NIRAVADYA FOUNDATION,VADODARA vs. THE COMMISSIONER OF INCOME TAX,(EXEMPTION), AHMEDABAD

The grounds raised

by the assessee read as under: “1. The learned Commissioner of Income Tax (Exemptions), Ahmedabad ("the CFT") erred in fact and in law in rejecting the application for registration of the trust u/s. 12(l)(ac)(iii) of the Income Tax Act, 1961 ("the Act").

2. The learned CIT erred in fact and in law in rejecting the application of registration of the trust without giving a proper opportunity of being heard.”

The ld.counsel for the assessee pointed out that the Ld.CIT rejected the assessee’s application filed u/s 12A(1)(ac)(iii) of the Act finding it premature and hence non maintainable for the reason that the assessee was not provisionally registered u/s 12AB of the Act , which condition was necessary for seeking registration u/s 12A(1)(ac)(iii) of the Act. He drew our attention to the findings of the Ld.CIT(E) in this regard at para 7-8 of his order as under: “7. From the above it is evident that the applicant/assessee is not provisionally registered u/s 12AB of the Act and therefore it is held that the present application filed in Form No.10AB under section 12A(1)(ac)(iii) of the Act is premature and non maintainable and liable to be rejected as such, without going into the merits. 8. Looking to the above facts, the present application filed in Form No. 10AB for the registration u/s. 12AB of the IT. Act, 1961, is "rejected".

Ld.Counsel for the assessee contended that in the facts of the present case the assessee was not required to seek provisional registration in the first place and therefore not required to seek registration u/s12A(1)(ac)(iii) of the Act. He contended that the assessee had inadvertently filed its application under section 12A(1)(ac)(iii) when it should have been filed under clause (i) of section 12A(1)(ac) of the Act.

He drew our attention to the relevant provisions of law in this regard - 12A(1)(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,— (i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020)], within three months from the first day of April, 2021; (ii) where the trust or institution is registered under section 12AB 93[or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10] and the period of the said registration 93[or approval, as the case may be,] is due to expire, at least six months prior to expiry of the said period;

The ld.counsel for the assessee pointed out that in the case of the assessee, it was an old Trust, which already been granted registration under section 12AA of the Act; that accordingly, as per the provision of new scheme, it was required to seek fresh registration in terms of section 12A(1)(ac)(i) of the Act. However, in the instant case, the assessee has inadvertently filed application under section 12A(1)(ac)(iii) of the Act.

The ld.counsel for the assessee pointed out that the ld.CIT(E) was well aware of the fact that the assessee had applied for grant of registration under incorrect provision, since his order notes the fact that the assessee was earlier registered under section 12AA of the Act vide order dated 15.2.2024. He, therefore, contended that merely because the assessee had sought registration under an incorrect provision, the same could not be fatal for grant of registration, and he pleaded that the matter be restored back to the ld.CIT(E) to consider the application for grant of registration as per the correct position of law applicable.

In his case, he drew our attention to various decisions of the ITAT holding that mere mistake in making an application for grant of 5 registration under a wrong provision/section was not fatal to the grant of registration, and the ld.CIT had directed to treat the application of the assessee under correct section, and consider the case on merit. In this regard, he drew our attention to the following decisions of the ITAT: i) Late Tilokchand Kuche Shikshan Vs. CIT(E), Pune in order dated 13.11.2024;

Considering the above, since the application was inadvertently filed by the assessee under an incorrect provision, we direct the ld.CIT(E) to treat the application filed as per the applicable provision and in the light of the same, consider the case of the assesse on merits.

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