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Facts
The assessee trust, which had provisional registration under Section 80G(5), filed an application for final registration. The initial application was rejected due to a technical error in selecting the wrong clause. A subsequent corrected application was rejected as time-barred, and the provisional approval was cancelled.
Held
The Tribunal held that the rejection of the application and cancellation of provisional approval were not justified as the errors were technical and procedural, not on merits. The principle of substance over form was applied, and the matter was restored to the CIT(E).
Key Issues
Whether rejection of application for registration and cancellation of provisional approval on technical grounds without examining merits is justified, despite a curative application being filed within the extended timeline.
Sections Cited
80G(5), 10AB, 10AC, 119
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: MS. SUCHITRA R. KAMBLE & MAKARAND V.MAHADEOKAR
आदेश आदेश/O R D E R आदेश आदेश
PER MAKARAND V.MAHADEOKAR, AM:
This appeal by the assessee is directed against the order dated 29.06.2025 passed by the learned Commissioner of Income Tax (Exemptions), Ahmedabad [hereinafter referred to as “CIT(E)”], rejecting the application filed in Form No. 10AB for grant of final registration under Section 80G(5) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) and cancelling the provisional approval earlier granted in Form No. 10AC.
Facts of the Case 2.1 The assessee is a registered charitable trust engaged in activities of relief to the poor, education, and general public utility. The assessee was granted provisional registration under section 80G(5) vide Form No. 10AC dated 04.11.2021. The trust was required to apply for conversion of provisional approval to final registration in Form No. 10AB within the time prescribed under clause (ii) of the first proviso to section 80G(5). The CBDT, vide Circular No. 7/2024 dated 25.04.2024, extended the due date for filing such Form 10AB up to 30.06.2024, covering even those applications earlier rejected due to delay or wrong section selection.
2.2 The assessee filed its application in Form No. 10AB on 12.04.2024, well within the extended due date, but due to inadvertence, the section selected online was clause (ii) instead of clause (iii) of the first proviso to section 80G(5). The CIT(E) rejected the said application on technical ground holding that the form was filed under the wrong clause and therefore not maintainable. No examination on the merits of the activities was undertaken. Subsequently, to cure the said procedural defect, the assessee filed another application in Form No. 10AB on 17.12.2024 under the correct clause (iii). The learned CIT(E), however, rejected this application as time- barred, holding that the benefit of CBDT Circular No. 7/2024 could not be extended to a fresh application filed after 30.06.2024. Consequently, the provisional approval in Form 10AC dated 04.11.2021 was also cancelled.
2.3 Aggrieved by the said action, the assessee has preferred the present appeal before us raising following grounds:
GROUND NO.1 - Unjustified rejection of application under Form 10AB and cancellation of Provisional Registration issued in Form 10AC: - That the learned Commissioner of Income Tax (Exemptions) erred in law and on facts in rejecting the application filed in Form 10AB for grant of registration under clause (ii) of the first proviso to Section 80G(5) of the Income-tax Act, 1961 and also cancelled the provisional registration u/s 80G(5) issued in Form 10AC, without appreciating that the appellant trust was duly eligible for such registration. - That the unintentional or bona fide mistake was made in filing the form with wrong selection of section in online submission of the Form No. 10AB, dated 12-04-2024. The appellant trust had already acted in good faith by filing its application originally [on 12-04-2024] within the extended deadline of 30-06-2024, as notified vide CBDT Circular No. 7/2024, albeit under the wrong clause. The learned CIT(e) rejected the application only on this ground that the application is not in made under proper section. - The appellant filed a fresh / corrected application on 17-12-2024, the CIT(E) did not grant the exemption stating that it not within the time limit. The learned CIT(E) ought to have consider this application in continuation with original application dated 17-12-2024. - The law does not provide a specific bar on refiling a corrected application [on 17-12-2024] where the initial application was rejected solely on technical grounds; - The appellant had no intent to bypass or delay compliance and made timely efforts to comply. - That the rejection of the application deprives the appellant of its statutory right to claim approval under Section 80G(5) solely on procedural grounds, which is against the settled principles of equity, natural justice, and substance over form. - That the appellant craves leave to add, alter, amend or withdraw any of the above grounds at the time of hearing. Prayer: In view of the above and such other grounds as may be urged at the time of hearing, the appellant humbly prays that the Hon'ble Tribunal may be pleased to: - set aside the impugned order passed by the Learned CIT(E), Ahmedabad; and - direct the grant of registration under Section 80G(5) of the Income-tax Act, 1961.
The learned Authorised Representative (AR) reiterated the facts as stated under the facts of the case and contended that both rejections were purely technical, without examining the genuineness of activities. Reliance was placed on CBDT Circular No. 7/2024, which clarified that such cases of rejection on “delay or wrong section” are to be covered under the extended time limit. The AR, therefore, prayed that the impugned order be set aside and the CIT(E) be directed to consider the application on merits after treating it as filed within time and restoring the provisional registration.
The learned Departmental Representative (DR) supported the order of the CIT(E). However, the DR did not seriously object to the alternative plea of the assessee for restoration of the matter to the file of the CIT(E) for fresh consideration on merits, in accordance with law, and subject to verification of factual compliance.
We have carefully considered the rival submissions, perused the orders of the authorities below, and examined the record.
5.1 The undisputed facts are that the assessee was granted provisional approval under section 80G(5) in Form No. 10AC dated 04.11.2021. Pursuant thereto, it filed its first application in Form No. 10AB on 12.04.2024, well within the extended date provided by CBDT Circular No. 7/2024 (30.06.2024). The said Circular, issued under section 119, specifically clarified that its relief would also cover cases where applications were earlier rejected “due to delay or wrong section”.
5.2 The only reason for rejection of the first Form 10AB was wrong selection of clause (ii) instead of clause (iii)**. The assessee promptly rectified the error by filing a corrected application on 17.12.2024. The CIT(E) rejected it as belated and also cancelled the provisional approval. The rejection was, therefore, not on merits but purely technical.
5.3 In our considered opinion, such technical error in electronic form selection cannot be allowed to defeat a substantive right conferred by statute. The Hon’ble Supreme Court and various High Courts have consistently held that procedural lapses should not override substantial justice.
5.4 The present case stands on identical footing. The assessee’s second application was only to cure a procedural defect of the first, which was filed within time. Once the first application was timely, the second application, being a corrective compliance, must relate back to the original filing and be treated as filed within the prescribed period.
5.5 The CIT(E) has not doubted the genuineness of the trust’s activities nor examined its objects. Therefore, the rejection of the application and the consequential cancellation of Form 10AC approval, without any finding on merits, cannot be sustained in law.
5.6 In view of the foregoing discussion, and applying the principle of substance over form, we hold that the learned CIT(E), was not justified in rejecting the assessee’s Form 10AB application and cancelling the provisional approval.
5.7 Accordingly, the impugned order is set aside, and the matter is restored to the file of the learned CIT(E) with the following specific directions: i. The learned CIT(E) shall treat the assessee’s application dated 17.12.2024 as a curative and continuous application in continuation of the original Form 10AB filed on 12.04.2024, which was filed within the extended due date prescribed under CBDT Circular No. 7/2024. ii. The learned CIT(E) shall decide the application afresh on merits, after verifying the objects and genuineness of the activities of the trust, and by granting a reasonable opportunity of being heard to the assessee. iii. The provisional approval granted in Form No. 10AC dated 04.11.2021 shall remain valid and operative till the passing of fresh order by the CIT(E).
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the Court on 15th October, 2025 at Ahmedabad.