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Facts
The assessee, Chetna Organic Farmers Association, had a pre-existing registration under Section 12AA. They were required to apply for re-registration under Section 12A(1)(ac) by filing Form 10A. However, they erroneously selected sub-section (vi) instead of (i) and later filed Form 10AB instead of Form 10A. The CIT(E) rejected the application.
Held
The Tribunal condoned the assessee's mistake in selecting the wrong section code and filing the incorrect form. They directed the CIT(E) to hear and dispose of the assessee's request, allowing them to apply now using the correct Form 10A.
Key Issues
Whether the assessee's error in selecting the wrong section code and form for re-registration under Section 12A should lead to the rejection of their application.
Sections Cited
12A, 12AA, 12A(1)(ac), 12A(1)(ac)(i), 12A(1)(ac)(vi)
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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI LALIET KUMAR & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Chetna Organic Farmers Association (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemption), Hyderabad (“Ld. CIT(E)”), dated 13.06.2024 for the A.Y. 2022-23. 2. The assessee has raised the following grounds : “ 1. The Order of the learned Commissioner of Income Tax (Exemption), is erroneous both on facts and in Law in rejecting the application u/s 12A of the I.T act.
1. 2. The action of the learned Commissioner of Income Tax Exemption erred in rejecting application u/s 12A of the I.T act without considering the appellant submissions, therefore order passed by the Learned CIT(Exemption) against the assessee is unjust, arbitrary and deserves to be quashed.
3. That action of the learned Commissioner of Income-tax (Exemption) in not advising the appellant submit form 12A(1)(ac)(i) which was unable to upload in the portal as advised by the, CIT(Exemption) 4. The learned Commissioner of Income-Tax (Exemption)erred in rejecting the application without following the procedure.
5. For these and other grounds that may be urged at the time of hearing, it is submitted that the Order of the lower authorities be set aside or modified as may be deemed fit."
The brief facts of the case are that, the assessee was holding Registration u/s.12AA of the Income Tax Act, 1961 (“the Act”) w.e.f. 25.06.2008. Clause (ac) was inserted in section 12A(1) of the Act w.e.f. 01.04.2021. As per the provisions of section 12A(1)(ac), the person who was registered u/s.12A / 12AA before 01.04.2021 were required to apply for Registration u/s.12A(1)(ac)(i) within the specified time period in form No.10A. The specified time period was finally extended to 30.06.2024 by CBDT vide Circular No.7/2024 dated 25.04.2024. The assessee filed Form No. 10A within the stipulated time, while filing the said form, erroneously selected sub- section (vi) instead of sub-section (i). Based on this incorrect application, the Central Processing Centre, Bangalore (“CPC”) on 10.03.2022 issued Form No. 10AC, granting provisional registration for the period from 2022-23 to 2024-25. Subsequently, realising the error, the assessee filed Form No. 10AB on 04.02.2024, instead of filing Form No. 10A. Ld. CIT(E) issued notices highlighting the error and informing the assessee about the extended date of 30.06.2024, granted by CBDT for filing of Form No.10A. However, the assessee failed to respond to the said notices. Consequently, Ld. CIT(E) rejected the application filed by the assessee on 13.06.2024.
4. Aggrieved with the order of Ld. CIT(E), the assessee filed appeal before the ITAT. The Learned Authorised Representative (“Ld. AR”) submitted that, the filing of incorrect Form was inadvertant and unintentional. He also submitted that, strict adherence to procedural time line in this case caused undue hardship and deprive the assessee the benefits of Registration u/s. 12A of the Act. Therefore, the Ld. AR prayed before the bench to provide one more opportunity to file Form No.10A before the Ld. CIT(E).
Per contra, the Learned Department Representative (“Ld. DR”) submitted that, inspite of sufficient opportunity, the assessee did not file the specified form within the stipulated time period. He objected for grant of further opportunity to the assessee.
We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. There is no dispute about the facts that, the assessee had applied for re- registration as required under the Act twice. However, under both the circumstances, the assessee could not file the application in proper form. Due to application in proper form, the Ld. CIT(E) had rejected the application of the assessee. Under the similar circumstances, the co-ordinate bench of ITAT in the case of Seven Hills Educational Society Vs. ITO (E) (ITA No.858/Hyd/2024 dated 21.11.2024), has allowed one more opportunity to the assessee. The relevant portion of the decision of the ITAT is reproduced as under :
“ 11. It is an undisputed fact that, having possessed the registration under section 12A of the Act, the assessee was supposed to make an application under section 12A(1)(ac)(i) of the Act in which event, the assessee had to submit the application in Form 10A vide Rule 17A of the Income Tax Rules, 1962 (“the Rules”). If the assessee applying by selecting the wrong section code as 02-Sub clause (vi) of clause (ac) of sub-section (1) of section 12A of the Act was a mistake, still it is a mistake on 13/06/2023 also by applying for registration in Form 10AB. If really the assessee wanted to apply under 02-Sub clause (i) of clause (ac) of sub-section (1) of section 12A of the Act on any occasion, the proper form was not Form 10AB, but it should be Form 10A only. Form 10AB is applicable for the section code of 02-Sub clause (ii) or (iii) or (iv) or (v) of clause (ac) of sub-section (1) of section 12A of the Act, whereas for section code 02-Sub clause (i) or (vi) of clause (ac) of sub-section (1) of section 12A of the Act, the application shall be in Form 10A only.
Be that as it may, the fact remains that the assessee did not avail the opportunity of extension of time for filing application in Form 10A, if really its intention is to apply for 02-Sub clause (i) of clause (ac) of subsection (1) of section 12A of the Act, by bringing the mistake to the notice of the authorities, since the assessee holds the registration under section 12A of the Act. When the CBDT took cognizance of the matter and by way of circulars extended the due date for filing Form 10A, it cannot be said that the learned CIT(E) can exercise jurisdiction to condone the delay in applying the Form 10A on the ground of mistake, because the time extended for such purpose by the CBDT expired by 30/06/2024. In these circumstances, we do not find anything illegality or irregularity in the rejection of application by the learned CIT(E).
Now coming to the practical aspect of hardship that has befallen on the assessee, the fact remains that finally vide Circular No.7/2024 dated 25/04/2024, CBDT extended the date up to 30/06/2024, whereas the assessee filed Form 10A by 13/06/2023. Assessee filed another application on 30/06/2024 in Form 10AB by that date. Though in a wrong Form, the request of the assessee was pending before the due date. In this peculiarity of the circumstances, we deem it just and proper to condone the mistake committed by the assessee while applying registration by making a selection of wrong section code, namely, 02-Sub clause (vi) of clause (ac) of sub- section (1) of section 12A of the Act instead of 02-Sub clause (i) of clause (ac) of sub- section (1) of section 12A of the Act. We accordingly condone such a mistake. Learned CIT(E) will proceed to hear and dispose the request of the assessee by allowing it to apply now under Form 10A. Grounds are allowed.” Respectfully, following the decision of co-ordinate bench in the case of Seven Hills Educational Society Vs. ITO (E) (supra), we condone the mistake of the assessee and direct the Ld. CIT(E) to hear and dispose the request of the assessee by allowing him to apply now in Form No.10A. Accordingly, the grounds of the assessee are allowed.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 20th Jan., 2025.