Loading judgment…
Facts
The assessee, a trust, applied for registration under Section 80G of the IT Act. The CIT(Exemption) rejected the application based on a technical ground of mentioning an incorrect section code and non-compliance with a notice, without delving into the merits of the case.
Held
The Tribunal held that the rejection was based on a curable defect (typographical error in section code) and not on merits. Following precedent and a recent CBDT circular, the Tribunal set aside the CIT's order and remanded the matter for fresh consideration.
Key Issues
Whether rejection of an application for registration under Section 80G solely on technical grounds like incorrect section code, without considering merits, is sustainable. Whether the error is a curable defect.
Sections Cited
80G, 12A, 12AB
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 18.09.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration u/s 80G of the IT Act.
The appellant has raised the following grounds of appeal :-
1. The learned CIT (Exemption), Pune; erred in law and on facts in rejecting appellant's application for registration u/s 80G of ITA, 1961.
2. The learned CIT (Exemption), Pune; ought to have appreciated that appellant's activities are genuine and bonafide and as such, eligible for registration u/s 80G of ITA, 1961.
3. The learned CIT(E) erred on facts in rejecting application for registration u/s 80G on the analogy that, no any valid 12A registration is possessed by the Appellant. Appellant contends that Appellant, once becomes entitle to registration u/s 12, will also become entitled for registration u/s 80G.
Appellant contends that Appellant is keen to make all compliances and remain at better side of law.
Appellant craves leave to add, alter, clarify, explain, modify, delete any or all of the grounds of appeal
, and to seek any just and fair relief.”
3. Facts of the case, in brief, are, that the assessee is a trust filed its application for registration in Form No.10AB under sub-clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the IT Act on 23.03.2024. With a view to verify the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the IT Act, a notice was issued through ITBA portal on 18.05.2024 requesting the assessee to upload certain information/clarification on or before 03.06.2024. The assessee in response to above notice furnished desired information as mentioned in the notice. After verifying these details, Ld. CIT, Exemption, Pune found certain discrepancies and asked for their clarification on or before 09.09.2024. Ld. CIT, Exemption, Pune also observed that the application for approval u/s 80G(5) was filed under sub-clause (B) of clause (iv) which is not applicable to the assessee. Since the assessee did not comply to this notice and has not furnished any explanation in reply to the above notice, Ld. CIT, Exemption, Pune was of the opinion that the condition (i) of section 80G(5) of the IT Act is not fulfilled. It was also observed that the assessee is not registered u/s 12AB of the IT Act & accordingly the application filed by the assessee was rejected. It is this order against which the assessee is in appeal before this Tribunal.
4. Ld. AR appearing from the side of the assessee trust submitted before us that the application for registration u/s 80G(5) was rejected merely on a technical ground of mentioning wrong section code and nothing adverse was found by Ld. CIT, Exemption, Pune against the assessee on merits of the case. It was submitted by Ld. Counsel of the assessee that the mistake was a typographical error and inadvertently wrong code was mentioned in the application and there was no deliberate/wilful intention to submit the application under wrong code before Ld. CIT, Exemption, Pune. It was submitted by Ld. Counsel of the assessee that under similar circumstances & identical facts the Tribunal has already allowed appeals of other assessee. In this regard, Ld. AR relied on the order passed by Co-ordinate Bench of this Tribunal in the case of Nitdaa Foundation vs. CIT, 167 taxmann.com 111 (Kolkata – Trib.) wherein under identical situation the Co-ordinate Bench of this Tribunal allowed the appeal of the assessee and directed Ld. CIT, Exemption, Pune to consider the application as filed under desired section of the IT Act and consequently directed to consider the same for grant of approval u/s 80G(5) to the assessee trust in accordance with law. It was also submitted by the counsel of the assessee that in a recent Circular No.7/2024 issued by CBDT on 25.04.2024 in para 4.1 it has been provided that if the application was furnished under the wrong section code than it may furnish a fresh application in Form No.10AB within the extended time provided in the circular. Accordingly, Ld. AR requested before the Bench to set-aside the order passed by Ld. CIT, Exemption, Pune and further requested to direct him to treat the original application as filed under clause (iii) of first proviso to sub-section (5) of section 80G of the IT Act.
5. Ld. DR appearing from the side of the Revenue supported the orders passed by Ld. CIT, Exemption, Pune & requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record. We find that due to a typographical and inadvertent error occurred in the application for registration u/s 80G(5) of the IT Act & for not responding to the last notice of hearing the application for approval was rejected by observing as under :- “9. Considering the above facts discussed in the show cause notice and discrepancies notices as per financial statements and ITRs furnished by the assessee, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec.80G(5)(iv)(B) of the Act are not applicable in the assessee’s case. And thus, the undersigned is not satisfied about the fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act and has left no alternative but to reject the application.
In view of the above, the application under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 filed by the assessee is hereby rejected.”
From a perusal of above order, we find that the application filed by the assessee was rejected on account of a typographical error of wrong mentioning of particular code and no other adverse findings has been given on merit by Ld. CIT, Exemption, Pune. Ld. Counsel relied on the order passed by the Co-ordinate Bench of this Tribunal in the case of Nitdaa Foundation (supra) wherein under identical situation the appeal of the assessee was allowed by observing as under :- “12. Thus, the whole controversy arose due to incorrect mention of the clause under which the application was required to be filed, which was mentioned as clause (iv) of the first proviso to sub-section (5) of section 80G in column 6 of Form No. 10AC whereas the same should have been mentioned as clause (i) of the first proviso to sub-section (5) of section 80G and the Ld. AR also admitted this fact in the course of the hearing. Since, Form No. 10AC was filed in time, the error on the part of the assessee for mentioning the wrong clause is deemed to be a curable defect and the application on Form No. 10AC is deemed to be filed under clause (i) of the first proviso to sub-section (5) of section 80G. The order of the Ld. CIT(Exemption) is hereby set aside and he is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) of the Act and consider the same for grant of approval under section 80G(5) to the trust in accordance with law within a period of 2 months from the date of receipt of this order. The assessee shall file all necessary evidence before him.”
Respectfully following the above decision and in the light of the circular no 7/2024 issued by CBDT on 25-04-2024, i.e. after the filing of application by the assessee wherein the issue of mentioning wrong section code has been addressed / considered as a common & frequent error and also observing the fact that in the instant case Ld. CIT, Exemption, Pune has not given any adverse finding on merits of the case, against the assessee, and in the light of the fact stated by the counsel of the assessee that the trust is also registered u/s 12AB of the IT Act, we deem it fit to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to treat the application of the assessee as filed under clause (iii) of first proviso to sub-section (5) of section 80G (or under the desired section code) and consider the same for grant of approval u/s 80G(5) of the IT Act in accordance with law after