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Facts
The assessee, a charitable trust, obtained registration under Section 12A(1)(ac)(i) but mistakenly filed a subsequent application under Section 12A(1)(ac)(iii). The CIT(E) rejected this application and cancelled the existing registration, citing defects in the trust deed (missing mandatory clauses, investment in co-operative societies) and the incorrect application type.
Held
The Tribunal found that the assessee made a technical mistake in applying under the wrong sub-section of Section 12A. Consequently, the Tribunal set aside the order of the CIT(E) and remanded the matter back for fresh adjudication in accordance with the law.
Key Issues
Whether the CIT(E) was justified in rejecting the assessee's application for registration under Section 12A and cancelling the existing registration due to a technical error in the application form and alleged defects in the trust deed.
Sections Cited
12A, 12A(1)(ac)(i), 12A(1)(ac)(iii), 11(4A), 80G(5)(i)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Sonjoy Sarma
Assessment Years: 2025-26 Ammakillikudu CIT(Exemption), Kochi v. Door 345, Ward 20, Opposite BSNL office, Pipeline Road Aluva, Kochi – 683101. PAN : AAITA3263H. (Appellant) (Respondent) Appellant by : Shri Shinu J Pillai, Adv Respondent by : Shri Suresh Sivanandan IRS, CIT-DR Date of Hearing : 04.06.2025 Date of Pronouncement : 10.06.2025 O R D E R Per Sonjoy Sarma: The present appeal has been preferred by the assessee against an order dated 29.08.2024 of the CIT(Exemption), Kochi [hereinafter referred to as ‘CIT(E)’] denying the assessee’s registration u/s 12A of the Act.
Brief facts of the case are that the assessee is a charitable trust. Form no.10AC was issued on 01.10.2021 granting registration u/s 12A(1)(ac)(i) of the Act from A.Y 2022-23 to A.Y 2026-27. The assessee mistakenly filed application u/s 12A(1)(ac)(iii) of the Act.
“The assessee filed form No.10AB seeking registration u/s. 12A of the Act on 21/2/2024. In response to the hearing notice, Sri. Dijo Philip Mathew, FCA appeared on authorization and filed details. The case is discussed with him. Following discrepancies are noted.
The trust deed is not having the following mandatory clauses: i. It will not function in the nature of conducting any business activity and not for the purpose of profits. ii. In case the Trust/Society Institution/Organization intend to run any business, then it will satisfy the conditions stipulated in Section 11(4A) and proviso to Section 80G(5)(1) of the Income tax Act, 1961.
1. The trust deed allows investment in co-operative societies, which is not proper.
2. The applicant has obtained regular registration in Form 10AC under sub clause (i) of clause (ac) of section 12A(1) whereas the applicant is not 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)]. Therefore the registration u/s.12A obtained in form No.10AC and present application in Form No.10AB are erroneous and defective. Based on the above defects, the applicant was request to show cause as to why the application in Form 10AB filed under sub clause (iii) of clause (ac) of section 12A(1) should not be rejected and the registration u/s.12A obtained in form No.10AC should not be cancelled, on or before 5/8/2024. However, no reply has been filed by the assessee till date. As such application in form No.10AB is rejected. Further, based on the defect pointed out in item no.3 above, the registration u/s.12A of the Act obtained in form No.10AC is also cancelled.”
Ammakillikudu 4. After hearing both the parties and going through the records, we find that the assessee has made a technical mistake in applying u/s 12A(1)(ac)(iii) of the Act, hence, we set aside the order of the ld. CIT(E) and remand the matter back to the file of the ld. CIT(E) for fresh adjudication in accordance with law.
In terms of the above, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 10.06.2025.