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Facts
The appellant's application for registration under section 12A of the Income Tax Act was rejected by the CIT(E) for selecting the wrong section code in Form 10AB. The appellant did not appear for the hearing, but the tribunal considered the matter based on the record and the impugned order.
Held
The Tribunal held that the rejection of the application solely based on the wrong section code selection was not appropriate as it was an inadvertent mistake. The CIT(E) was directed to grant the appellant an opportunity to rectify the application and decide the case on merits.
Key Issues
Whether the rejection of an application for registration under Section 12A solely for selecting a wrong section code, without considering the merits, is justified.
Sections Cited
12A, 12A(1)(ac)(ii), 12A(1)(ac)(iii), 12A(1), 12A/12AB, 12A(1)(ac)(iv)
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & MS.ASTHA CHANDRA
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of appellant is directed against the rejection of application for registration u/s.12A of the Act framed by ld.CIT(E) dated 04.02.2025.
When the appeal was called for, none appeared on behalf of the appellant despite due service of notice of hearing. With the assistance of ld. Departmental Representative and perusal of the impugned order, we find that ld.CIT(E) has rejected the appellant’s application filed on Form 10AB for registration u/s.12A(1)(ac)(ii) solely on the ground of selecting the wrong section code observing as follows :
“6. The assessee has, thus, admitted that it does not have a valid regular registration under section 12A(1)(ac) of the Act under clause (i) or (iii) of the Act. Such registration is actually required to be furnished along with the application itself under the provisions of Rule 17A(2)(e) of Kshatriya Dnyati Maratha Samaj Sanghatana the Income Tax Rules, 1962. Therefore, the prerequisite for application under clause (ii) of Section 12A(1)(ac) of the Income Tax Act, 1961 is not fulfilled in this case. Therefore, prima-facie it appears that the application is not maintainable.
In view of the above, the application filed by the assessee is treated as non-maintainable and hence, 'rejected' for statistical purposes without going into the merits of the case and no adverse inference is drawn against the assessee.”
We have heard the ld. Departmental Representative and perused the record placed before us. The main grievance of the issue agitated in this appeal is selection of wrong section code by the appellant pertaining to renewal of regular registration other than section 12A(1)(ac)(iii) of the Act. This issue is no more res integra by virtue of series of decisions by this Tribunal. We note that similar issue came up for adjudication before Coordinate Bench, Surat in the case of Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs. CIT (Exemptions), Ahmedabad in & 370/Srt/2024, dated 13.05.2024 and the finding of the Tribunal reads as under :
“5. We have considered the submissions of both the parties and perused the record carefully. There is no dispute that the appellant applied for registration under Section 12A/12AB of the Act under Form 10AB on 28.09.2023. The ld. CIT(E) while considering the application of appellant noted that the application filed by appellant is not maintainable and accordingly, a show cause notice dated 02/11/2023 was issued for seeking clarification. The appellant responded to the show cause notice of ld CIT(E) vide their reply dated 15.12.2023. The contents of show cause notice and the reply thereof is not recorded by ld CIT(E) in his order. We find that the appellant vide their reply dated 15/12/2023 prayed to consider the application in appropriate sub- clause of section 12A(1). The ld CIT(E) held that he has no power to change/ amend or rectify Form-10AB. We find that it was an inadvertent mistake and the appellant has already explained the facts and prayed for correction before the ld. CIT(E). In our view the mistake in filing entry was not fatal and could be considered in appropriate sub-clause or clause of section 12A(1). Otherwise, the appellant has provided all the details and information in Form-10AB, while applying for registration under section 12A/12AB. Being first appellate Kshatriya Dnyati Maratha Samaj Sanghatana authority, the plea of appellant for correction in Form-10AB is accepted and the order of ld CIT(E) is set-aside. The registry official of ld CIT(E) maintaining record of ITBA portal about the registration of trust under section 12A/12AB is directed either to correct such mistake or allow the appellant to rectify or amend the relevant clause/ sub-clause of section 12A(1). Considering the fact that the application of appellant was not considered on merit, therefore, we deem it appropriate to direct the ld. CIT(E) to treat the application of appellant under Section 12A(1)(ac)(iii) in place of Section 12A(1)(ac)(iv) of the Act and to consider the case on merit and pass the order in accordance with law. Needless to direct that before passing the order, the ld CIT(E) shall grant opportunity of hearing to the appellant. The appellant is also directed to furnish complete details to prove its object and activity and make all compliances as desired by the ld. CIT(E). In the result, the grounds of appeal raised by the appellant are allowed for statistical purposes only.”
In light of the above decision and having given our thoughtful consideration to the given facts and circumstances prevailing in the instant case, we are of the opinion that since ld. CITE) has himself held that the appeal is not maintainable and ‘rejected’ for statistical purposes which means that he has given the opportunity to file a revised application. Further we are of the view that wrong selection of section code/clause would not disentitle the appellant to its rightful claim. Selection of wrong clause by the appellant cannot be treated as fatal to the proceedings initiated after the filing of the application. We therefore in the interest of natural justice and being fair to both the parties deem it appropriate to grant one more opportunity to the appellant, setting aside the impugned order to the file of ld. CIT(E). The ld.CIT(E) shall give an opportunity to the appellant to file the correct application and then decide the case on merits denovo after granting reasonable opportunity to the appellant. Appellant is also directed to remain vigilant and make satisfactory compliance to the notice(s) of hearing issued by ld.CIT(E). It should refrain from taking adjournments unless otherwise Kshatriya Dnyati Maratha Samaj Sanghatana required for reasonable cause. Effective grounds of appeal raised by the appellant are allowed for statistical purposes.
5. In the result, the appeal of the appellant is allowed for statistical purposes.
Order pronounced on this 14th day of August, 2025.