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Facts
The assessees/trusts appealed against orders of the CIT(Exemptions) rejecting their applications for final/regular registration under Section 12A or Section 80G(5) of the Income Tax Act. The rejections were due to the assessees selecting incorrect sub-clauses/clauses in the application forms, despite the amendments and complexity of the relevant sections.
Held
The Tribunal held that the CIT(E) was not justified in rejecting the applications based on inadvertent clerical errors in selecting the correct clause, especially when the intent of the application was clear. The Tribunal noted that recent amendments had caused confusion, and clarificatory circulars had been issued by the CBDT.
Key Issues
Whether rejection of applications for registration under Section 12A or 80G(5) is justified due to a clerical error in selecting the wrong clause in the application form, despite the clear intent of the application.
Sections Cited
12A, 80G(5)
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: Shri Sanjay Garg & Shri Bijayananda Pruseth
Date of hearing : 05-03-2025 Date of pronouncement : 30-04-2025 आदेश/ORDER Per Sanjay Garg, Judicial Member:
& others Jamate Sulemani Trust & others
The captioned appeals have been preferred by different assessees/trusts against the separate orders passed by ld. Commissioner of Income Tax (Exemptions), Ahmedabad [hereinafter referred to the CIT(E)]. and ITA 1352/Srt/2024 are against the rejection of the applications of the assessees for final/regular registration u/s. 12A of the Income Tax Act, whereas, in and 1354/Srt/2024, the concerned assessees have agitated against the rejection of their applications for final/regular registration u/s 80G(5) of the Income Tax Act.
At the outset, it has been brought to our knowledge that the ld. CIT(E) has rejected all the applications due to technical/clerical error while mentioning/marking the relevant clause/code in the application forms. The CIT(E) has mentioned that in relation to the applications filed by the assessee for regular registration u/s 12A of the Income Tax Act, the assessee was to file the application under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act, however, the assessee has chosen sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the Act. He therefore rejected the application of the assessee for final/regular registration due to marking of wrong clause in the application form. Similarly in relation to applications moved for regular registration u/s. 80G(5) of the Income Tax Act, the ld. CIT(E) has observed that the assessee was to choose/select clause (iii) of first proviso to sub-section (5) of section 80G of the Act, whereas, the assessee had selected clause (ii) of first proviso to sub-section (5) of section 80G of the Act in the prescribed Form 10AB.
& others Jamate Sulemani Trust & others
A perusal of the impugned orders of the ld. CIT(E) would reveal that the CIT(E) was well aware that the concerned assessees had been granted provisional approvals u/s. 12A or u/s. 80G(5), as the case may be, and that the present applications were moved by the concerned assessees for grant of final/regular approvals under the relevant sections either u/s. 12A or u/s. 80G(5) of the Income Tax Act. It is pertinent to mention here that due to several recent amendments in the relevant provisions of the sections 12A/12AA/12AB and section 80G of the Income Tax Act, a confusion relating to the various clauses of the relevant sections and prescribed forms have occurred not only amongst the assessees but also amongst professionals/tax practitioners as well as the income tax authorities. Even the CBDT has also issued clarificatory circulars. Due to the complexity of the provisions, if an inadvertent mistake had occurred in the application from furnished by the assessees while selecting the relevant code/column in the prescribed application form, but at the same time the said mistake was apparent from the contents of the application and it was apparent that the said applications have been made by the concerned assessees for final/regular registrations under the relevant provisions either of section 12A or section 80G of the Act, as the case may be, the Ld. CIT(E), in our view, was not justified in rejecting such applications. In view of this, the impugned orders of the CIT(E) in the captioned appeals are set aside. It is directed that the applications moved by the concerned assessees for regular registration u/s. 12A will be read and treated to have been moved under sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, whereas, the applications pertaining to the approval u/s. 80G(5) will be read and treated to have been moved under clause 3 & others Jamate Sulemani Trust & others (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, irrespective of the fact that the assessee has mentioned any other clause inadvertently in the said application forms. The ld. CIT(E) will consider and decide the said applications in accordance of law within a period of 90 days from the date of receipt of copy of this order.
With the above observations, all the four appeals are treated as allowed for statistical purposes.