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Facts
Two assessees (Sri Kurumurthy Swamy Devasthanam and Sri Maisamma Devatna Ammavari Devasthanam) filed applications for registration u/s 12AB and approval u/s 80G of the Income Tax Act, which were rejected by the CIT (Exemptions). The rejection was primarily on technical grounds, specifically an inadvertent error in selecting the wrong section code (12A(1)(ac)(i) instead of 12A(1)(ac)(vi)) in Form 10A/10AB. There was also a 19-day delay in filing the appeals before the Tribunal, for which condonation was sought.
Held
The Tribunal condoned the 19-day delay in filing the appeals, accepting it as a bonafide mistake due to administrative and technical difficulties. Citing previous decisions, the Tribunal held that a technical error in selecting the wrong section code could not be a ground for denying registration u/s 12AB and approval u/s 80G. Therefore, the Tribunal set aside the CIT(E)'s orders and remanded the matters back to the CIT(E) to allow the assessees to rectify the mistake in their application forms and then decide the applications on their merits after providing an opportunity of hearing.
Key Issues
1. Whether the delay in filing appeals before the Tribunal should be condoned. 2. Whether the rejection of applications for registration u/s 12AB and approval u/s 80G due to a technical error in selecting the wrong section code is justified.
Sections Cited
12A, 12A(1)(ac), 12AA, 12AB, 80G, 80G(5)
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Income Tax Appellate Tribunal, Hyderabad ‘ DB-B ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
िनधा��रती �ारा/Assessee by: Shri K.A. Sai Prasad, CA राज� व �ारा/Revenue by:: Dr. Narender Kumar Naik, CIT(DR) सुनवाई की तारीख/Date of hearing: 04/09/2025 घोषणा की तारीख/Pronouncement: 10/09/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President These are two set of 2 appeals filed by 2 assessees against the 4 separate orders, all dated 21/03/2025 of the learned CIT (Exemptions), Hyderabad for the A.Y.2025-26 whereby the applications of 2 assessees for registration u/s 12AB and approval u/s 80G were rejected.
There is a delay of 19 days in filing these 2 set of 2 appeals. The assessees have filed their petition for condonation of Page 1 of 13 delay which are supported by the affidavits of the Executive Officer of the Endowment Department of the Devasthanams
We have heard the learned Counsel for the assessee as well as the learned DR on the condonation of delay. The learned Counsel for the assessee has submitted that all these matters were handled by one Tax Consultant and Auditor of the Society/ Temples Shri U. Ravi Kumar, C.A. However, due to the busy schedule of the Authorized Signatory of the respective Templers, the appeal papers sent by the Tax Consultant could not be signed in time and sent back to the Tax Consultant for filing the appeals within the period of limitation. Thus, there was a minor delay of 19 days in filing the appeals in case of both the assessees. The learned Counsel for the assessee has submitted that the delay in filing these appeals is neither intentional nor deliberate but due to the reason that the concerned authorized persons to sign the appeal memo papers were not available at the relevant point of time and therefore there is a delay of 19 days in filing the appeals. He has pleaded that the delay in filing the appeals may be condoned.
On the other hand, the learned DR has not seriously objected to the condonation of the delay in filing these appeals.
We have considered the rival submissions and carefully perused the reasons explained by the assessees in the affidavits filed on behalf of Shri Kurumurthy Swamy Devasthanam and Sri Maisamma Devatna Ammavari
Page 2 of 13 Devasthanam, Mahabubnagar. The affidavits filed by the Executive Officers of these Temples read as under: ITA No.1044/Hyd/2025
6. Considering the reasons explained by the assessee as well as the submissions of the learned Counsel for the assessee, we are satisfied that the assessees were having a reasonable cause for the delay of 19 days in filing of these appeals.
Page 4 of 13 Accordingly, we condone the delay of 19 days in filing the appeals in case of Sri Kurumurthy Swamy Devasthanam and Sri Maisamma Devatna Ammavari Devasthanam, Mahabubnagar.
7. The assessees have raised common grounds of appeal in all the 4 appeals. For the sake brevity, grounds raised by the assessee in and 1044/Hyd/2025 are reproduced hereunder: ITA No.1043/Hyd/2025
The learned Counsel for the assessee has submitted that the CIT (Exemption) has rejected the applications of these appeals for registration u/s 12AB as well as approval u/s 80G of the Act on technical ground of mistake in mentioning the section code without giving an opportunity to the assessee to rectify the same. The learned Counsel for the assessee has further submitted that the rejection of the application by the assessee on this technical ground is unjustified and arbitrary. This was only a bonafide mistake and therefore, the application for registration u/s 12AB as well as approval u/s 80G of the Act ought to have been considered on merits instead of technical reasons. In support of his contention he has relied upon the decision of this Tribunal dated 16/07/2025 in the case of Aashritha The Dr U Sankaranarayana Raju Charitable Trust vs. CIT (Exemption) in and 209/Hyd/2025.
On the other hand, the learned DR has submitted that the assessee has not disputed the mistake in the application for seeking registration u/s 12AB as well as approval u/s 80G of the Act. The assessee has chosen the wrong application for submitting the application and also incorrect provisions of section 12A of the I.T. Act. He has relied upon the impugned order of the CIT (Exemption).
We have considered the rival submissions and carefully perused the impugned order of the CIT (Exemptions). The CIT (Exemptions) which read as under:
Thus, it is clear that the CIT (Exemption) has rejected all these applications of the 2 assessees filed for registration u/s 12AB as well as approval u/s 80G of the Act on the ground that the assessee has selected a wrong section code i.e. 12A(1)(ac)(i) instead of section code 12A(1)(ac)(vi). Thus, only due to the mistake in sub clause of section 12A(1)(ac), the learned CIT (Exemption) has rejected all these applications which is highly technical. It is pertinent to note that this is only an inadvertent mistake in selecting the section code while filing the application for registration u/s 12AB as well as approval u/s 80G(5) of the Act. At the outset we note that this Tribunal in case of Aashritha The Dr U Sankaranarayana Raju Charitable Trust vs. CIT
Page 8 of 13 (Exemption) (Supra) has considered an identical issue in para 5 to 7 as under: “5. We have considered the rival submissions as well as the relevant material available on record. There is no dispute that the assessee Trust was an existing Trust and was having registration u/s 12A as well as approval u/s 80G prior to 1/4/2021. Therefore, in view of the amended provisions of section 12A as well as section 80G, after 1/4/2021, the assessee was required to apply for renewal of registration u/s 12AB as well as approval u/s 80G of the Act. The assessee filed the application in Form 10A for the registration u/s 12AB as well as approval u/s 80G but due to inadvertent and bonafide mistake in selecting the wrong section code and particularly, the clause of section 12A(1) as well as proviso to section 80G(5), the application filed by the assessee in Form 10A was considered as an application for provisional registration as well as approval and consequently, the CPC granted provisional registration in Form 10AC instead of granting the renewal of registration u/s 12AB as well as section 80G(5) of the Act. Thereafter, the assessee filed the application in Form 10AB for seeking regular registration u/s 12AB as well as approval u/s 80G(5) which were rejected by the CIT (Exemptions) by giving the identical reasons. The reasons given for rejection of application for regular registration u/s 12AB of the Act are as under:
Thus, the CIT (Exemptions) has not doubted or questioned the other requirements and conditions satisfied by the assessee being a Trust having charitable objects and also carrying out the charitable activities since past several years, but the application of the assessee was dismissed only on the technical ground of wrong selection of section code. It is a matter of fact that the assessee initially applied in Form 10A but due to some technical bonafide mistake, a provisional registration as well as approval was granted which cannot be a reason for denial of renewal of the registration u/s 12AB as well as approval u/s 80G(5) of the Act. The application of the assessee ought to have been decided by the CIT (Exemptions) based on the undisputed fact and not on the technicalities. This Tribunal has considered this issue in a series of decisions as relied upon by the learned AR of the assessee. In the case of Telangana State Chapter Indian Radiological & Imaging Association vs. Income Tax Officer (E) (Supra), the Tribunal has considered an identical issue in para 11 to 13 as under: “11. We have heard the rival contentions of the parties and perused the material available on record. Admittedly, the assessee was a society, which was holding registration u/s. 80G of the Act prior to 31.03.2021 and was required to submit the application u/s. 80G(5) of the Act after ticking the correct 'section code-12' in form 10A. However, on account of the error in submitting the correct application, the provisional registration was granted to the assessee on 19.03.2022. As per the section 80G(5)(iii) of the Act, the assessee was required to file an application for permanent registration within six months of grant of provisional registration. The relevant portion of the Act, provides as under: (iii) where the application is made under clause (iv) of the said proviso, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the institution or fund: Provided also that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the first proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received:
Page 10 of 13 Provided also that the approval granted under the second proviso shall apply to an institution or fund, where the application is made under-- (a) clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund. (b) clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved. (c) in any other case, from the assessment year immediately following the financial year in which such application is made.] 12. Since in the present case, on account of the mistake committed by the assessee, while filing the application, the provisional registration was granted to the assessee on 19.03.2022 and, therefore, the assessee had filed the application for grant of permanent registration vide application dt. 30.09.2022, being the existing continuing society.
The application of the assessee has been rejected by the ld.CIT(E) on the pretext that the assessee was having registration upto assessment year 2024-25. And further the assessee has not submitted the document for verification. In our view, the assessee, being a society was registered even prior to 31.03.2021 and thereafter had applied for registration, as mentioned herein above on provisional basis. In our considered opinion, though the assessee had committed a mistake in selecting the wrong section code 11 while making an application at the first instance, however, for such a mistake, the permanent registration cannot be denied by the respondent. In our view, the respondent is also duty bound to cross-verify the details, submitted by the assessee at the time of issuance of provisional certificate and should have issued a notice at that time by pointing out the wrong selection of section code by the assessee. Thus, the assessee as well as Revenue both are at fault. In view of the above, we deem it appropriate to remand back the matter to the file of the ld.CIT(E) with a direction to permit the assessee to rectify the mistake in submitting the application form and with a further direction to consider the application of assessee for grant of permanent registration. Needless to say, that the assessee is also directed to co-operative with the ld.CIT(E) and shall file all the necessary details as may be required by the authorities so as to facilitate earlier and speedy disposal of the case.”
Accordingly, a bonafide mistake in selecting wrong section code cannot be a ground for denial of registration u/s 12AB as well as approval u/s 80G(5) of the Act. Hence, , in the facts and circumstances of the case, we set aside the impugned order of the CIT (Exemptions) in both the appeals and matters are remanded to the record of the CIT (Exemptions) with the direction to permit the assessee to rectify the mistake in the application form and then consider the applications of the assessee for grant of registration u/s 12AB as well as approval u/s 80G of the Act by passing an order on merits of the matter after giving an opportunity of hearing to the assessee. We order accordingly.
Accordingly, in the facts and circumstances of the case and in view of the earlier orders of this Tribunal, we hold that a bonafide mistake in selecting section code cannot be a ground for denial of registration u/s 12AB as well as approval u/s 80G of the Act. Thus, we set aside the impugned orders of the learned CIT (Exemption) whereby the applications for registration u/s 12AB as well as registration u/s 80G of the I.T. Act in respect of these 2 assessees were rejected with the direction to permit the assessee to rectify the mistake in the application forms and then consider the applications of the assessees for registration u/s 12AB as well as approval u/s 80G of the Act on merits by a speaking order after giving an opportunity of hearing to the assessee.