BARODA YOUTH FEDERATION,VADODARA vs. THE CIT(EXEMPTION), AHMEDABAD

The assessee has taken the following grounds of appeal:

The learned CIT erred in fact and in law in passing the order rejecting the application for registration u/s. 12A of the Act without giving an opportunity of being heard.

The Appellant reserves the right to add, alter, amend, modify, delete all or any of the grounds of appeal either partially or completely.”

The assessee has filed application for condonation of delay along-with an Affidavit for delay of 117 days in filing of the present appeal. Going into the contents of the application for condonation of delay filed by the assessee / applicant and smallness of delay causing no perceptible prejudice to the Revenue, we are hereby condoning the delay and admitting the appeal of the assessee/ applicant for adjudication on merits.

The brief facts of the case are that the assessee/applicant filed an application for registration under section 12A(1)(ac) of the Income Tax Act, 1961 (Act). Subsequently, CIT (Exemptions) issued a detailed questionnaire to the assessee / applicant on 02.07.2024 requesting submission of documents and information. Upon examination of the records, CIT (Exemptions) observed that the applicant had earlier filed a similar application under section 12A(1)(ac)(iii) in Form No. 10AB on 15.04.2023, which was already disposed of by way of a rejection order passed in Form No. 10AD bearing DIN: ITBA /EXM/F/EXM45/2023-24/1056884893(1) dated 09.10.2023. CIT (Exemptions) held that since the provisional registration granted earlier was cancelled and the present application is not covered by the exceptions provided under para 4.1 of CBDT Circular No. 07 of 2024 dated 25.04.2024, the present application is not maintainable. Accordingly, without entering into the merits of the case, CIT (Exemptions) held that the application dated 07.03.2024 was liable to be rejected as non-maintainable.

The assessee is in appeal before us against the order passed by CIT (Exemptions) dismissing the application of the assessee. The ld. counsel for the assessee submitted that the assessee is a Section 8 Company incorporated under the Companies Act, 2013 and had filed an application for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 in Form 10AB on 07.03.2024 seeking recognition as a charitable trust. Pursuant to the said application, the Commissioner of Income Tax (Exemptions), Ahmedabad issued a notice under section 12A(1)(ac) seeking details relating to the trust, its objectives, and the activities undertaken. In response, the assessee duly submitted the requisite information along with supporting documents on 17.07.2024. However, it has been contended that the CIT (Exemptions), without examining the merits of the case, proceeded to reject the application vide order dated 19.09.2024 solely on the ground that a prior application had already been rejected, and therefore the present application was treated as non-maintainable. The ld. counsel for the assessee submitted that earlier a similar application had been filed by the assessee/applicant under clause (ii) inadvertently. The earlier application filed by the applicant was rejected on account of filing of application by the assessee / applicant under an incorrect clause. Accordingly, taking into account the extension of the deadline to 30.06.2024 by CBDT Circular No. 07/2024 dated 25.04.2024, the assessee / applicant filed another application, however, due to system error, the same was again filed in sub-clause (ii) instead of sub-clause (iii). Therefore, the assessee’ case is that due to a technical error on the portal, the application was again mistakenly submitted under clause (ii) instead of clause (iii). The ld. counsel for the assessee argued that such rejection merely on the basis of an earlier rejection, without any opportunity of hearing or issuance of a show cause notice, is arbitrary and against principles of natural

In response, Ld. DR placed reliance on the observations made by CIT (Exemptions) in his order.

We have heard the rival contentions and perused the material on record. We observe that in the case of Modasa Ekda Visha Khadayata Kovadia Kelavani Mandal vs. Commissioner of Income-tax (Exemption) [2025] 176 taxmann.com 569 (Ahmedabad - Trib.)[16-07-2025], ITAT held that where assessee-trust inadvertently selected wrong clause in Form 10AB while applying for regular registration under section 80G, and Commissioner (Exemption) rejected application on ground that he lacked power to rectify error, matter was to be remanded with direction to treat application under correct clause and decide afresh if assessee was otherwise eligible. Again in the case of Modasa Ekda Visha Khadayata Modipunch Kelavani Mandal vs. Commissioner of Income-tax (Exemption) [2025] 177 taxmann.com 545 (Ahmedabad - Trib.)[14-08-2025], the ITAT held that where assessee trust inadvertently selected wrong section code while filing application for approval under section 80G(5) in Form 10AB, matter was to be remitted to Commissioner with a direction to consider application of assessee as filed under correct clause (iii) to second proviso to section 80G(5) and thereafter grant approval accordingly, if assessee was otherwise found eligible. In the case of Youth Service Centre,

In view of the facts of the case, the submissions made by the assessee, and the judicial precedents cited, including the decisions of the coordinate benches of the ITAT in Youth Service Centre vs. CIT(E), V-One Society vs. Khadayata Kovadia Kelavani Mandal vs. CIT(E) [(2025) 176 taxmann.com 569] [(2025) 177 taxmann.com 545], we are of the considered view that the rejection of the assessee’s application under section 12A(1)(ac) merely on the ground of incorrect selection of clause in Form 10AB, especially in light of the technical difficulties and absence of opportunity of being heard, constitutes a violation of the principles of natural justice.

Accordingly, we set aside the impugned order passed by the CIT (Exemptions) and restore the matter to his file with a direction to treat the assessee’s application as one filed under correct clause. The CIT (Exemptions) is further directed to consider the application afresh on merits and pass a ITA Nos. 632 & 633/Ahd/2025 Asst. Years –N.A. - 6–

In the result, the appeal of the assessee is allowed for statistical purposes.

The assessee has raised the following grounds of appeal:

The Appellant reserves the right to add, alter, amend, modify, delete all or any of the grounds of appeal either partially or completely.”

The assessee has filed application for condonation of delay along-with an Affidavit for delay of 117 days in filing of the present appeal. Going into the contents of the application for condonation of delay filed by the assessee / applicant and smallness of delay causing no perceptible prejudice to the Revenue, we are hereby condoning the delay and admitting the appeal of the assessee/ applicant for adjudication on merits.

The brief facts of the case are that the assessee/applicant filed application in Form No. 10AB electronically seeking approval under clause (iii) of the first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961. However, upon perusal of the records, CIT (Exemptions) observed that the applicant’s earlier application for registration under section 12A(1)(ac)(iii) of the Act, also ITA Nos. 632 & 633/Ahd/2025 Asst. Years –N.A. - 7–

In light of the above facts and circumstances, and considering that the issue of grant of registration under section 12A of the Act has already been restored to the file of the CIT (Exemptions) for de-novo consideration, we are of the considered view that the present matter pertaining to the application for approval under section 80G of the Act also deserves to be remanded back for fresh adjudication. Since a valid registration under section 12A/12AB is a statutory pre-condition for granting approval under section 80G, and the outcome of the pending proceedings for registration under section 12A would have a direct bearing on the eligibility for such approval, we deem it appropriate to set aside the impugned order passed by the CIT (Exemptions) and restore the matter to his file for de-novo consideration, in accordance with law. The CIT (Exemptions) shall decide the assessee’s application under section 80G afresh

In the result, the appeal of the assessee is allowed for statistical purposes.

In the combined result, both the appeals of the assessee are allowed for statistical purposes. This Order is pronounced in the Open Court on 15/09/2025 (NARENDRA P. SINHA) JUDICIAL MEMBER Ahmedabad; Dated 15/09/2025