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Facts
The assessee, a registered society, sought permanent registration under section 12AB of the Income Tax Act by filing Form 10AB. The application was rejected by the CIT(E) as non-maintainable due to selecting an incorrect clause, despite the assessee meeting eligibility criteria.
Held
The Tribunal held that the rejection of the application by the CIT(E) was erroneous as it was based on a technical error and opposed to a CBDT circular that extended the due date for filing revised forms. The Tribunal set aside the CIT(E)'s order.
Key Issues
Whether rejection of an application for permanent registration under section 12AB for a technical error in selecting the wrong clause in Form 10AB is justified, especially when a CBDT circular provides for extension of due dates.
Sections Cited
12A, 12A(1), 12A(1)(ac)(i), 12A(1)(ac)(vi), 12AB, 10AB, 10AC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI MANJUNATHA. G. Hon’bleSHRI K. NARASIMHA CHARY, Hon’ble
O R D E R PER MANJUNATHA. G, A M: This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax (Exemptions), Hyderabad passed on 25.06.2024 for the assessment year 2024- 25.
The appeal is time barred by 45 days. The assessee explained the reasons. After hearing both sides, we condone delay in filing the appeal and admit appeal for disposal.
2 ITA 1088/Hyd/2024
The brief facts of the case are that the assessee is registered under the Andhra Pradesh (Telangana areas) Public Societies Registration Act, 1350 on 3rd April 1997. The Society is registered u/s 12A of the Income Tax Act, 1961 on 28-01-2003 w.e.f. 1st April 2002. The Society also obtained provisional registration u/s 12A(1)(ac)(vi) and CPC issued Form 10AC dated 19-01-2023 for three years from Assessment years 2023-24 to 2025-26. The assessee has filed Form 10AB, seeking permanent registration u/s 12AB of the Income Tax Act, 1961 under clause 12A(1)(ac)(vi) instead of 12A(1)(ac)(i) in said Form 10AB. The CIT(E), after considering relevant submissions rejected application filed by the assessee as non-maintainable for choosing wrong clause in Form. 10AB. The CIT(E), further noted that the CBDT vide Circular No 7 of 2024 dt 25-04-2024, extended due date for filing revised Forms up to 30-06-2024.
Aggrieved with the order of ld. CIT(E), the assessee is, now in appeal before the Tribunal.
The ld. Counsel for the assessee submitted that the ld. CIT(E) is erred in rejecting application as non-maintainable, for simple technical error of choosing wrong clause in form 10AB, even though he has satisfied that the assessee is eligible for 3 ITA 1088/Hyd/2024 registration u/s 12AB of the Act. He, therefore submitted that the issue may be remanded to the file of CIT(E) for reconsideration.
The ld. CIT-DR, supporting order of the ld. CIT(E) submitted that the assessee has filed application under wrong provisions and therefore, the ld. CIT(E ) has rightly rejected application and their order should be upheld.
We have heard both the parties, perused materials on record and gone through order of the ld. CIT(E). We, find that the assessee is otherwise satisfied all conditions for registration u/s 12AB of the Act, which is evident from orders passed u/s 12A dt. 28-01-2003 and 12A(1) dated 19-01-2023. In fact, the ld. CIT(E) never disputed the above facts. The only reason for the ld. CIT(E) to reject application is technical mistake of choosing incorrect clause in Form 10AB. The assessee has filed Form 10AB, seeking permanent registration u/s 12AB of the Income Tax Act, 1961 under clause 12A(1)(ac)(vi) instead of 12A(1)(ac)(i) in said Form 10AB. Admittedly, for existing trusts/societies registered u/s 12A and obtained provisional registration u/s 12A(1), clause 12A(1)(ac)(i) is applicable. However, because of ambiguity is Form 10AB, in many cases, incorrect clauses have been ticked and because of this reason, application filed for permanent registration has been rejected by the authorities. Further, considering the hardships faced by trusts/institutions, CBDT has issued Circular No 7 of 2024 dated 25-04-2024 and extended due date for filing
4 ITA 1088/Hyd/2024 revised Form up to 30-06-2024. In the present case, the assessee is having time up to 30-06-2024 for filing revised form, however, the CIT(E) before expiry of due date, has passed order on 25/06/2024 and rejected application filed by the assessee and directed assessee to file new form with correct code in the form. Therefore, we are of the considered view that the order passed by the CIT(E) is contrary to law and opposed to CBDT circular and thus, cannot be upheld. Thus, we set aside the order of the ld. CIT(E) and restore the application filed by the assessee in Form 10AB for permanent registration u/s 12AB of the Act, to the file of the CIT(E) for re-consideration. The assessee is directed to file revised form 10AB with correct section code u/s 12A(1)(ac)(i) within 7 days from the date of receipt of this order and file all particulars to the CIT(E) for consideration. The CIT(E) is directed to reconsider the application filed by the assessee, as if said form is filed within the due date provided as per CBDT circular No 7 of 2024 and deal with application as per law, after providing reasonable opportunity of hearing to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
5 ITA 1088/Hyd/2024
Order pronounced in the Open Court on 15th January 2025.