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Coral Foundation Thane, Thane vs CIT | s.12AB, 12A(1)(ac)(vi)(B) | ITAT Mumbai 2025 | BharatTax

CORAL FOUNDATION THANE,THANE vs. COMMISSIONER OF INCOME TAX (EXEMPTION) , MUMBAI

ITA 2464/MUM/2025Status: DisposedITAT Mumbai24 July 2025Bench: HON’BLE SHRI SANDEEP GOSAIN (Judicial Member), SHRI PRABHASH SHANKAR (Accountant Member)6 pages

AI SummaryAllowed

Facts

The assessee challenged the CIT(E)'s order rejecting their application for registration under Section 12AB of the Income Tax Act. The rejection was based on the ground that the assessee applied under the wrong sub-clause (12A(1)(ac)(vi)(B)) instead of the correct one (12A(1)(ac)(iii)). The assessee argued it was an inadvertent mistake and had explained it to the CIT(E).

Held

The Tribunal held that the mistake in selecting the wrong sub-clause was inadvertent and not fatal. It directed the CIT(E) to treat the application as filed under the correct sub-clause, consider it on its merits after providing an opportunity of hearing, and decide the case accordingly.

Key Issues

Whether an inadvertent mistake in selecting the wrong sub-clause for registration under Section 12AB of the Income Tax Act can be fatal to the application, and if the CIT(E) has the power to allow correction of such mistakes.

Sections Cited

12AB, 12A(1)(ac)(vi)(B), 12A(1)(ac)(iii), 12A(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH MUMBAI

Before: HON’BLE SHRI SANDEEP GOSAIN & SHRI PRABHASH SHANKAR

For Appellant: Shri RP Dawre (Virtually Appear)

For Respondent: Shri RA Dhyani, (CIT DR)

Hearing: 09.07.2025Pronounced: 24.07.2025

Date of Hearing 09.07.2025 Date of Pronouncement 24.07.2025 आदेश / ORDER

PER SANDEEP GOSAIN, JM:

1.

1. The present appeal has been filed by the assessee challenging the impugned order dt. 14.02.2025 passed Form No. 10AD of the Income Tax Act, 1961 (‘the Act’), by the Commissioner of Income Tax (Exemption), Pune.

2.

Ground No. 1 & 2 raised by the assessee are interrelated and interconnected and relates to challenging the order of CIT(E) in not granting registration u/s 12AB of the Income Tax Act. Therefore we have decided to adjudicate these grounds through the present consolidated order.

3.

We have heard the counsels for both the parties, perused the material placed on record, judgement cited before us and also the orders passed by the revenue authorities.

4.

As per the facts of the case, registration u/s 12AB of the Act applied by the assessee was rejected on the ground that the provisions under which assessee had applied for registration. u/s 12A(1)(ac)(vi)(B) is not applicable. However, the correct application should have been filed under clause (iii).

5. During the pendency of the application before CIT(E), assessee prayed to treat the said application u/s Sub clause (iii) of clause (ac) of section 12A(1) but the said request was not accepted by CIT(E).

5.

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) 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