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Facts
The assessee filed applications for registration under Section 12AB and approval under Section 80G. Due to an inadvertent mistake, the assessee clicked sub-clause (iii) instead of sub-clause (ii) while filling the online forms. Consequently, the Commissioner of Income Tax (Exemption) rejected the applications.
Held
The Tribunal noted that procedural irregularities, especially those that are curable and do not defeat substantive rights, should not lead to the rejection of an application. Relying on Supreme Court judgments, the Tribunal held that rules of procedure are meant to facilitate justice and not to obstruct it. The inadvertent error in selecting the sub-clause should not penalize the assessee.
Key Issues
Whether an application for registration/approval can be rejected solely due to a procedural, inadvertent mistake in selecting the wrong sub-clause online, despite the substantive requirements being met?
Sections Cited
12A(1)(ac)(ii), 12AB, 80G, 12A(1)(ac)(iii), 80G(5)(iii), 80G(5)(ii)
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Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against the order dated 25.09.2025 passed by the ld. Commissioner of Income Tax (Exemption), Chennai rejecting the applications dated 22.02.2025 in Form No. 10AB under section 12A(1)(ac)(ii) of the Income Tax Act, 1961 [“Act” in short] seeking registration under section 12AB of the Act as well as seeking approval under section 80G of the Act respectively.
Since, the issues raised in these appeals are similar based on the same identical facts, with the consent of both the parties, we proceed to hear all the appeals together and pass consolidated order for the sake of convenience.
First, we shall take up appeal in for adjudication.
The ld. AR Ms. S. Sonali, Advocate submits that while applying for registration under section 12AB of the Act, inadvertently clicked sub- clause (iii) instead of sub-clause (ii) of section 12A(1)(ac) of the Act, because of which, the ld. CIT(E) rejected the application filed online dated 22.02.2025. She prayed that the inadvertent mistake should not come in the way of the assessee to get the registration under section 12AB of the Act. She relied on the order dated 19.03.2025 in the case of Elim Church Education Centre – Religious & Charitable Trust v. CIT(E) in ITA No. 2813/Chny/2024. The ld. DR Shri AR V Sreenivasan, CIT did not oppose the submissions of the ld. AR.
Having heard both the parties, we note that in order to seek registration under section 12AB of the Act, the assessee had filed application under sub-clause (ii) of clause (ac) of section 12A(1) of the Act, but, inadvertently clicked sub-clause (iii) instead of sub-clause (ii) of 3 & 3568/Chny/25 section 12A(1)(ac) of the Act and the ld. CIT(E) rejected the application filed by the assessee dated 22.02.2025 by passing impugned order dated 25.09.2025. On perusal of the order dated 19.03.2025 in the case of Elim Church Education Centre – Religious & Charitable Trust v. CIT(E) (supra), we find, the Tribunal, by placing reliance on the decision of the Hon’ble Supreme Court in the case of United Bank of India v. Naresh Kumar AIR 1997 SC 3, wherein, it was observed “as far as possible, a substantive right should not be defeated on account of a procedural irregularity which is curable” and in the case of Associated Journals Ltd. v. Mysore Paper Mills Ltd., reported in [2006] 69 SCL 311 (SC), it was observed by the Hon’ble Supreme Court “… Rules of procedure cannot be a tool to circumvent the justice. In fact, the Rules are laid to help for speedy justice … Technical defects in petition are curable…..”, directed the ld. CIT(E) to treat the application filed by the assessee as if it has been filed under clause (iii) instead of clause (vi) of section 12A(1)(ac) of the Act in that case.
Further, the Tribunal referred to decision in the case of Owners & Parties interested in MV Vali Perov. Fernandeo Lopez AIR 1989 SC 2206, the Hon’ble Supreme Court has observed “Rules of procedure are not by themselves an end, but means to achieve the ends of justice. Rules of procedure are tools forged to achieve justice and are not hurdles to obstruct the pathway to justice. Construction of a rule of procedure which promotes justice and prevents its miscarriage by enabling the Court to do justice in myriad situations, all of which can’t be envisaged, acting within the limits of permissible construction, must be preferred to that which is rigid and negatives the cause of justice. Procedure is meant to sub-serve and not rule the cause of justice”.
In the light of the aforesaid decisions of the Hon’ble Supreme Court, we are of the view that the inadvertent mistake made by the assessee while clicking the online portal i.e. clicking sub-clause (iii) instead of sub- clause (ii) of the Act should not have resulted in rejection of the application filed by the assessee for renewal of registration under section 12AB of the Act. Therefore, we direct the ld.CIT(E) to treat the application filed by the assessee Trust as if it has been filed under clause (ii) instead of clause (iii) and process the application for renewal under section 12AB of the Act in accordance with law and the assessee is directed to file all the required documents to prove the genuineness of its activities as prescribed under the Act, after hearing the assessee. Thus, the grounds raised by the assessee are allowed for statistical purposes.
8. Since we have remanded the matter relating to registration under section 12A(1)(ac)(iii) of the Act for fresh consideration by the ld. CIT(E), in the present case, while filing the application seeking approval under section 80G of the Act also, the assessee has inadvertently filed the application for renewal under section 80G(5)(iii) instead of section 80G(5)(ii) of the Act, because of which, the ld. CIT(E) rejected the application filed online dated 22.02.2025. Accordingly, we remand this matter to the file of the ld. CIT(E) for fresh consideration by affording one more opportunity to the assessee for furnishing the details as required by the ld. CIT(E). Thus, the grounds raised by the assessee are allowed for statistical purposes.