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Facts
The assessee trust filed an application for regular registration under Section 12AB and approval under Section 80G. The application was rejected by the Ld. CIT(E) because the assessee selected clause (ii) instead of clause (iii) in Form No. 10AB, citing it as an incorrect provision. The assessee contended that this was due to a technical limitation on the Income-tax portal, as the correct option was not available.
Held
The Tribunal held that the rejection of the application without examining the assessee's claim of a technical glitch was unjustified and in violation of natural justice. Procedural prescriptions should advance justice rather than frustrate it, and bona fide errors due to technical constraints should not lead to outright rejection.
Key Issues
Whether the rejection of the assessee's application for registration and approval due to selecting an incorrect clause in the form, allegedly due to a technical glitch in the portal, was justified.
Sections Cited
Section 12AB, Section 80G, Section 12A(1)(ac)(ii), Section 12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
ORDER PER OM PRAKASH KANT, AM
These two appeals preferred by the assessee arise from two separate orders, both dated 12.09.2025, passed by Ld. Commissioner of Income-tax (Exemptions), Mumbai [in short ‘the Ld. CIT(E)’], whereby the applications of the assessee-trust seeking regular registration under Section 12AB and approval under Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025 Section 80G of the Income Section 80G of the Income-tax Act, 1961 (“the Act”) came to be tax Act, 1961 (“the Act”) came to be rejected.
We shall first address the appeal relating to the rejection of We shall first address the appeal relating to the rejection of We shall first address the appeal relating to the rejection of registration under Section 12AB of the Act. registration under Section 12AB of the Act.
2.1 The material facts, b The material facts, briefly stated, are that the assessee filed an riefly stated, are that the assessee filed an application in prescribed Form No. 10AB on 29.03.2025. The ld application in prescribed Form No. 10AB on 29.03.2025. The application in prescribed Form No. 10AB on 29.03.2025. The Commissioner of Income Commissioner of Income-tax (Exemptions) observed that the tax (Exemptions) observed that the application was incomplete and not accompanied by all requisite application was incomplete and not accompanied by all requisite application was incomplete and not accompanied by all requisite documents. It was further documents. It was further noticed that the assessee had selected noticed that the assessee had selected Section 12A(1)(ac)(ii) in Form No. 10AB. Section 12A(1)(ac)(ii) in Form No. 10AB.
2.2 According to the Commissioner, clause (ii) of Section According to the Commissioner, clause (ii) of Section According to the Commissioner, clause (ii) of Section 12A(1)(ac) applies to trusts or institutions already holding regular 12A(1)(ac) applies to trusts or institutions already holding regular 12A(1)(ac) applies to trusts or institutions already holding regular registration and seeking renewal thereof upon expiry of the registration and seeking renewal thereof upon exp registration and seeking renewal thereof upon exp stipulated period. In the present case, the assessee had been stipulated period. In the present case, the assessee had been stipulated period. In the present case, the assessee had been granted only provisional registration for a limited period of three granted only provisional registration for a limited period of three granted only provisional registration for a limited period of three years. Consequently, the Commissioner held that the assessee was years. Consequently, the Commissioner held that the assessee was years. Consequently, the Commissioner held that the assessee was required to file its application under Section 12A required to file its application under Section 12A(1)(ac)(iii), which (1)(ac)(iii), which specifically governs cases of conversion of provisional registration specifically governs cases of conversion of provisional registration specifically governs cases of conversion of provisional registration into regular registration and into regular registration and the assessee did not qualify qualify to make application u/s 12A(1)(ac)(ii) of the Act. application u/s 12A(1)(ac)(ii) of the Act.
The Ld. CIT(E) noted that the application was filed under the 2.3 The Ld. CIT(E) noted that the application was filed The Ld. CIT(E) noted that the application was filed wrong section, accordingly, he provided an opportunity of being wrong section, accordingly, he provided an opportunity of being wrong section, accordingly, he provided an opportunity of being
Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025 heard to the assessee before rejecting the application of the heard to the assessee before rejecting the application heard to the assessee before rejecting the application assessee on this ground assessee on this ground.
2.4 In response, the assessee vide letter dated 25.08.2025 In response, the assessee vide letter dated 25.08.2025 In response, the assessee vide letter dated 25.08.2025 submitted that, at the time of filin submitted that, at the time of filing the application, the appropriate g the application, the appropriate statutory clauses were not reflected in the dropdown menu on the statutory clauses were not reflected in the dropdown menu on the statutory clauses were not reflected in the dropdown menu on the Income-tax Department’s portal. It was contended that the assessee tax Department’s portal. It was contended that the assessee tax Department’s portal. It was contended that the assessee had no effective choice but to select the available option, namely had no effective choice but to select the available option, namely had no effective choice but to select the available option, namely clause (ii), in order to comply with the limitation period prescribed to comply with the limitation period prescribed to comply with the limitation period prescribed under the Act.
2.5 The Commissioner, however, rejected the explanation, holding The Commissioner, however, rejected the explanation, holding The Commissioner, however, rejected the explanation, holding that (i) the application had been filed under an incorrect provision; that (i) the application had been filed under an incorrect provision; that (i) the application had been filed under an incorrect provision; and (ii) there exists no enabling provision permitting modification or and (ii) there exists no enabling provision permitting mod and (ii) there exists no enabling provision permitting mod amendment of the selected clause in Form No. 10AB. The amendment of the selected clause in Form No. 10AB. The amendment of the selected clause in Form No. 10AB. The application was accordingly rejected as non application was accordingly rejected as non-maintainable, with maintainable, with liberty to pursue alternative remedies. liberty to pursue alternative remedies.
Before us, learned counsel for the assessee invited attention to Before us, learned counsel for the assessee invited attention to Before us, learned counsel for the assessee invited attention to the documentary material placed in the paper book at page 40, aterial placed in the paper book at page 40, aterial placed in the paper book at page 40, including a snapshot of the Income including a snapshot of the Income-tax portal interface. The Ld. tax portal interface. The Ld. counsel also drawn out attention to the letter of the assessee filed counsel also drawn out attention to the letter of the assessee filed counsel also drawn out attention to the letter of the assessee filed before the Ld. CIT(E) wherein i before the Ld. CIT(E) wherein it was urged that while preparing the t was urged that while preparing the application in February 2025, the correct statutory options were not on in February 2025, the correct statutory options were not on in February 2025, the correct statutory options were not available in the dropdown menu. The assessee claimed to have available in the dropdown menu. The assessee claimed to have available in the dropdown menu. The assessee claimed to have deferred filing initially, assuming the issue to be technical. deferred filing initially, assuming the issue to be technical. deferred filing initially, assuming the issue to be technical.
Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025 Subsequent attempts, including contact with the departmental Subsequent attempts, including contact with the departmental Subsequent attempts, including contact with the departmental helpline, allegedly yielded no resolution. llegedly yielded no resolution.
3.1 It was submitted that as the end of the financial quarter It was submitted that as the end of the financial quarter It was submitted that as the end of the financial quarter approached, and with the statutory limitation expiring on approached, and with the statutory limitation expiring on approached, and with the statutory limitation expiring on 31.03.2025, the assessee proceeded to file the application on 31.03.2025, the assessee proceeded to file the application on 31.03.2025, the assessee proceeded to file the application on 29.03.2025 under the available clause, 29.03.2025 under the available clause, albeit conscious that clause conscious that clause (ii) was not the technically correct provision. The filing, therefore, (ii) was not the technically correct provision. The filing, therefore, (ii) was not the technically correct provision. The filing, therefore, was argued to be bona fide and compelled by circumstances beyond was argued to be bona fide and compelled by circumstances beyond was argued to be bona fide and compelled by circumstances beyond the assessee’s control. the assessee’s control.
3.2 The Ld. counsel referred to the decision of the Co The Ld. counsel referred to the decision of the Co The Ld. counsel referred to the decision of the Co-ordinate ch of the Tribunal in the case of Shree Swaminarayan Gadi Shree Swaminarayan Gadi Bench of the Tribunal in the case of Trust v. CIT(E) in & 370/Srt/2024 and submitted Trust v. CIT(E) in & 370/Srt/2024 Trust v. CIT(E) in ITA No. 369 & 370/Srt/2024 that in identical technical problem of clerical error in selecting that in identical technical problem of clerical error in selecting that in identical technical problem of clerical error in selecting appropriate head and dropdown menu, t opriate head and dropdown menu, the Tribunal he Tribunal directed the Ld. CIT(E) to treat the application of the assessee u/s 12A(1)(ac)(iii) of the CIT(E) to treat the application of the assessee u/s 12A(1)(ac)(iii) of the CIT(E) to treat the application of the assessee u/s 12A(1)(ac)(iii) of the Act in place of section 12(1)(ac(ii) of the Act Act in place of section 12(1)(ac(ii) of the Act for consider considering the same on merit and pass order in accordance with law on merit and pass order in accordance with law. The Ld. counsel . The Ld. counsel also referred to the decisi also referred to the decision of the Co-ordinate Bench in the case of ordinate Bench in the case of Deodhar Education and Vocational Academy in ITA No. Deodhar Education and Vocational Academy in ITA No. Deodhar Education and Vocational Academy in ITA No. 2318/Pun/2024 wherein also wherein also due to similar inadvertent error the due to similar inadvertent error the application was filed under clause (vi) of section 12A(1)(ac) of the Act, application was filed under clause (vi) of section 12A(1)(ac) of the Act application was filed under clause (vi) of section 12A(1)(ac) of the Act was restored back to th was restored back to the Ld. CIT(E), Pune for treating the application e Ld. CIT(E), Pune for treating the application under relevant clause and decide after providing reasonable under relevant clause and decide after providing reasonable under relevant clause and decide after providing reasonable opportunity of being heard opportunity of being heard. The Ld. counsel also relied on the . The Ld. counsel also relied on the Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust ITA No. 7890 & 7889/MUM/2025 ordinate Bench in the case of Jal Minocher decision of the Co-ordinate Bench in the case of ordinate Bench in the case of Mistry Memorial Foundat Mistry Memorial Foundation v. CIT(E) reported in (2025) 171 ion v. CIT(E) reported in (2025) 171 taxmann.com 726 (Mumbai taxmann.com 726 (Mumbai-Trib.) wherein also in similar wherein also in similar circumstances, matter was restored back to the Ld. CIT(E). circumstances, matter was restored back to the Ld. CIT(E). circumstances, matter was restored back to the Ld. CIT(E).
We have heard rival submissions of the parties an We have heard rival submissions of the parties an We have heard rival submissions of the parties and perused the relevant material the relevant material on record. It is not in dispute that the in dispute that the assessee had been granted provisional registration under Section assessee had been granted provisional registration under Section assessee had been granted provisional registration under Section 12AB. For regularisation of such provisional registration, the 12AB. For regularisation of such provisional registration, the 12AB. For regularisation of such provisional registration, the governing provision Section governing provision Section is 12A(1)(ac)(iii), which mandates the 12A(1)(ac)(iii), which mandates the filing of an application within the pres filing of an application within the prescribed period. cribed period. The relevant provision is reproduced as under: provision is reproduced as under:
“12A. 48 49 [(1)] 50The provisions of The provisions of section 11 and section 12 shall not apply in relation to the shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- income of any trust or institution unless the following conditions are fulfilled, namely: income of any trust or institution unless the following conditions are fulfilled, namely:
(a) …………………….. ……………………..
61 [(aa) ………………………… ………………………… 62 [(ab) …………………… 63 [(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt notwithstanding anything contained in clauses (a) to (ab), the person in receipt 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 of the income has made an application in the prescribed form and manner to 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 the Principal Commissioner or Commissioner, for registration of the trust or the Principal Commissioner or Commissioner, for registration of the trust or institution,- (i)……………….
Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025
(ii)……………………… (ii)………………………
(iii) where the trust or institution has been provisionally registered under where the trust or institution has been provisionally registered under where the trust or institution has been provisionally registered under section 12AB section 12AB64[or provisionally approved under sub [or provisionally approved under sub-clause (iv) or sub- clause (v) or sub clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of clause (via) of clause (23C) of section 10], at least six months prior to expiry of period of the provisional ], at least six months prior to expiry of period of the provisional ], at least six months prior to expiry of period of the provisional registration registration 64[or provisional approval, as the case may be,] or within [or provisional approval, as the case may be,] or within six months of commencement of its activities, whichever is earlier;” six months of commencement of its activities, whichever is earlier;” six months of commencement of its activities, whichever is earlier;”
4.1 Under the Income e Income-tax Rules, Form No. 10AB has been tax Rules, Form No. 10AB has been prescribed for filing application for regular registration under the prescribed for filing application for regular registration under the prescribed for filing application for regular registration under the section 12(1)(ac)(iii) of the Act. section 12(1)(ac)(iii) of the Act. The assessee claimed to have The assessee claimed to have made application for regularisation of registration for regularisation of registration within the limitation within the limitation provided. This fact has not been disputed by the ld CIT(E) also. This fact has not been disputed by the ld CIT(E) also. This fact has not been disputed by the ld CIT(E) also. Thus, it is not the case of the Revenue that the application was Thus, it is not the case of the Revenue that the application was Thus, it is not the case of the Revenue that the application was barred by limitation. The rejection rests substantially on the ground barred by limitation. The rejection rests substantially on the ground barred by limitation. The rejection rests substantially on the ground that the assessee selected clause (ii) instead of clause (iii). that the assessee selected clause (ii) instead of clause (iii) that the assessee selected clause (ii) instead of clause (iii)
4.2 The explanation offered by the assessee attributes the error to The explanation offered by the assessee attributes the error to The explanation offered by the assessee attributes the error to a technical limitation of the Income a technical limitation of the Income-tax portal, asserting that the tax portal, asserting that the appropriate statutory option was unavailable at the relevant time, appropriate statutory option was unavailable at the relevant time, appropriate statutory option was unavailable at the relevant time, therefore, it chose the available option in the dro chose the available option in the dropdown menu of pdown menu of choosing section 12(1)(ac)(ii) of the Act choosing section 12(1)(ac)(ii) of the Act, knowingly knowingly that it was a wrong section but to meet the limitation of filing application. wrong section but to meet the limitation of filing application. wrong section but to meet the limitation of filing application.
4.3 Though the ld CIT(A) recorded that application was not Though the ld CIT(A) recorded that application was not Though the ld CIT(A) recorded that application was not complete and supported by necessary documents , but he has complete and supported by necessary documents , but complete and supported by necessary documents , but rejected the application only for selection of wrong section, however, rejected the application only for selection of wrong section, however, rejected the application only for selection of wrong section, however,
Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025 while rejecting the application, he while rejecting the application, he did not consider above claim of did not consider above claim of the assessee of technical glitch in the website of income of technical glitch in the website of income of technical glitch in the website of income-tax department.
4.4 Apparently, there was here was no advertent error at the end of the advertent error at the end of the assessee in filing the application or selecting the wrong section. assessee in filing the application or selecting the wrong section. assessee in filing the application or selecting the wrong section. Though the ld CIT(A) permitted to seek alternative remedy under Though the ld CIT(A) permitted to seek alternative remedy under Though the ld CIT(A) permitted to seek alternative remedy under the Act. We note that below the section 12A(1) the Act. We note that below the section 12A(1)(ac) (ac) of the Act a proviso has been inserted has been inserted by way of the Finance (No.2) Act, 2024 by way of the Finance (No.2) Act, 2024 with effect from 1/10 10/24 which authorise the Commissioner of /24 which authorise the Commissioner of Income-tax Exemption tax Exemption to condone delay in filing application in case to condone delay in filing application in case of bonafide reasons or reasonable cause. of bonafide reasons or reasonable cause. But in the case , there is But in the case , there is no delay in filing the application. The observations of ld CIT(E) are he application. The observations of ld CIT(E) are he application. The observations of ld CIT(E) are that application was not complete and wrong section was chosen by that application was not complete and wrong section was chosen by that application was not complete and wrong section was chosen by the assessee while making application while making application .
4.5 In our opinion, In our opinion, the Ld. CIT(E) is not justified in rejecting the Ld. CIT(E) is not justified in rejecting the application of the assessee, application of the assessee, without examining the claim of the the claim of the assessee of technical glitch in the website of the income-tax assessee of technical glitch in the website of the income assessee of technical glitch in the website of the income department.
4.6 In matters concerning statutory benefits, particularly those In matters concerning statutory benefits, particularly those In matters concerning statutory benefits, particularly those relating to charitable registration, procedural prescriptions must be relating to charitable registration, procedural prescriptions must be relating to charitable registration, procedural prescriptions must be construed in a manner that advances the cause of justice rather n a manner that advances the cause of justice rather n a manner that advances the cause of justice rather than frustrates it. A bona fide error induced by systemic or than frustrates it. A bona fide error induced by systemic or than frustrates it. A bona fide error induced by systemic or technical constraints cannot, by itself, constitute a valid ground for technical constraints cannot, by itself, constitute a valid ground for technical constraints cannot, by itself, constitute a valid ground for Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025 outright rejection without factual verification. outright rejection without factual verification. The The Administrative authorities exercising quasi horities exercising quasi-judicial functions are obliged to judicial functions are obliged to consider explanations supported by material and render findings consider explanations supported by material and render findings consider explanations supported by material and render findings thereon. The absence of such examination renders the decision thereon. The absence of such examination renders the decision thereon. The absence of such examination renders the decision vulnerable. This action of ld CIT(E) is in clear violation of principl This action of ld CIT(E) is in clear violation of principles This action of ld CIT(E) is in clear violation of principl of natural justice.
4.7 Where an assessee asserts that non Where an assessee asserts that non-compliance or defect compliance or defect arises from technical impediments attributable to the system itself, arises from technical impediments attributable to the system itself, arises from technical impediments attributable to the system itself, the authority is duty the authority is duty-bound to verify the claim. Rejection without bound to verify the claim. Rejection without such verification results in denial such verification results in denial of substantive rights on purely of substantive rights on purely technical considerations. technical considerations. The approach of the Commissioner, in the The approach of the Commissioner, in the present case, reflects undue emphasis on form over substance. The present case, reflects undue emphasis on form over substance. The present case, reflects undue emphasis on form over substance. The statutory scheme of Section 12A read with Section 12AB is intended statutory scheme of Section 12A read with Section 12AB is intended statutory scheme of Section 12A read with Section 12AB is intended to regulate eligibility, to regulate eligibility, not to penalise inadvertent procedural lapses not to penalise inadvertent procedural lapses devoid of mala fides.
4.8 In view of the foregoing, we are of the considered opinion that In view of the foregoing, we are of the considered opinion that In view of the foregoing, we are of the considered opinion that the rejection of the application without examining the assessee’s the rejection of the application without examining the assessee’s the rejection of the application without examining the assessee’s explanation of technical glitch cannot be sustained. explanation of technical glitch cannot be sustained.
4.9 Therefore, we set aside the order of the Ld. CIT(E) and restore Therefore, we set aside the order of the Ld. CIT(E) and restore Therefore, we set aside the order of the Ld. CIT(E) and restore the matter back to him for verification of the claim of the assessee the matter back to him for verification of the claim of the assessee the matter back to him for verification of the claim of the assessee and if the claim is found to be correct and if the claim is found to be correct, then the Ld. CIT(E) is then the Ld. CIT(E) is directed to consider the application of the assessee fo d to consider the application of the assessee fo d to consider the application of the assessee for registration in accordance with law and accordance with law and ratio of the decisions of the co ratio of the decisions of the co-ordinate
Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025 Bench of the Tribunal in the cases cited before us Bench of the Tribunal in the cases cited before us. Accordingly, the Accordingly, the appeal of the assessee is allowed for statistical purposes. appeal of the assessee is allowed for statistical purposes. appeal of the assessee is allowed for statistical purposes.
The second appeal relates to rejection The second appeal relates to rejection of approval under of approval under Section 80G of the Section 80G of the Act, which has been dismissed on grounds which has been dismissed on grounds identical to those discussed above, namely selection of an allegedly identical to those discussed above, namely selection of an allegedly identical to those discussed above, namely selection of an allegedly incorrect clause in Form No. 10AB. incorrect clause in Form No. 10AB. Since the foundational facts and Since the foundational facts and reasoning are materially similar, and no reasoning are materially similar, and no distinguishing feature has distinguishing feature has been brought to our notice, the impugned order under Section 80G been brought to our notice, the impugned order under Section 80G been brought to our notice, the impugned order under Section 80G is likewise set aside. The matter is restored to the Commissioner for is likewise set aside. The matter is restored to the Commissioner for is likewise set aside. The matter is restored to the Commissioner for fresh adjudication consistent with the directions issued in the fresh adjudication consistent with the directions issued in the fresh adjudication consistent with the directions issued in the appeal concerning registratio appeal concerning registration under Section 12AB.
In the result, both the appeals of the assessee In the result, both the appeals of the assessee In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open Court on ounced in the open Court on 16/02/2026. /02/2026.
Sd/- Sd/ Sd/- (KAVITHA RAJAGOPAL) (KAVITHA RAJAGOPAL (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 16/02/2026 Rahul Sharma, Sr. P.S.
Nishrin Bookwala Memorial Cancer Aid Trust Nishrin Bookwala Memorial Cancer Aid Trust & 7889/MUM/2025