SRI NATARAJA TRUST,CHENNAI vs. CIT, EXEMPTIONS,, CHENNAI

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ITA 2540/CHNY/2024Status: DisposedITAT Chennai05 February 2025Bench: SHRI ABY T. VARKEY (Judicial Member), SHRI AMITABH SHUKLA (Accountant Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned a 5-day delay in filing the appeal, holding that an inadvertent error in selecting the wrong sub-clause should not deny the assessee's right to renewal. The CIT(E)'s order was set aside, and the application was remanded for processing as if filed under the correct Section 12A(1)(ac)(iii), with directions to grant renewal after providing an opportunity of hearing and seeking necessary documents.

What were the facts?

The assessee, an old Trust registered under Section 12AA, obtained provisional registration under Section 12AB after TOLA 2020. For renewal, it inadvertently applied under sub-clause (vi) of Section 12A(1) instead of the correct sub-clause (iii), leading to the rejection of its application by the Ld. CIT(E).

What were the issues?

Whether the CIT(E) was justified in rejecting the renewal application due to an inadvertent error in citing the sub-clause, and whether such an application can be treated as if filed under the correct provision for renewal of registration.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12A(1)(i),Section 12A(1)(iii),Section 12A(1)(vi),Section 12AB,Section 12A(1)(ac),Section 12A(1)(ac)(iii),Section 12A(1)(ac)(vi),Section 12AB(1)(b),Section 12AB(1)(b)(ii)(A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA

For Respondent: Mr. Nilay Baran Som, CIT
Hearing: 24.12.2024Pronounced: 05.02.2025

आदेश / O R D E R

PER ABY T. VARKEY, JM:

1.

1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Exemptions), (hereinafter in short ‘the Ld.CIT(E)’), Chennai, dated 27.07.2024.

2.

At the outset, the Ld. Counsel for the assessee submitted that there is a delay of ‘5’ days in filing of this appeal and explained the cause for :: 2 ::

1.

delay which we note are sufficient cause, which prevented the assessee from filing of appeal within the time prescribed, therefore, we condone the delay of ‘5’ days and proceed to adjudicate the appeal on merits.

3.

Brief facts are that the assessee is an old Trust formed on 02.06.2003 which enjoyed registration u/s.12AA of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘), from the year 2007 onwards; and after the Parliament passed TOLA 2020 w.e.f.01.04.2021, the assessee had to apply for re-registration under sub-clause (i) of Clause (1) of Sec.12A of the Act, which assessee did and was granted provisional registration on 27.05.2021 for five years. Thereafter, as per the Scheme of the new regime, the assessee had to file for renewal under sub-clause (iii) of clause (1) of Section 12A of the Act, whereas, it inadvertently applied under sub-clause (vi) of this provision and because of which, it was inter-alia rejected by the Ld.CIT(E). Aggrieved, the assessee is in appeal before us.

4.

Having heard both parties, we find that assessee Trust is an old Trust which enjoyed registration u/s.12A of the Act from the year 2007 onwards; and after TOLA 2020, the assessee was granted provisional registration u/s.12AB of the Act for five years by order dated 27.05.2021.

Thereafter, the assessee inadvertently filed application under sub-clause (vi) of clause (1) of section 12A of the Act, whereas assessee had to file

:: 3 :: application under sub-clause (iii) of clause (1) of section 12A of the Act.

The Ld.CIT(E) inter-alia, taking note of the wrong provision under which assessee filed for registration u/s.12AB of the Act, was pleased to reject the same, which we do not approve; and is of the view that merely because of inadvertent mistake in filling up sub-clause (vi) instead of sub clause (iii), the assessee’s right for renewing the registration u/s.12AB of the Act can’t be denied. Therefore, we are of the considered opinion that the inadvertent mistake of the assessee clicking online for renew its registration under clause (vi) of sec.12(1)(ac) needs to be intervened and rectified; therefore, the assessee’s application for registration under sub- clause (vi) needs to be treated as if assessee has applied under clause (iii) of sec.12A(1)(ac) of the Act. In the light of the discussion, we set aside the impugned order of the Ld.CIT(E) dated 27.07.2024 and restore the assessee’s application for renewing the registration back to the file of the Ld.CIT(E) and direct him to process the application filed by assessee on 01.01.2024 in Form 10 as if filed u/s.12A(1)(ac)(iii); and the competent authority is at liberty to call for any documents including asking assessee to file hard copy of Form 10 u/s.12A(1)(ac)(iii); and thereafter, decide to grant renewal of the registration u/s.12AB(1)(b) of the Act for five (5) years as contemplated under sub-clause (ii)(A) of section 12AB(1)(b) of the Act. Needless to say, assessee be given opportunity of hearing and assessee to file relevant documents and written submissions as called for by the Ld.CIT(E) and pass orders after hearing the assessee in accordance to law.

5.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on the 05th day of February, 2025, in Chennai.

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