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Facts
The assessee, Satkarm Foundation, filed an application for registration under Section 12AB of the Income Tax Act. The CIT(E) rejected the application solely because the assessee selected the wrong sub-section in Form 10AB. The assessee admitted this was an inadvertent mistake.
Held
The Tribunal held that the mistake in selecting the sub-section was not fatal and should be considered in the appropriate clause, especially since all other details were provided. The CIT(E) was directed to grant the assessee an opportunity to rectify the application and decide the matter on merits.
Key Issues
Whether rejection of registration application solely on the ground of selecting a wrong sub-section, without considering the merits, is justified? Whether the assessee should be allowed to rectify a mistake in the application form?
Sections Cited
12AB, 12A(1), 12A(1)(ac)(vi), 12A(1)(ac)(iii), 12A(1)(ac)(iv)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee is directed against the order dated 28.01.2025 framed by ld.CIT (Exemption), Pune denying grant of registration u/s.12AB of the Act.
The sole grievance of the assessee in the instant appeal is that ld. CIT(E) erred in not granting registration u/s.12AB of the Act without verifying the submissions given by the assessee.
At the outset, ld. Counsel for the assessee submitted that ld. CIT(E) ought to have decided the matter on merit on the tests of confide objects, genuine activity etc., instead of the hyper technical aspect of section/sub-section opted during the filing of application vide Form 10AB for registration u/s.12AB of the Act.
A prayer was made for providing one more opportunity to make necessary amendment in the application so that issue can be adjudicated on merits of the case. Ld. Departmental Representative did not oppose the request.
We have heard the rival arguments made by both the sides and perused the record placed before us. We observe that the assessee filed application on Form 10AB u/s.12A(1)(ac)(vi)- ITEM(B) on 30.08.2024. Various details were called for to which assessee gave response and filed the documents. Thereafter, ld.CIT(E) rejected the assessee’s application solely on the ground of selecting the wrong sub-section. Before us, ld. Counsel for the assessee had admitted that there was an inadvertent mistake in selecting the correct sub-section while filing the application for registration u/s.12AB of the Act. Reliance placed on the decision of Coordinate Benches in the case of Late Tilokchand Kuche Shikshan Prasarak Mandal Aurangabad vs. CIT (Exemption) in order dated 13.11.2024 and also in the case of Shree Swaminarayan Gadi Trust Vadtal (SVD) vs. CIT(Exemption) in and 370/Srt/2024 order dated 13.05.2024 where similar issue has been dealt and find that the above case is identical on the facts of the instant case before us. We would like to reproduce the finding of the Coordinate Bench, Surat in the case of Shree Swaminarayan Gadi Trust Vadtal (SVD) (supra) and the same reads as under:
“5. We have considered the submissions of both the parties and perused the record carefully. There is no dispute that the assessee applied for registration under Section 12A/12AB of the Act under Form 10AB on 28.09.2023. The Id. CIT(E) while considering the application of assessee noted that the application filed by assessee is not maintainable and accordingly, a show cause notice dated 02/11/2023 was issued for seeking clarification. The assessee responded to the show cause notice of Id CIT(E) vide their reply dated 15.12.2023. The contents of show cause notice and the reply thereof is not recorded by Id CIT(E) in his order. We find that the assessee vide their reply dated 15/12/2023 prayed to consider the application in appropriate sub- clause of section 12A(1). The Id 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 assessee has already explained the facts and prayed for correction before the Id. CIT(E). In our view the mistake in filing entry was not fetal and could be considered in appropriate sub-clause or clause of section 12A(1). Otherwise, the assessee 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 assessee for correction in Form-10AB is accepted and the order of Id CIT(E) is set-aside. The registry official of Id 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 assessee to rectify or amend the relevant clause/ sub-clause of section 12A(1). Considering the fact that the application of assessee was not considered on merit, therefore, we deem it appropriate to direct the Id. CIT(E) to treat the application of assessee 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 Id CIT(E) shall grant opportunity of hearing to the assessee. The assessee is also directed to furnish complete details to prove its object and activity and make all compliances as desired by the Id. CIT(E). In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes only.
6. In the result, the appeal of assessee in is allowed for statistical purpose.”
From perusal of the above finding of the Coordinate Bench Surat and also considering the facts of the case, we direct the ld. CIT(E) for giving an opportunity to the assessee to rectify the application by way of mentioning the correct sub-section/section under which the application u/s.12AB was intended to be filed and rather than referring to hyper technicalities, should adjudicate the issues based on merit considering the details and submissions to be filed by the assessee after giving due opportunity of hearing to the assessee. Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 08th day of May, 2025.