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Facts
The assessee applied for registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961, in Form No. 10AB. The CIT(E) rejected the application, citing that the assessee had selected the wrong section code and failed to provide a copy of the regular registration under Section 12AB, thus deeming the application non-maintainable.
Held
The Tribunal, relying on judicial precedents, held that the incorrect selection of a section code should not be fatal to the application. It set aside the CIT(E)'s order and remanded the matter, directing the CIT(E) to reconsider the application as if filed under the correct section or allow the assessee to rectify/file a fresh application with condonation of delay.
Key Issues
Whether the CIT(E) was justified in rejecting an application for registration under Section 12A due to a wrong section code selection or non-furnishing of existing registration documents, and if such errors should lead to outright rejection.
Sections Cited
12A, 12A(1)(ac)(ii), 12AB, 12AB(1)(b)(i), Rule 17A(2)(e)
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 15.02.2025 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 30.09.2024 in Form No. 10AB under sub-clause (ii) of clause (ac) of sub- section (1) of section 12A of the Income Tax Act, 1961 (the “Act”).
The assessee has raised the following grounds of appeal : “On facts and in law, 1] The learned Commissioner of Income Tax -Exemption erred in rejecting an application of registrations made u/s 12AB of the Income Tax Act, 1961. 2] The learned Commissioner of Income Tax -Exemption erred in rejecting an application of registrations made u/s 12AB of the Income Tax Act, 1961 on the ground the appellant selected wrong clause while making an application. The appellant prays for just, fair & appropriate relief. 3] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
Briefly stated, the facts of the case are that on receipt of the assessee’s application filed in Form No. 10AB u/s 12A(1)(ac)(ii) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in Ld. CIT(E) issued notice on 05.11.2024 through ITBA portal, requesting the assessee to upload certain information/clarification such as self-certified copy of order of regular registration u/s 12AB in Form No.10AC, date of such approval, date of expiry of such approval, proof of identity of main trustees/directors, year-wise list of donations received, note on activities carried out along with supporting credible evidence, details of any other law applicable for achievement of objectives and proof of compliance of said law, details of business undertakings etc. under the provisions of section 12AB(1)(b)(i) of the Act. The compliance was sought by 20.11.2024. On verification of the details/documents submitted by the assessee, the Ld. CIT(E) observed that the assessee has not furnished a copy of the regular registration under section 12AB of the Act and the application has been filed under the wrong section code / wrong clause and hence proceeded to pass the impugned order rejecting the application of the assessee as non-maintainable without going into the merits of the case and drawing no adverse inference against the assessee. The relevant finding and observation of the Ld. CIT(E) is reproduced below : “4. The present application is filed by the assessee under clause (ii) of section 12A(1)(ac) of the Income Tax Act, 1961. The provisions of clause (ii) of section 12A(1)(ac) are related to application for renewal of regular registration of a trust or institution which is already having regular registration under section 12AB of the Act and the period of said registration is about to expire. 4.1 The assessee was specifically requested vide the initial notice to furnish the copy of order of regular registration under section 12AB of the Income Tax Act, 1961. Such copy is actually required to be furnished along with the application itself under the provisions of Rule 17A(2)(e) of the Income Tax Rules, 1962. 4.2 In response to the said notice, the assessee has indicated that they inadvertently selected an incorrect clause while filing the application and request to condone the inadvertent/erroneous selection of clause and allow the application for permanent registration. The request of the assessee cannot be accepted as an application filed under one clause cannot be considered to be filed under a different clause. 4.3 The non-submission of copy of order of regular registration under section 12AB of the Income Tax Act, 1961 establishes the fact that 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.”
Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
5. The Ld. AR at the outset submitted that the Ld. CIT(E) has rejected the assessee’s application for registration under section 12A of the Act on the ground that the assessee has used wrong section code in filing the same. He submitted that this mistake has happened inadvertently by the assessee and the assessee had requested the Ld. CIT(E) to condone the inadvertent/ erroneous selection of clause and allow the application for permanent registration still the Ld. CIT(E) rejected the assessee’s application. He submitted that the Pune Tribunal in catena of decisions on the impugned issue having a similar set of facts, has set aside the order of the Ld. CIT(E) with a direction to consider the application afresh as filed under the correct clause. He relied on the decision of the Pune Bench of the Tribunal in the case of Kimaya Ashram Charitable Trust Vs. CIT, Exemption, Pune in & 2034/PUN/2024, dated 23.12.2024.
The Ld. DR, on the other hand, supported the order of the Ld. CIT(E). He, however, brought to our attention that there is a technical difficulty on the part of the Ld. CIT(E) to treat and dispose off the assessee’s application as filed under the correct section code as per the directions of the Tribunal and hence the assessee may be directed to file the fresh application with the correct clause.
We have heard the heard the Ld. Representatives of the parties, perused the order of the Ld. CIT(E) and the paper book filed on behalf of the assessee and as well as the judicial precedent relied upon by the Ld. AR. The Ld. CIT(E) has rejected the assessee’s application on ground of selection of wrong section code and failure on the part of the assessee to furnish a copy of the regular registration u/s 12AB of the Act read with clause (ii) of section 12A(1)(ac) of the Act. We find that the impugned issue is covered in favour of the assessee by catena of decisions of the various benches of the Tribunal involving similar set of facts as that of the assessee in the present appeal. In our view, wrong selection of section code/clause would not disentitle the assessee to its rightful claim and cannot be treated as fatal to the proceedings initiated after the filing of the application. The case of the assessee finds support by the decision of the Co-ordinate Bench of the Pune Tribunal in Kimaya Ashram Charitable Trust’s case (supra) wherein the Tribunal under the similar fact pattern as that of the assessee in the instant appeal, has remanded the matter back to the file of the Ld. CIT(E) to decide the same afresh with a direction to treat the original application already filed by the assessee as filed under the correct section code. It is, however, worthwhile to note the concern of the Ld. DR that there are
Considering the totality of the facts and in the circumstances of the case and legal position enumerated above, we deem it fit and proper, to set aside the impugned order of the Ld. CIT(E) and restore the matter to his file with a direction to treat the application for grant of registration u/s 12A of the Act as filed under the correct section code and decide it afresh as per fact and law after affording reasonable opportunity of hearing to the assessee. Having said so, in the light of the above concern of the Ld. DR, we also direct that the Ld. CIT(E) shall give an opportunity to the assessee to file the correct application, if needed and condone the delay/ limitation, if any in filing of the fresh application or allow the assessee to rectify the application and then decide the same on merits denovo. The assessee is also hereby directed to remain vigilant and make his submissions on the appointed date without seeking any adjournment under any pretext unless required for the sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order(s) as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 12th August, 2025.
Sd/- Sd/- (R.K. Panda) (Astha Chandra) JUDICIAL MEMBER VICE PRESIDENT पुणे / Pune; दिन ांक / Dated : 12th August, 2025. रदि आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,
िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune