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Facts
The assessee filed applications for registration under Section 12AB and approval under Section 80(G). The applications were rejected by the CIT(E) because the assessee inadvertently selected an incorrect sub-clause in Section 12A application. The assessee's appeals were consolidated as they were based on common facts.
Held
The Tribunal held that the incorrect selection of a sub-clause in Section 12A application was a minor mistake and not fatal. Relying on previous decisions, the Tribunal directed the CIT(E) to treat the application under the correct sub-clause and consider it on merits after providing the assessee an opportunity to prove its eligibility.
Key Issues
Whether rejection of applications for registration under Section 12AB and approval under Section 80(G) was justified due to inadvertent selection of an incorrect sub-clause in the Section 12A application.
Sections Cited
Section 12AB, Section 80(G), Section 12A
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PER PAWAN SINGH, JUDICIAL MEMBER:
These two appeals by the assessee are directed against the separate orders of learned CIT (E) Mumbai both dated 30.09.2025. In the assessee has challenged the rejection of application for registration of assessee-Trust under Section 12AB. In Section 80(G). Both the appeals are inter-connected, based on common set of fact, therefore, both the appeals are clubbed, heard together and are decided by common order.
The rival submissions of both the parties have been heard and record perused. The ld. Authorised Representative (AR) of the assessee submits that at the time of filing application under Section 12A for registration of assessee-Trust the assessee selected inappropriate clause/sub-clause.
The assessee inadvertently selected incorrect Section 12A(1)(ac)(iv) instead of Section 12A(1)(ac)(iii). The ld. CIT (E) rejected the application by taking view that there is no provision for correction/amendment/modification in the application filed by assessee.
The ld. AR for the assessee submit that there are a series of decision including decision of Surat Bench in Shree Swaminarayan Gadi Trust Vs. CIT (E) [2024] 162 taxmann.com 772 (Surat-Trib.), wherein it was held that where assessee-trust while filing application for registration under section 12A/12AB in Form-10AB, selected section 12A(1)(ac)(iv) instead of instead of section 12A(1)(ac)(iii) and ld CIT(E) rejected application on ground that he had no power to change or rectify application filed in Form-10AB, as mistake in filing entry was not fatal, CIT(E) was to be directed to treat application of assessee under section 12A(1)(ac)(iii) and to consider case on merits.
In support of other appeal in the ld. AR for the assessee submits that this appeal relates to registration of assessee for approval of fund under Section 80(G). Once the application under Section 12A was rejected, the assessee’s application under Section 80(G) was also rejected. The ld. AR of the assessee submits that matter may be restored back to the file of ld. CIT (E) for considering the application of assessee to reconsider it after taking decision on application for registration under Section 12AB, as registration under section 12AB is pre condition for approval of fund under Section 80(G).
We have considered the submission of both the parties. We find that a very small dispute is involved in the present appeal about inappropriate selection of clause/sub-clause of Section 12A which resulted into dismissal of their respective application. We find that coordinate Benches of the Tribunal in a series of decision including decision in Shree Swaminarayan Gadi Trust Vs. Commissioner of Income Tax (Exemptions) [2024] 162 taxmann.com 772 (Surat-Trib.) held that where assessee-trust while filing application for registration under Section 12A/12AB in Form 10AB selected section 12A(1)(ac)(iv) instead of Section 12A(1)(ac)(iii) and Commissioner (Exemptions) rejected application on ground that he had no power to change or rectify application filed in Form-10AB, as mistake in filing entry was not fatal, Commissioner (Exemptions) was to be directed to treat application of assessee under Section 12A(1)(ac)(iii) and to consider the case on merits.
Thus, taking the consistent view, the application filed by assessee for registration under Section 12A is restored back to the file of ld. CIT (E) to consider the application of assessee under Section 12A(1)(ac)(iii) and to decide the application on merit. Needless to direct that before passing the order, the ld. CIT (E) shall allow reasonable opportunity to assessee to prove its object and activities and other statutory requirement. The assessee is also directed to make timely compliance before ld CIT(E).
Further, considering the fact that application of assessee under Section 12A for registration under Section 12AB has been restored back to the file of CIT (E) therefore, grounds of appeal in Section 80(G), is also restored back to the file of CIT (E) to pass order after taking decision in application for registration under Section 12AB. In the result, both the appeals filed by assessee are allowed for statistical purpose.
In the result, both the appeals filed by assessee are allowed for statistical purpose.