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Facts
The Assessee's application for registration under Section 80G was rejected by the CIT(E) for an inadvertent error in selecting the sub-clause. The Assessee contended that they were not given an opportunity to be heard, and the rejection was based on a technicality.
Held
The Tribunal held that the rejection was based on a technical error without granting the Assessee an opportunity to be heard, which violates principles of natural justice. The Tribunal set aside the order and restored the application.
Key Issues
Whether the CIT(E) erred in rejecting the Section 80G application due to a technical error without providing an opportunity to be heard, violating principles of natural justice.
Sections Cited
80G, 10(23C), 11, 12
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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
order : 29.04.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 28/12/2024, passed by Commissioner of Income Tax (Exemption), Mumbai [hereinafter referred to as the ‘CIT(E)’] whereby the application filed by the Assessee in Form No.10AB seeking registration under Section 80G of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] was rejected.
The Assessee has raised following grounds of appeal :
1. 1. The Learned CIT(E) erred in rejecting the application for final registration u/s.80G(5) of the Income Tax Act, 1961 without granting any opportunity to be heard in this matter as required under the second proviso to section 80G(5) of the Assessment Year: 2024-25 Act. That not giving opportunity is against the principle of natural justice and the order may be set aside.
2. The Ld. CIT(E) erred in rejecting the application relying on conditions specified in sub clause (B) of first proviso to section 80G(5), that the application can be made under this clause only if the trust has not claimed any exemption u/s. 11, 12 or 10(23C) before the date of application. The Ld. CIT(E) erred in not appreciating that the said condition has been deleted from sub-clause B with effect from 01 October, 2024 and rejection owing to non-compliance to such condition is invalid and illegal.
3. The Ld. CIT(E) erred in rejecting the registration u/s. 80G merely on an inadvertent error in selecting the correct sub- section while filing the application for final registration in Form 10AB leaving the appellant remedy less. That rejecting the application based on an error/technical irregularity is unjustified.
We have heard both the sides and have perused the material on record.
The grievance of the Assessee is that the application filed by the Assessee for seeking approval under Section 80G of the Act was rejected without taking into consideration the documents and details filed along with the application which would should show that the Application was intended to be made under Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act. It was submitted that since the Assessee was not granted opportunity, the Assessee was not able to explain before the Learned CIT(E) that an unintentional mistake had occurred while filing the application form as the Assessee had incorrectly stated in the application form that the application was being filed under Clause (iv)(B) of 1st Proviso to 80G(5) of the Act [instead of Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act]. For the aforesaid reason alone the application filed by the Assessee was rejected. Per contra, it was submitted by the Learned Departmental Representative that admittedly the Assessee had committed a mistake while filling up Assessment Year: 2024-25 the form and therefore, the application was rightly rejected.
Taking into consideration overall facts and circumstances of the present case we deem it appropriate and in the interest of justice to grant another opportunity to the Assessee to make out a case for grant of approval in terms of Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act. Accordingly, we set aside the Order, dated 28/12/2024, passed by the Learned CIT(E) and restore the application filed by the Assessee to its original number. The Learned CIT(E) is directed to either treat the application filed by the Assessee as application filed under Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act or grant opportunity to the Appellant to file rectified application. It is clarified that the Learned CIT(E) would be at liberty to decide upon the merits of the application as per law after granting the Assessee an opportunity to make submission and file documents/details in support of the application. The Assessee is directed to file all documents and details along with rectified application before the Learned CIT(E) forthwith.
In terms of paragraph 5 above, the appeal preferred by the Assessee is allowed for statistical purposes.
Order pronounced on 29.04.2025.