SWARAJ FOUNDATION,VISAKHAPATANAM vs. INCOME TAX OFFICER (EXEMPTION WARD), VISAKHAPATNAM

Facts

Swaraj Foundation, a charitable trust, applied for permanent registration/approval under Section 12AB and Section 80G(5) of the Income Tax Act. The CIT(Exemptions) rejected these applications, citing a clerical error where the trust had inadvertently selected an incorrect sub-clause in its initial Form 10A applications for provisional registration, thus deeming the permanent registration applications as non-maintainable.

Held

The tribunal held that the CIT(Exemptions) erred in rejecting the applications solely on technical/procedural grounds without examining them on merits. It emphasized that curable procedural mistakes should not defeat the rights of charitable institutions and directed the CIT(Exemptions) to re-examine the applications for permanent registration/approval under Section 12AB and Section 80G afresh on merits, providing the assessee a reasonable opportunity of being heard.

Key Issues

Whether a clerical error in selecting an incorrect sub-clause during the provisional registration application (Form 10A) under the Income Tax Act can be a valid ground for rejecting the subsequent permanent registration application (Form 10AB) under Section 12AB and Section 80G(5).