MODASA EKDA VISHA KHADAYATA KOVADIA KELAVANI MANDAL,MODASA vs. THE CIT(EXEMPTION), AHMEDABAD

Brief facts of the case are that the assessee is a Trust constituted on 01-04-2002 and registered u/s.12A of the Act since then. Under the new provisions of registration, the assessee Trust applied for regular registration under section 12A(1)(ac)(i) of the Act and the same was Modasa Ekda Visha Khadayata Kovadia Kelvani Mandal vs. CIT(E) Asst.Year –N.A - 2– granted by Ld. CIT[E] on 02-10-2021 for the period commencing from Asst. Years 2022-23 to 2026-27. 2.1. The assessee Trust did not have approval u/s.80 G[5] of the Act. It had applied for approval u/s.80 G[5][iv] of the Act in Form 10-A and got provisional registration in Form 10AC for the period from 30-11-2022 to Asst. Year 2025-26. However for regular registration, assessee trust filed application in Form 10AB on 26-09-2024 under clause [ii] of the second proviso to section 80G[5] instead of clause [iii] of that section. The Ld CIT[E] issued a Show Cause Notice dated 25-03-2025 to explain the reason. In reply the assessee trust explained that it is mistake happened inadvertently and through oversight, however it is a curable defect and relied on Kolkata Tribunal decision in the case of Nitdaa Foundation -Vs- CIT [E] reported in [2024] 167 taxmann.com 111. But Ld CIT [E] held that he has no power and facility under the Act to amend the section code wrongly selected by the assessee in Form 10AB and thereby rejected the application for regular registration u/s. 80G[5] of the Act.

Aggrieved against the order of rejection, Assessee Trust is in appeal before us raising the following Grounds of Appeal: On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Exemption) ("Ld. CIT(E)") has erred in rejecting the application filed by the Appellant Trust on the ground that the application filed in Form No. 10AB was filed under clause (n) of the first proviso to section 80G(5) of the Income-tax Act, 1961 (the "Act") and the Appellant Trust does not has a valid approval under clause (ii) of first proviso to section 80G(5) of the Act inasmuch as Modasa Ekda Visha Khadayata Kovadia Kelvani Mandal vs. CIT(E) Asst.Year –N.A - 3– a. The Appellant Trust had filed an application in Form No. 10AB under clause (ii) instead of clause (iii) of the first proviso to section 80G(5) through oversight, and such error is a curable error. b. The Appellant Trust has made an application in time.

We have heard the parties and perused the materials placed on record and Paper Book filed by the assessee. Before we proceed to examine the facts in assessee's case, it is necessary to first look at the relevant provisions of the second proviso to sub-section (5) of section 80G which read as under – Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,

(i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the 1st day of April, 2021;

Following the above decisions, we are of the considered view that there is merit in the claim of the ld. AR that the assessee had selected the wrong section code inadvertently while filing the application for approval in Form 10AB. In view of these discussions and respectfully following the decision of the Kolkata Bench, we remit the issue back to the file of ld. CIT(E), with a direction to consider the application of the assessee as under Clause (iii) to second proviso to section 80G(5) of the Act, and thereafter grant approval accordingly, if assessee is otherwise found eligible.

In the result, the appeal filed by the assessee is allowed for statistical purpose.