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Facts
The assessee applied for registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961, using Form No. 10AB. The Ld. CIT (Exemption) rejected the application, deeming it non-maintainable, on the ground that the assessee had selected the wrong section code.
Held
The Tribunal held that the CIT (Exemption) erred in rejecting the application solely for a technical mistake without considering the actual charitable nature and activities of the Trust. The Tribunal set aside the CIT(Exemption)'s order and remanded the matter for fresh consideration, directing the CIT(Exemption) to grant the assessee an opportunity to correct the section code and be heard.
Key Issues
Whether an application for registration under Section 12A can be rejected merely for a technical error in selecting the wrong section code, and if the applicant should be allowed to rectify such an error.
Sections Cited
12A(1)(ac)(ii), 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Exemption)-Kolkata [hereinafter referred to as the ‘Ld. CIT (Exemption)’] passed in respect of registration u/s 12A(1)(ac)(ii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 07.03.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the Ld. CIT(A) erred in rejecting the application for registration for technical mistake in selecting correct code.
For that the Ld. CIT (E) observed that the application was rejected for statistical purposes and that the assessee can file afresh form no.10AB, however the portal does not allow the assessee to upload fresh form since I.T.A. No.: 1041/KOL/2025 Assessment Year: N.A. M/s. Rotary Club of Hooghly Welfare Trust. one form was already uploaded (which is rejected) and therefore the Ld. CIT(E) may be directed to take physically corrected form and then to decide the application in accordance with law.
For that in the circumstances of the case the Ld. CIT(E) should have allowed the application by physically rectifying the form already on records since system does not allow uploading of fresh form 10AB.
For that in the circumstances of the case the assessee being charitable institution may please be granted relief prayed for.”
Brief facts of the case are that the assessee had filed an application for registration u/s 12A(1)(ac)(ii) of the Act in Form No. 10AB. This application was found to be prima-facie non-maintainable and accordingly, vide letter dated 08.02.2025, certain clarifications were sought from the assessee by the Ld. CIT (Exemption). In response thereof, the assessee submitted its reply. On perusal of the submissions made by the assessee, the Ld. CIT (Exemption) found that the assessee had selected the wrong section code while applying on Form No. 10AB and accordingly cancelled/dropped the application as non- maintainable.
Aggrieved with the order of the Ld. CIT (Exemption), the assessee has filed the appeal before the Tribunal.
We have heard the rival contentions and have also gone through the facts of the case. During the course of the appeal, though the assessee sought adjournment, however, the Bench was of the view that the Ld. CIT (Exemption) had denied the claim of exemption u/s 12AB of the Act merely on account of selecting wrong section code applicable for registration of the Trust against the provisional registration while the requirements of the Trust existing for charitable and carrying out charitable activities were primarily to be examined. Therefore, in the interest of justice, it was considered imperative that the assessee may I.T.A. No.: 1041/KOL/2025 Assessment Year: N.A. M/s. Rotary Club of Hooghly Welfare Trust. be granted another opportunity to file its submission in response to the notice issued by the Ld. CIT (Exemption) for justifying the genuineness of the activities and claim of approval. Hence, the order of the Ld. CIT (Exemption) is set aside and the matter is remanded to him for deciding the application afresh after granting an opportunity of being heard to the assessee, allowing an opportunity to the assessee to correct the section code and seeking the reply from the assessee in respect of the queries raised and thereafter consider the application in accordance with law. For statistical purposes, the grounds of appeal are partly allowed.
In the result, this appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 27th October, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 27.10.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1041/KOL/2025 Assessment Year: N.A. M/s. Rotary Club of Hooghly Welfare Trust. Copy of the order forwarded to:
M/s. Rotary Club of Hooghly Welfare Trust, Mithapukur PO, Adcconagar, Hooghly, West Bengal, 712121. 2. CIT (Exemption), Kolkata.
CIT(A)-
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order