i) of first proviso to section 80G(5)” applicable to it [Clause (i) was applicable to an assessee having pre-existing approval u/s 80G(5), which the present assessee had]. On assessee’s application, the Income-tax Department also granted “Provisional Approval” under “Clause (iv) of first proviso to section 80G(5)” vide order dated 04.04.2022 for the period 04.04.2022 to AY 2024-25; copy of order is placed in Paper-Book at Pages 9-10. Subsequently, in continuation of such provisional approval granted by department, the assessee filed application dated 30.09.2023 for renewal/permanent approval under “Clause (iii) of first proviso to section 80G(5)”. The Ld. CIT(A) has, vide impugned order dated 20.03.2024, rejected assessee’s application as not maintainable, on the ground that the prescribed time-limit for filing such application had already expired on 30.09.2022 since the activities of the assessee had commenced from 01.04.2022 [Para 7 of impugned order]. The Ld. CIT(E) has also cancelled the Provisional Approval granted earlier to assessee. Therefore, aggrieved, the assessee has filed present appeal. [Subsequently, the assessee has also filed one more application dated 29.09.2025 under which also stands rejected by Ld. CIT(E) vide a separate order dated 19.01.2026 – Against this order of Ld. CIT(E), the assessee has filed appeal No. ITA 231/SRT/2026 which we shall be adjudicating separately in subsequent Para No. 17-20 of this order].

Having narrated thus, the Ld. AR submitted that in present case, the assessee was already having pre-existing approval u/s 80G(5) before 01.04.2021. Thereafter, due to introduction of new provisions in section 80G(5) from 01.04.2021 through TOLA, 2021, the assessee had to undergo the process of seeking new approval. However, as narrated earlier, there occurred a mistake of selecting wrong clause/code at the initial stage itself in the very first application dated 26.03.2022 filed by assessee. This mistake perpetuated in subsequent proceedings i.e. grant of provisional approval by department as well as subsequent application dated 30.09.2023 filed by assessee which is rejected by Ld. CIT(E) in impugned order. Ld. AR submitted that there are numerous decisions given 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 the provisions of section 80G(5) 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 clause/code. He submitted that by selection of wrong clause/code, the assessee does not derive any benefit. He submitted that the inadvertent selection of an incorrect clause/code in the electronic application constituted a mere procedural defect capable of rectification and, therefore, it should not be a basis for rejection of assessee’s approval. He submitted that in the situation, he would be satisfied if the present matter is remanded back to the file of Ld. CIT(E) with a suitable direction, for a fresh consideration. He requested that the assessee be permitted to rectify the applicable clause/code, if required by Ld. CIT(E), and that the application be considered afresh on merits after affording due opportunity of hearing. He submitted that such a course of action is also necessary because, for the reasons of confusion and selection of wrong clause/code, the donors who have given substantial donations to assessee would be impacted. He assured that the assessee shall file all necessary details and documents for the satisfaction of Ld. CIT(E) and make an effective representation.

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 the initial application. He submitted that there is no infirmity, perversity or error in the order passed by Ld. CIT(E). Therefore, the impugned order must be upheld.

We have considered rival submissions of both sides. We find that the Legislature has introduced a new regime for granting different types of approvals in section 80G(5) 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 approvals. 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:

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):

Accordingly, this appeal is allowed for statistical purposes.

This appeal is directed against the order bearing DIN: ITBA/EXM/F/EXM45/2025-26/1084897769(1) and dated 19.01.2026 passed by learned Commissioner of Income-tax (Exemption), Ahmedabad [“Ld. CIT(E)”] by which the application dated 29.09.2025 filed by assessee for approval u/s 80G(5) has been rejected.

During hearing before us, the Ld. AR for assessee prayed for not pressing this appeal.

Ld. DR for revenue does not have any objection against prayer of Ld. AR.

Accordingly, this appeal is dismissed as not-pressed.

In result, ITA 230/SRT/2026 & 868/SRT/2026 are allowed for statistical purposes and ITA 231/SRT/2026 is dismissed.