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Facts
The Assessee filed an application for registration u/s 12AB of the Income Tax Act, which was assigned to the JAO. The JAO recommended rejection due to an incorrect section code and the application being belated and time-barred. The Ld. Commissioner rejected the application based on this recommendation without affording a hearing.
Held
The Tribunal held that the Ld. Commissioner failed to provide an opportunity of being heard to the Assessee and erred in rejecting the application based on a minor mistake in the section code. The order of the Ld. Commissioner was set aside, and the case was remanded.
Key Issues
Whether the rejection of the registration application without providing an opportunity of hearing to the Assessee is sustainable. Whether a minor error in mentioning the section code can lead to rejection of the application.
Sections Cited
12AB, 12A(1)(ac)(ii), 12A(1)(ac)(iii)-02
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Income Tax Appellate Tribunal, BANGALORE BENCH “A”, BANGALORE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI WASEEM AHMED
Per : Narender Kumar Choudhry, Judicial Member:
These appeals have been preferred by the Assessee against the orders dated 02.03.2023 & 25.03.2025, impugned herein, passed by the Ld. Commissioner of Income Tax (Exemptions) (in short Ld. Commissioner) u/s 12AB of the Income Tax Act, 1961 (in short ‘the Act’).
The issues involved in both the appeals are identical and therefore for the sake of brevity the same were heard together and are being disposed of by this composite order and considering ITA No.1259/Bang./2025 as a lead case and result of the same shall apply mutatis mutandis to both the appeals under consideration.
In this case, the Assessee by filing an application dated 30.09.2024 had sought for registration u/s 12AB of the Act, which was assigned by the Ld. Commissioner to the file of the Jurisdictional Assessing Officer (JAO) for verification. The JAO did not recommend for registration but recommended for rejecting the application by requesting as under:
“ In the application incorrect section code i.e. 12A(1)(ac)(ii)-01 has been mentioned instead of 12A(1)(ac)(iii)-02. Further, provisional registration granted ended on 31.03.2024 (A.Y. 2024-25) and therefore application filed by the Assessee is belated and time barred. Finally, the instant application dated 30.09.2024 which is belatedly filed and time barred u/s 12A(1)(ac)(ii) is infructuous and liable to be rejected. Also due to the fact, though provisional registration is obtained, the trust has applied under wrong code for regularization. Hence, the application may please be rejected.”
The Ld. Commissioner by considering the aforesaid recommendation by the JAO, ultimately rejected the application and cancelled the provisional registration granted to the Assessee.
We observe that the Ld. Commissioner, himself has not carried out any enquiry qua claim of the Assessee and while accepting the recommendation of the JAO as mentioned above and rejecting the application filed by the Assessee and/or non-granting of registration u/s 12AB of the Act and canceling the provisional registration, admittedly failed to give any opportunity of being heard to the Assessee to substantiate its claim and therefore the impugned order in any case is unsustainable in the eyes of law.
We also note that though the Ld. Commissioner was knowing that exact provision to be applied and/or mentioned would be 12A(1)(ac)(iii)-02, however, still he has taken into consideration small mistake in mentioning of the provision as 12A(1)(ac)(ii)-01 of the Act, which is clear-cut inadvertent mistake. Thus, in the peculiar facts and circumstances and considering the case for just and proper decision of the case, equitable relief, fair play and substantial justice, we are inclined to set aside the impugned order and consequently remanding the instant case to the file of the Ld. Commissioner for decision afresh, suffice to say by considering the application filed by the Assessee as filed under the correct provisions i.e. 12A(1)(ac)(iii)-02 of the Act, by sideling the mentioning of wrong provision of the Act by the Assessee and affording reasonable opportunity of being heard to the Assessee. Thus, the appeal is allowed for statistical purposes.
In the result, in view of our decision in both the appeals of the Assessee are allowed in the same terms for statistical purposes.
Order pronounced in the open court on 14.08.2025.