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Facts
The assessee, an existing Trust with Section 80G approval since 2006, applied for renewal after legislative amendments and received provisional approval. Subsequently, it filed Form 10AB for regular registration under Section 80G. The CIT (Exemptions) rejected this application on the technical ground that the assessee had mistakenly selected section code 80G(5)(iv) instead of 80G(5)(i) in its initial Form 10A application for provisional approval.
Held
The Tribunal held that rejecting the application due to a technical and bona fide mistake in mentioning the sub-section code was not justified, especially given the assessee's history of Section 80G approval. The Tribunal set aside the CIT(E)'s order and remanded the matter back for reconsideration, instructing the assessee to file a rectified application.
Key Issues
Whether the CIT (Exemptions) was justified in rejecting an application for regular Section 80G registration based solely on a technical mistake in selecting the sub-section code, without providing an opportunity for rectification.
Sections Cited
80G, 80G(5)(i), 80G(5)(iv)
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Income Tax Appellate Tribunal, Hyderabad ‘ DB-B ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
Per Vijay Pal Rao, Vice President
This appeal filed by the assessee is directed against the order dated 31/03/2025 of the learned CIT (Exemptions), whereby the application of the assessee seeking approval u/s 80G of the Act was rejected.
The assessee has raised the following grounds of appeal:
ITA 785 of 2025 Prathipati Rangamma & Subbaiah Charitable Trust
The learned Counsel for the assessee has submitted that the application of the assessee was rejected by the CIT (Exemptions) on technical ground for mistake in selection of section code i.e. 80G(5)(iv) instead of 80G(5)(i) of the Act. He has submitted that it is a case of existing Trust having the approval u/s 80G prior to 1/4/2021. However, when the assessee applied for renewal of the approval u/s 80G granted vide order dated 26/09/2006, the CPC granted provisional approval and therefore, the assessee has filed the application in Form-10AB seeking regular registration u/s 80G of the Act which has been rejected on this technical ground.
On the other hand, the learned DR has relied upon the order of the CIT (Exemptions).
ITA 785 of 2025 Prathipati Rangamma & Subbaiah Charitable Trust
We have considered the rival submission as well as the relevant material available on record. At the outset, we note that the CIT (Exemptions) has rejected the application of the assessee for approval u/s 80G by giving the following reasons in para 3 & 4 as under:
Thus, it is clear that the assessee is an existing Trust having approval u/s 80G of the Act vide order dated 20/06/2006 and thereafter, in view of the amendment in the provisions of the Act, the assessee applied for renewal of the approval which was considered by the CPC for provisional approval and granted vide order dated 24/09/2021. Once provisional approval was granted by the CPC, the assessee was left with no option but to file an application in Form 10AB seeking regular approval u/s 80G of the Act. Therefore, a mere technical and bonafide mistake in mentioning the clause of section 80G(5) in the application for renewal of the approval u/s 80G of the Act would not alter the fact that the assessee is an existing Trust having approval u/s 80G dated 26/09/2006. Therefore, rejection of the application on technical ground without giving an opportunity to the assessee or allowing the assessee to rectify the said mistake in the application is not justified. Accordingly, in the facts and circumstances of the case, the impugned order of the CIT (Exemptions) is set aside, and Page 3 of 4
ITA 785 of 2025 Prathipati Rangamma & Subbaiah Charitable Trust the matter is remanded to the record of the learned CIT (Exemptions) for reconsideration of the application of the assessee for registration u/s 80G. The assessee is also directed to file the rectified application for approval u/s 80G of the Act.
In the result, appeal filed by the assessee is allowed for statistical purposes.