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Facts
The assessee, a trust, applied for 80G approval in Form No. 10AB under Section 80G(5)(ii) of the Income Tax Act. The CIT(E) rejected the application, deeming it non-maintainable, on the grounds that the assessee, having provisional approval under Section 80G(5)(iv), should have applied under Section 80G(5)(iii) for permanent registration. The assessee argued this was a typographical error.
Held
The Tribunal found that the assessee's error in citing sub-clause (ii) instead of (iii) was merely typographical. Following a precedent from ITAT Ahmedabad, the Tribunal set aside the CIT(E)'s rejection order and directed the CIT(E) to pass a fresh order on the merits after the assessee files a rectified application under the correct Section 80G(5)(iii).
Key Issues
Whether an application for 80G approval can be rejected solely due to a typographical error in citing the relevant sub-clause (80G(5)(ii) instead of 80G(5)(iii)) when the assessee was already granted provisional approval.
Sections Cited
Section 80G(5)(ii), Section 80G(5)(iii), Section 80G(5)(iv), Section 80G(5), Section 12AB, Income Tax Act, 1961
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
Captioned appeal filed by the assessee, is directed against the order passed by the Learned Commissioner of Income Tax (Exemption), Ahmedabad [in short ‘Ld. CIT(E)’], dated 12.03.2024, wherein the CIT(E) rejected the application of the assessee, filed in Form No.10AB, under Section 80G(5) (iii) of Income Tax Act, 1961 (in short ‘the Act’).
The grievances raised by the assessee are as follows:
Sneh Foundation vs. CIT(E)
“1. That, the learned CIT(Exemption) has wrongly rejected the application filed in form No. 10AB for granting approval u/s 80G(5) of the I.T. Act, 1961. 2. That the findings of the learned CIT(Exemption) are not justified in law as well as facts of the case and required to be deleted. 3. The appellant craves to add, alter, amend or delete any of the above grounds of appeal.”
The facts of the case which can be stated quite shortly are as follows: The assessee before us is a trust and has filed an application for approval under clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, in Form No. 10AB electronically, and as per data available, the same was filed in ITBA on 27/09/2023. This application was found to be prima- facie non-maintainable by Learned CIT (Exemption) and accordingly vide letter dated 02/11/2023, certain clarifications were sought from the assessee. In response, the assessee has filed its reply before ld. CIT(E), on 20/11/2023. On perusal of the details available on record, it was found by ld CIT(E ) that the assessee has been granted provisional approval 09-07-2021, under Clause (iv) of first proviso to sub-section (5) of section 80G, vide order for the period from AY 2021-22 to AY 2023-24. Accordingly, the assessee was required to file the application u/s 80G(5)(iii) in lieu of 80G(5)(ii) of the Act. In view of the above, the application filed on 27/09/2023, in Form No. 10AB, u/s. 80G(5) of the Act, was treated, by ld CIT(E ), as non- maintainable and therefore, ld. CIT(E ) rejected the assessee`s application.
Aggrieved by the order of the Ld. CIT(E), the assessee is in appeal before us.
Shri Kalpesh Doshi, Learned Counsel for the assessee, pleaded that Ld. CIT(E ) has rejected the application of the assessee, stating that Sneh Foundation vs. CIT(E) assessee had filed application under clause (ii) of first proviso to sub- section (5) of section 80G of the Income Tax Act, in Form No. 10AB. In fact, the application should have been filed by the assessee, under clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, in Form No. 10AB. The ld. Counsel submitted that this was a typographical error on the part of the assessee, in mentioning clause (ii), instead of clause (iii). Because of this typographical error, the ld. CIT (Exemption) should not have rejected the assessee`s application, rather, the application should be corrected by the ld CIT(E ) with the consent of the assessee.
On the other hand, Ld. CIT-DR for the Revenue, relied on the findings of the Ld. CIT(E).
We have heard the rival parties and have gone through the material placed on record. For the sake of clarity and also being pertinent, we reproduce solitary reason to reject the assessee`s application that assessee had filed application under clause (ii) of first proviso to sub-section (5) of section 80G of the Act, instead under clause (iii) of first proviso to sub-section (5) of section 80G of the Act. This is clearly a typographical error in preparing the application on the part of the assessee-trust. We note that the said issue is squarely covered by the judgment of the Co- ordinate Bench of the ITAT, Ahmedabad in order dated 5th April, 2024, wherein the Co-ordinate Bench held as follows:
“7. We have given our thoughtful consideration and perused the materials available on record. It is undisputed fact that the assessee was granted Provisional Registration u/s. 80G(5) of the Act by Ld. CIT(E) on 24.09.2021 for a period of three years upto the Asst. Year 2024-25. The only reason for rejecting Permanent Registration u/s. 80G(5) of the Act, the assessee wrongly filed the Sneh Foundation vs. CIT(E) application under 80G(5)(ii) instead of u/s. 80G(5)(iii) of the Act. It is undisputed fact that the assessee Trust is carrying out the charitable activities and granted registration u/s. 12AB of the Act on 06.10.2021 and also Provisional Registration u/s. 80G of the Act on 24.09.2021. Thus the genuineness of the activities carried out by the Trust is not doubted by the Ld. CIT(E), denial of Permanent Registration only the count of wrong mentioning of sub clause 80G(5) will certainly affects the charitable activities carried out by the Trust. In similar circumstances, the Co-ordinate Bench of the Kolkata Tribunal has set aside the matter to the file of Ld. CIT(E) and to pass order on merits, irrespective of the delay occurred in filing the fresh application for final approval u/s. 80G(5) of the Act. 6.1. Respectfully following the same, the present impugned order passed by Ld. CIT(E) is hereby set aside with a direction to Ld. CIT(E) to pass order on merits on the rectified application to be filed by the assessee. Needless to say, the assessee should file the application for Permanent Registration under clause (iii) of first proviso to Section 80G of the Act before Ld. CIT(E).
7. In the result, the appeal filed by the Assessee is allowed for statistical purpose.”
Therefore, we note that ld CIT(E ) rejected, assessee`s application stating that the assessee did not file the application u/s.80G(5)(iii) of the Act and stated that the assessee has filed the application u/s.80G(5)(ii) of the Act, so, it is non- maintainable. We find that this is a typographical error and the Ld. Counsel for the assessee also took us through paper book page no.13, wherein Form No.10AB is placed and stated that there was a typographical error in mentioning the Clause (ii). The correct Section would be 80G(5)(iii) instead of 80G(5)(ii) of the Act and this happened because of typographical error. In these circumstances, we direct the assessee to file a fresh application in Form No. 10AB, u/s.80G(5)(iii) of the Act, before the ld. CIT(Exemption). We also direct the Ld. CIT(E) to pass the order, on merit, on the rectified application, (to be filed by the assessee), in accordance with law. For statistical purposes, the assessee`s appeal is treated to be allowed.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Sneh Foundation vs. CIT(E)
Order is pronounced in the open court on 06/01/2025