Loading judgment…
Facts
The assessee, a charitable trust, applied for permanent registration under section 12AB of the Income Tax Act. However, due to a technical error, they quoted the wrong sub-section. The CIT(E) rejected the application without giving the assessee an opportunity to rectify the mistake.
Held
The Tribunal held that the mistake was technical and the trust's genuineness was not in doubt. The CIT(E)'s order was set aside, directing them to consider the application afresh after granting an opportunity of being heard.
Key Issues
Whether the CIT(E) was justified in rejecting the application for permanent registration solely on a technical error in quoting the section, without providing an opportunity for rectification?
Sections Cited
12AB, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
Date of Hearing : 03-07-2025 Date of Pronouncement : 31-07-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Ld.CIT(E) dated 29/01/2025 in which the Ld.CIT(E) had rejected the application filed by the assessee in form 10AB because the assessee had quoted the wrong provision and raised the following grounds: “
1. The impugned order of the Commissioner of Income Tax(Exemptions) Bengaluru in Form No. LOAD dated 29.01.2025 rejecting the application in Form 10AB dated 23.08.2024 is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case.
2. The learned Commissioner of Income Tax (Exemptions) erred in arbitrarily rejecting the application of the appellant-trust in Form 10AB for permanent registration from the existing provisional registration u/s 12AB of the Act on the facts and circumstances of the case.
The learned Commissioner of Income Tax (Exemptions) is not justified in passing the impugned order and rejecting the application in Form 10AB without affording opportunity of curing the minor and inadvertent defect of selecting the wrong section code in the application on the facts and circumstances of the case.
The learned Commissioner of Income Tax (Exemptions) is also not justified in passing the impugned order in gross violation of principles of natural justice without affording the appellant-trust opportunity of being heard on the facts and circumstances of the case.
The learned Commissioner of Income Tax (Exemptions) ought to have condoned the minor and inadvertent defect in selection of the section code and considered the application of the appellant-trust for grant of permanent registration u/s 12AB of the Act in the interest of justice on the facts and circumstances of the case.
6. The learned Commissioner of Income Tax (Exemptions)ought to have appreciated that the application is well within the stipulated time and also that the appellant-trust is eligible / entitled for grant of permanent registration u/s 12AB of the Act which may kindly be granted or directed to be granted to the appellant-trust for advancement of substantial cause of justice on the facts and circumstances of the case.
7. The appellant craves leave of this Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal
as may be necessary at the time of hearing.
8. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity.”
2. The assessee is a charitable registered trust with the objects of promoting education and running educational institutions. In such circumstances, the assessee trust applied for permanent registration in form 10AB on 23/08/2024 but inadvertently, quoted the provision as u/s. 12A(1)(ac)(ii) instead of 12A(1)(ac)(iii). The Ld.CIT(A) without granting an opportunity to the assessee to rectify the said mistake, had rejected the said application on 29/01/2025.
3. As against the said order, the assessee is in appeal before this Tribunal.
4. At the time of hearing, the Ld.AR submitted that there is no iota of doubt about the genuineness and the objects of the trust which are all towards the charitable purposes but only on the technicality, the Ld.CIT(E) had rejected the said application. The Ld.AR further submitted that before rejecting the said application, the Ld.CIT(E) ought to have granted an opportunity to rectify the said defect but without doing so, the Ld.CIT(E) had rejected the said application which is not correct as per the various decisions of the Hon’ble High Courts as well as the Tribunals. The Ld.AR also filed a case law compilation and also filed a synopsis at the time of hearing and prayed that the Ld.CIT(E) may be directed to consider the application afresh. The Ld.AR also brought to our notice that another application was also filed before the Ld.CIT(E) on 27/02/2025 by mentioning the correct provision and sought for a direction from this Tribunal to consider the earlier application filed on 23/08/2024.
5. The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
The assessee trust was formed with the object of promoting education and in running educational institutions and therefore the said objects could be termed as charitable activities. The authorities under the Income Tax Act also does not find the trust is not a genuine one and started for the purpose of enjoying the benefits granted under the provisions of the Act. Therefore, it was established by the assessee that the trust is a genuine one and carried out the charitable activities of providing education and establishing educational institutions. In such circumstances, the trust is entitled for registration u/s. 12A of the Act. But by mistake, while filing the application through online, the assessee trust had mentioned the section as 12A(1)(ac)(ii) of the Act instead of mentioning the correct provision as 12A(1)(ac)(iii) of the Act. It is only a technical mistake and that could have been rectified by the assessee on receipt of any intimation received from the Ld.CIT(A) or the Ld.CIT(E) could have considered the said application under the correct provision and granted the registration as sought for by the assessee. When the objects of the trust and the genuineness of the trust are not in doubt, the registration sought for by the assessee trust could not be denied solely on technicalities. At the maximum, the mistake committed by the assessee can be termed as a technical mistake and on that basis, the said application could not be rejected.
We, therefore set aside the order of the Ld.CIT(E) and direct the Ld.CIT(E) to treat the application filed by the assessee under the correct provision and thereafter decide the application afresh, in accordance with law after granting a reasonable opportunity of being heard to the assessee. In view of the above said order passed by us, it is needless to say that the application filed on 27/02/2025 under the correct provision may not be decided by the Ld.CIT(E).
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 31st July, 2025.