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Facts
The assessee, a charitable trust previously approved under Section 80G, re-applied for approval after a 2020 amendment by filing Form No. 10A. It inadvertently selected the wrong section code (clause (iv) instead of clause (i) of the first proviso to Section 80G(5)), leading the Ld. CIT(E) to reject its application for final registration.
Held
The Tribunal determined that the error was a technical mistake, not deliberate, and noted that the Revenue itself had granted provisional registration despite the incorrect code. Highlighting that procedural defects should not override substantive rights, especially for charitable institutions, the Tribunal set aside the CIT(E)'s rejection and remanded the case, directing the CIT(E) to allow the assessee to file a fresh application with the correct section code and decide on merits.
Key Issues
Whether a technical/clerical error in selecting the wrong section code in Form 10A for re-application of Section 80G registration warrants outright rejection, or if the assessee should be afforded an opportunity to rectify the mistake and have the application considered on its merits.
Sections Cited
80G, 80G(5), 80G(5)(i), 80G(5)(iv)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Dr. YVS Murty Charitable Trust (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemptions), Hyderabad (“Ld. CIT(E)”), dated 31.03.2025 for the A.Y. 2024-25.
The assessee has raised the following grounds of appeal :
1. 3. The brief facts of the case are that, the assessee is a charitable trust which had been granted approval under section 80G of the Act vide order dated 17.07.2009. Consequent to the amendments introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, effective from 01.04.2021, the assessee was required to re-apply for approval under section 80G of the Act in Form No. 10A. In accordance with the requirement, the assessee filed Form No. 10A, but inadvertently selected the wrong section code i.e. clause (iv) of first proviso to section 80G(5) of the Act instead of the correct section code i.e. clause (i) of first proviso to section 80G(5) of the Act. Based on the said form, the assessee was granted provisional registration vide Form No. 10AC dated 24.09.2021. Subsequently, the assessee filed Form No. 10AB for conversion of provisional registration into final registration under section 80G of the Act. However, the Ld. CIT(E) rejected the said application solely on the ground that the assessee had originally selected an incorrect section code while filing Form No. 10A.
4. Aggrieved by the rejection order of Ld. CIT(E) , the assessee is now in appeal before the Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that the assessee had been granted valid registration under section 80G of the Act since 17.07.2009. In light of the 2020 amendment, the assessee was required to re-apply through Form No. 10A. However, since the Form No. 10A was newly introduced at that point in time, there was widespread confusion among applicants, and as such, the assessee inadvertently selected section code i.e. clause (iv) of first proviso to section 80G(5) of the Act instead of the appropriate section code i.e. clause (i) of first proviso to section 80G(5) of the Act. It was also submitted that the mistake was a technical error and not deliberate or intentional. The Ld. AR argued that the Revenue was already aware of the assessee’s earlier approval under section 80G since 2009, and yet proceeded to issue a provisional registration under the wrong code. Therefore, the mistake, if any, was two-fold and not solely attributable to the assessee. It was further contended that the trust is engaged in genuine charitable activities and denial of approval merely on account of a technical coding error would be against the principles of justice. The Ld. AR relied on the settled judicial principle that procedural lapses should not defeat substantive rights, especially in the case of charitable institutions. Accordingly, he prayed for the matter to be remanded back to the file of the Ld. CIT(E) with a direction to allow the assessee one more opportunity to file the application in the correct section code and for adjudication of the same on merits.
Per contra, the Learned Departmental Representative (“Ld. DR”) supported the order of the Ld. CIT(E) and submitted that the application was rightly rejected as the assessee had selected an incorrect section code while filing Form No. 10A.
We have heard the rival contentions and perused the records available before us. It is not in dispute that the assessee was holding a valid approval under section 80G since 17.07.2009. Due to statutory changes brought into effect from 01.04.2021, the assessee was required to re-apply using Form No. 10A. It is also admitted that Form No. 10A was newly introduced and many assessees had encountered difficulties and confusion in selecting appropriate section codes during the transition period. The assessee inadvertently selected section code pertaining to clause (iv) of first proviso to section 80G(5) instead of clause (i). This mistake was purely technical in nature. Further, it is evident that the Revenue itself granted provisional registration vide Form No. 10AC dated 24.09.2021 based on the application containing the wrong code, despite having full knowledge that the assessee was already registered under section 80G since 2009.
We are in agreement with the Ld. AR that technical or procedural defects should not come in the way of granting substantive relief, especially where the assessee is a charitable trust engaged in social welfare activities. Accordingly, in the interest of justice and fair play, we set aside the impugned order of the Ld. CIT(E) and restore the matter to his file with a direction to allow the assessee an opportunity to file a fresh application in the correct section code under section 80G, and adjudicate the same on merits after granting due opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purposes
Order pronounced in the open Court on 30th July, 2025.