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Facts
The Assessee, having provisional registration under Section 12A, applied for renewal in Form 10AB. The CIT(E) rejected the application, holding it was filed under the wrong section, i.e., 12A(1)(ac)(ii) instead of 12A(1)(ac)(iii). The Assessee contended that the mistake was unintentional and they were not given an opportunity to rectify it or present their case.
Held
The Tribunal held that the Assessee's contention of an unintentional mistake was merited. Since the Assessee was not given an opportunity to explain the defect, the Tribunal set aside the CIT(E)'s order and restored the application.
Key Issues
Whether the rejection of a registration renewal application for filing under the wrong section, without affording an opportunity to the assessee, is justified?
Sections Cited
12A, 12AB, 12A(1)(ac)(iii), 12A(1)(ac)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Commissioner of Income Tax Vs (Exemptions), Mumbai Room No. 601, 6th Floor, Cumballa Hill MTNL, TE Building, Pedder Road, Dr …………. Respondent gopalrao Deshmukh Marg, Cumballa Hill, Mumbai 400026 Appearance For the Appellant/Department : Shri Pawan Choudhary For the Respondent/Assessee : Smt. Sanyogita Nagpal (CIT DR) Date Conclusion of hearing : 10.03.2025 Pronouncement of order : 12.03.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 09/11/2024, 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 12A of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] was rejected.
The relevant facts in brief are that the Assessee was granted Provisional Registration under Section 12A of the Act in Form 10AC [valid from Assessment Year 2022-2023 to Assessment Year 2024- Assessment Year: 2024-25 2025]. The Assessee made an application in Form 10AB seeking renewal of registration which was rejected by way of the order impugned in the following manner:
“2. As the trust is registered, provisions of section 12A(1)(ac)(iii) are applicable to it, which is reproduced as under: (iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier; 3. On perusal of the From 10AB filed by the assessee it was observed that the assessee has applied under section 12A(1)(ac)(ii) which is valid only for trusts already having regular registration for five years and is seeking renewal of regular registration which is due to expire. The assessee, having provisional registration for three years, does not qualify to make the application u/s 12A(1)(ac)(ii).Thus, the application for registration in Form 10AB filed by the assessee is not allowable on the ground of application filed under wrong section.
4. In conclusion this application stands rejected.”
Being aggrieved, the Assessee has preferred the present appeal before this Tribunal.
During the course of hearing the Learned Authorised Representative for the Assessee submitted that the Assessee had applied for renewal of provisional registration. However, the aforesaid application was rejected vide Order, dated 09/11/2024, on the ground that the renewal application was made under wrong provision [i.e. Section 12A(1)(ac)(ii)] which was applicable to charitable organization already holding regular registration and seeking renewal of the same. The grievance of the Assessee is that the Assessee was not put to notice about the defect in the application and the order rejecting application was passed without giving any opportunity to the Assessee. Per contra, the it was submitted by the Learned Departmental Representative that since Assessment Year: 2024-25 the Assessee had made application under incorrect provision, the CIT(E) was justified in rejecting the application.
We have considered the rival submission, perused the material on record and examined the position in law.
It is admitted position that the Assessee was previously granted provisional registration. It is the case of the Assessee that the application was intended to be made under Section 12A(1)(ac)(iii) of the Act. However, inadvertently, the incorrect provision [Section 12A(1)(ac)(iii)] was stated in the application. Since the Assessee was not confronted with defect in the application, the Assessee was not able to explain before the Learned CIT(E) that an unintentional mistake had occurred while filing the application. We find merit in the aforesaid contention advanced on behalf of the Assessee.
Taking into consideration overall facts and circumstances of the present case, we deem it appropriate to grant another opportunity to the Assessee to set out a case for renewal of registration in terms of Section 12A(1)(ac)(iii) of the Act. Accordingly, we set aside the Order, dated 09/11/2024, 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 Section 12A(1)(ac)(iii) of the Act or grant opportunity to the Assessee 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. All rights and contentions of the Assessee are left open.
Assessment Year: 2024-25 8. In terms of paragraph 7 above, the appeal preferred by the Assessee is allowed for statistical purposes. is dismissed.
Order pronounced on 12.03.2025.