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Facts
The appeals were filed against the rejection of applications for regular registration and approval for exemption by the CIT(E). The appeals were delayed by 9 days, and the appellant attributed the delay to the trustee being out of town. The core issue was the selection of the wrong section code while filing the application.
Held
The Tribunal condoned the delay, finding a reasonable cause. It held that the mistake in selecting the wrong section code was not fatal and should not disentitle the appellant to its claim. The CIT(E)'s order was set aside, and the case was remitted back for fresh adjudication.
Key Issues
Whether the selection of a wrong section code in the application for registration and approval can be considered a fatal defect disentitling the assessee from a rightful claim, and whether the CIT(E) should have provided an opportunity for correction.
Sections Cited
12AB, 80G(5), 12A, 12A(1)(ac)(iv), 12A(1)(ac)(iii), 12A(1)(ac)(vi)
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned two appeals at the instance of appellant are against the rejection of applications for regular registration u/s.12AB(1)(ac)(iv)-ITEM-(A) and approval u/s.80G(5) of the Act respectively framed by ld.CIT(E) dated 17.10.2024.
None appeared on behalf of the appellant despite due service of notice of hearing. A perusal of the record shows that the instant appeals are barred by limitation by 9 days. Application for condonation of delay has been filed by the appellant that trustee was not in town for signing Form No.36 and therefore the delay occurred in filing the instant appeals.
After hearing the ld. Departmental Representative and considering the reason giving rise to the delay and also placing reliance on the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 2 SCC 107) we find that due to ‘reasonable cause’ appellant failed to file the appeals within the time limit stipulated under the Act. We therefore condone the delay of 09 days in filing the appeals and admit the appeals for adjudication.
With the assistance of Ld. Departmental Representative, we have perused the record and notice that the appellant filed applications for registration u/s.12A(1)(ac)(iii)/80G(5)(iii) of the Act by filing Form 10AB on 19.04.2024 have been rejected because the assessee selected the wrong sub-section while filing the application. 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. It was required to file application in Form 10AB u/s.12A91)(ac)(vi)-Item (B) but filed against section 12A(1)(ac)(iv)-ITEM (A) of the Act. 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 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 the ld. CIT(E) ought to have given an opportunity to the appellant to rectify the defect. 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 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 required for reasonable cause. Effective grounds of appeal raised by the appellant are allowed for statistical purposes.
Since the issue of regular registration has been remitted back to the file of ld.CIT(E) for denovo adjudication, the issue of grant of approval u/s.80G(5) of the Act is also remitted back for necessary adjudication in accordance with law.
In the result, both the appeals of the appellant are allowed for statistical purposes.
Order pronounced on this 26th day of June, 2025.