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Facts
The assessee, Aarambh Yoga Foundation, had filed an application for approval under section 80G(5) of the Income-tax Act, 1961, but mistakenly mentioned sub-clause (ii) instead of sub-clause (iii) of the first proviso. The Commissioner rejected the application on this technical ground, despite the assessee admitting the error and requesting condonation.
Held
The Tribunal noted that the error in mentioning the sub-clause was a technical one, and similar situations have been condoned by coordinate benches and addressed by CBDT circulars. The Commissioner's rejection was based on a hyper-technical approach and was not in line with established precedents.
Key Issues
Whether rejection of an application for approval under section 80G(5) due to a technical error in mentioning the wrong sub-clause, when the assessee admitted the mistake and sought condonation, is justified.
Sections Cited
80G (5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI JAGADISH
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 23.08.2025, impugned herein, passed by Ld. Commissioner of Income Tax (Exemptions), (in short Ld. Commissioner), rejecting the Assessee’s application seeking approval under section 80G (5) of the Income-tax Act, 1961.
Aarambh Yoga Foundation 2. At the outset, it is observed that there is a delay of 28 days in filing the instant appeal, on which the Assessee explained that the person responsible for filing the appeal was out of station during the relevant period and therefore, the appeal could not be filed within the prescribed time limit. The delay was inadvertent, but not willful default or negligence on the part of the Assessee and therefore, it is humbly requested that the delay in filing of this appeal be condoned. On the contrary the Ld. DR refuted the claim of assessee. Considering the request for condonation of delay and the reason stated by the Assessee for the delay, as plausible and genuine and unintentional, the delay is condoned.
Coming to the merits of the case, we observe that the Assessee was holding provisional registration/approval under section 80G of the Act dated 12.5.2022 and therefore, in order to regularize the provisional approval, filed an application in Form 10 AB on 31.01.2025, which was taken into consideration by the Ld. Commissioner and rejected vide impugned order dated 23.08.2025 simply on the reason that the Assessee has filed an application under sub-clause (ii) of the first proviso of sub-section (5) of section 80G, instead of clause (iii) of such provision by side-lining the submission made by the Assessee on 05.08.2025, whereby the Assessee has admitted the inadvertent mistake in mentioning such sub- clause and pleaded to condone the above mentioned technical error.
Aarambh Yoga Foundation 4. We have given thoughtful consideration to the peculiar facts and circumstances of the case. Admittedly, the Ld. Commissioner in the impugned order himself has endorsed that the Assessee is having provisional registration for three years and sub-clause (ii) of first proviso to sub-section (5) of section 80G is applicable only for the trusts already having regular approval for five years and is seeking renewal for regular approval, which is due to expire, but still, the Ld. Commissioner rejected the application filed by the Assessee by rejecting the request of the Assessee for condonation of above mentioned technical error in mentioning, the sub-clause (ii) instead of sub-clause (iii), mainly by holding that since there is no provision available, as per the Act for amendment or modification of the application.
We observe that the Hon’ble Coordinate Bench of the Tribunal at Kolkata in the case of NITDAA Foundation vs CIT (167) taxman.com 111, has also dealt with the identical facts and circumstances and issue and ultimately set aside the identical impugned order, directing the Ld. CIT (E) to consider the similar application for grant of approval within a period of two months from the date of the receipt of the order. For brevity and ready reference, the conclusion drawn by the Hon'ble Bench is reproduced here in below: - “12. Thus, the whole controversy arose due to incorrect mention of the clause under which the application was required to be filed, which was mentioned as clause (iv) of the first proviso to sub-section (5) of section 80G in column 6 of Form No. 10AC whereas the same should have been mentioned as clause (i) of the first proviso to sub-section (5) of section 80G and the Ld. AR also admitted this fact in the course of the hearing. Since, Form No. 10AC was filed in time, the error on the part of the assessee for mentioning the wrong clause is deemed to be a curable defect and the application on Form No. 10AC is deemed to be filed under clause (i) of the first proviso to sub-section (5) of section 80G. The order of the Ld. CIT(Exemption) is hereby set aside and he is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) of the Act and consider the same for grant of approval under section 80G(5) to the trust in accordance with law within a period of 2 months from the date of receipt of this order. The assessee shall file all necessary evidence before him."
We further observe that the Hon'ble Coordinate Bench of the Tribunal in the case of Akhil Bhartiya Adhivakta Parishad, Ld. CIT (E), Delhi, ITA No. 4954/DEL/2024 decided on 19.02.2025, has also dealt with the identical situation and while relying on the aforesaid judgment, ultimately directed the Ld. CIT (E) to treat the application filed by the Assessee as valid under Clause (iii) of first proviso to sub-section (5) of section 80 G of the Act. For completeness, the conclusion drawn by the Hon'ble Coordinated Bench of the Tribunal at Delhi, is reproduced herein below: -
Further, CBDT in recent Circular No.7/2024 on 25.04.2024 vide para 4.1 provided that if the application was furnished under the wrong section or in wrong Forum than it may furnish a fresh application in correct form within the extended time provided in the circular. Thus by respectfully following the decision of co-ordinate bench in the case of Nitdaa Foundation (supra) and considering the CBDT circular No. 7/2024 (supra) wherein the issue of mentioning wrong section is considered as a common & frequent error and further looking to the fact that Ld. CIT, Exemption, Delhi has not examined the details filed by the appellant on merits of the case, we deem it fit to set-aside the order passed by Ld. CIT, Exemption, Delhi and remand the matter back to him with the direction to treat the application of the assessee as filed under clause (iii) of first
Aarambh Yoga Foundation proviso to sub-section (5) of section 80G and examine the details filed by the lim assessee for grant of approval u/s 80G(5) of the Act in accordance with law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by Ld. CIT, Exemption, Delhi in this regard and produce requisite information/documents in support of registration u/s 80G of the IT Act, otherwise Ld. CIT, Exemption, Delhi shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee in this appeal are partly allowed.”
In our considered view, order of the Ld. Commissioner “ rejecting the application filed by the Assessee on such kind of mistake, which was otherwise “specifically requested to be condoned, by the Assessee vide submission dated 05.08.2025, admitting its fault for erroneously mentioning the wrong sub-clause”, appears to be based on hyper-technical approach, and therefore cannot be endorsed and encouraged, specifically in view of aforesaid judgments by the Hon’ble Co- ordinate Benches of the Tribunal.
Thus, on the aforesaid analysis, we direct the Ld. Commissioner to treat the application filed by the Assessee as correct and/or under the relevant provisions of law as applicable thereto and/or sub-clause (iii), to the first proviso of section 80G(5) of the Act and decide such application within a reasonable time of three months from the date of receipt of this order, suffice it to say, by affording reasonable opportunity of being heard to the assessee. The Assessee is also directed to comply with the notices to be issued by the Ld. Commissioner and file the relevant submissions and documents, which would be essential for proper and just decision of the case.
In the result, assessee's appeal is allowed for statistical purposes.
Order pronounced in the open court on 11.02.2026.
Sd/- Sd/- (JAGADISH) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Tarun Kushwaha Sr. Private Secretary.