MAHARASHTRA GANDHI SMARAK NIDHI,PUNE vs. C.I.T (EXEMPTION), PUNE, PUNE

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ITA 2651/PUN/2024Status: DisposedITAT Pune30 June 20254 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the wrong selection of a section code/clause in the e-filing of Form 10AB would not disentitle the assessee to its rightful claim and cannot be treated as fatal to the proceedings. The Tribunal referred to the Pune Bench decision in U V Patel Foundation, where a similar order of the CIT(Exemption) was set aside with a direction to decide the application afresh by treating it as filed under the correct section. Considering the totality of facts and in the interest of justice, the Tribunal granted an opportunity to the assessee to substantiate its case before the CIT(Exemption). The impugned order of the CIT(Exemption) was set aside, and the matter was remanded to the CIT(Exemption) to give the assessee an opportunity to file the correct application or treat the original application as filed under the correct section, and then decide the case on merits denovo after granting one final opportunity of hearing. The assessee was directed to remain vigilant and submit required details without seeking adjournments. Since the 80G approval was consequential to the 12A registration, the appeal concerning 80G was also set aside to the file of the CIT(Exemption) on similar terms. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Maharashtra Gandhi Smarak Nidhi, filed applications for registration under Section 12A and approval under Section 80G of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption), Pune, rejected the application for Section 12A registration, citing the assessee's selection of a wrong section code in Form 10AB and the subsequent failure to respond to a show cause notice. The rejection of the 80G approval was consequential to the 12A rejection. The assessee appealed both orders to the Income Tax Appellate Tribunal (ITAT), Pune Bench. The appeals were heard together.

What were the issues?

1. Whether the rejection of the application for registration under Section 12A of the Act by the Commissioner of Income Tax (Exemption) is justified, solely on the ground of the assessee inadvertently selecting a wrong section code in Form 10AB, despite submissions of information and reliance on judicial precedents. 2. Whether the Commissioner of Income Tax (Exemption) should be directed to consider Form 10AB filed on 27.03.2024 as having been filed under Clause (iii) of Section 12A(1)(ac), by condoning any delay or limitation. Assessee's Contentions: The assessee argued that the wrong section code selection was an inadvertent mistake and not fatal to the application. They relied on decisions from the Delhi Tribunal in Raj Krishna Jain Charitable Trust and the Surat Bench in Shree Swaminarayan Gadi Trust, as well as a Pune Bench decision in U V Patel Foundation. The assessee also submitted that non-compliance with the second show cause notice was due to unavoidable circumstances and requested an opportunity to substantiate their case. Revenue's Contentions: The Revenue supported the order of the CIT(Exemption) but had no objection if the matter was restored to the CIT(Exemption) as per the assessee's request.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12A(1)(ac),Section 80G

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Sharad Vaze
For Respondent: Shri Amol Khairnar

आदेश / ORDER PER ASTHA CHANDRA, JM : Two appeals filed by the assessee are directed against the two separate order(s) both dated 13.09.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(Exemption)”] rejecting the application(s) for grant of registration u/s 12A and approval u/s 80G of the Income Tax Act, 1961 (the “Act”). For the sake of convenience, both these appeals were heard together and are being disposed of by this common order.

1.

the assessee has challenged the order of the CIT(Exemption) in rejecting the application for registration u/s 12A of the Act while relates to the order of the CIT(Exemption) in denying the approval u/s 80G of the Act. ITA No.2651/PUN/2025 3. Facts of the case in ITA No.2651/PUN/2025, in brief, are that the assessee filed an application in Form No.10AB on 14.10.2021 for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act. 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 force by the trust / institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal requesting the assessee to upload certain & 2573/PUN/2024 information / clarification. In response to the same, the assessee filed certain details. The Ld. CIT(Exemption) while going through those details found certain discrepancies in the submissions filed by the assessee for which he issued another notice to clarify on those issues. However, in absence of any response from the side of the assessee trust, the Ld. CIT(Exemption) rejected the application filed by the assessee for grant of registration u/s 12A of the Act on the ground of selection of wrong section code by the assessee while filing the said application.

4.

Aggrieved with such order of Ld. CIT(Exemption), the assessee is in appeal before the Tribunal by raising the following grounds: “

1. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Exemptions) Pune, is not justified in rejecting the regular registration even after the submission of information called from the assessee trust The rejection is only on the hyper-technical ground of wrong section code inadvertently / mistakenly used by the assessee in Form 10AB. The Commissioner of Income Tax (Exemptions) Pune be directed to consider Form 10AB filed on 27.03.2024 as having been filed under Clause (iii) of sec 12A(1)(ac), by condoning the delay /limitation, if any.

2. The appellant craves leave to add, alter, omit or substitute any of the grounds at the time of hearing of the appeal.”

5.

The Ld. Counsel for the assessee at the outset submitted that the assessee inadvertently by mistake filed the application in Form 10AB for grant of registration u/s 12A of the Act under the wrong section code, on account of which the Ld. CIT (Exemption) has rejected the assessee’s application. He submitted that the mistake in wrong selection code in e-filing of Form 10AB is not fatal denying the registration of a charitable trust and placed reliance on the decision of Delhi Tribunal in the case of Raj Krishna Jain Charitable Trust (ITA no. 1553/Del/2024) and in the case of Shree Swaminarayan Gadi Trust (2024) 162 taxmann.com 772 (Surat) in support thereof. The Ld. AR also relied on the decision of the Pune Bench of the Tribunal in the case of U V Patel Foundation (ITA No. 1956/PUN/2024, dated 01.12.2024).

5.1 He further submitted that the non-compliance to the show cause notice (second notice) issued by the Ld. CIT(Exemption) was not intentional and has occurred due to certain unavoidable circumstances which were beyond the control of the assessee. He accordingly submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details before the Ld. CIT(Exemption).

& 2573/PUN/2024 6. The Ld. DR, on the other hand, supported the order of the Ld. CIT(Exemption). However, he had no objection if the matter is restored to the file of the Ld. CIT (Exemption) as per the request of the Ld. AR.

7.

We have heard the heard the Ld. Representatives of the parties, perused the order of the Ld. CIT(Exemption) and the paper book filed by the Ld. AR on behalf of the assessee as well as the judicial precedents relied upon by the Ld. AR. We find that the Ld. CIT(Exemption) issued a show cause notice seeking clarification on wrong selection of code by the assessee while e-filing Form 10AB. However, in the absence of any reply furnished by the assessee to the said notice, the Ld. CIT(Exemption) rejected the registration application of the assessee. We find that this issue is no more res-integra and 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. Support may be drawn from the decision of the Pune Bench of the Tribunal in the case U V Patel Foundation (supra) wherein the order of the Ld. CIT(Exemption) was set aside with a direction to decide the application afresh by treating the same as filed under the correct section. It is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate its case by filing all the relevant details before the Ld. CIT(Exemption). Considering the totality of the facts of the case and in the interest of justice, we deem it fit, to grant an opportunity to the assessee to substantiate its case before the Ld. CIT(Exemption) by setting aside the matter to the file of Ld. CIT(Exemption). We, therefore, set aside the impugned order of the Ld. CIT(Exemption) who shall give an opportunity to the assessee to file the correct application/ treat the original application as filed under the correct section and then decide the case on merits denovo as per facts and law, after granting one final opportunity of hearing to the assessee. The assessee is also directed to remain vigilant in respect of the notice(s) of hearing issued by Ld. CIT(Exemption) and submit the details/ documents as may be required/called upon by the Ld. CIT(Exemption) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(Exemption) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

& 2573/PUN/2024 8. In the result, the appeal filed by the assessee is allowed for statistical purposes.

9.

Both the sides are unanimous in stating that the facts of the case in ITA No. 2573/PUN/2024 are similar to the facts in ITA No. 2651/PUN/2024 narrated above. It is the submission of the Ld. AR that since the Ld. CIT(Exemption) has rejected the grant of registration u/s 12A of the Act and cancelled the provisional registration granted earlier, he refused to grant approval u/s 80G of the Act. Since the grant of approval under section 80G is consequential to the registration granted under section 12A of the Act and we have by our above order of even date, set aside the issue of grant of registration under section 12A of the Act for denovo consideration of the Ld. CIT(Exemption), we set aside this appeal too to the file of the Ld. CIT(Exemption) in the same terms. Accordingly, the grounds of appeal raised by the assessee in ITA No. 2573/PUN/2024 are hereby allowed for statistical purposes.

10.

To sum up, both the appeals of the assessee in & 2573/PUN/2024 are treated as allowed for statistical purposes.

Order pronounced in the open court on 30th June, 2025.

Sd/- Sd/- (R.K. Panda) (Astha Chandra) JUDICIAL MEMBER VICE PRESIDENT पुणे / Pune; दिन ांक / Dated : 30th June, 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

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