MADHYA PRADESH INDUSTRIAL FOUNDATION,POLOGROUND, INDUSTRIAL STATE vs. EXEMPTION WARD INDORE, MAIN BUILDING, INDORE

It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the facts of case, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing.

5. In these matters, the assessee is aggrieved by the action of CIT(E) in rejecting assessee’s applications for registration u/s 12AB and approval u/s 80G. The Ld. CIT(E) has rejected assessee’s application for final registration u/s 12AB on a technical reason that the assessee was existing since

Madhya Pradesh Industrial Foundation & 148/Ind/2025 19.10.1965 and therefore not eligible to obtain provisional registration u/s 12AB under “Item (A) of section 12A(1)(ac)(vi)”. The Ld. CIT(E) has assigned similar technical reason for rejecting assessee’s application for final approval u/s 80G by stating that the assessee was existing since 19.10.1965, therefore it was not eligible to obtain provisional registration u/s 80G under “Item (A) of clause (iv) of first proviso to sub-section (5) of section 80G”.

Assigning these reasons, the Ld. CIT(E) rejected applications for final registration u/s 12AB/final approval u/s 80G and also cancelled the provisions registration u/s 12AB/provisional approval u/s 80G. For the sake of immediate reference, we re-produce below the order passed by CIT(E) in the matter of section 12AB:

“Annexure (mentioned in row-9 above) The assessee has applied in Form 10AB for registration u/s 12AB under the new provision of Income Tax Act, 1961. Consequently, opportunity letters were issued to the assessee and various documents/details were called for, to process the said application and to verify the eligibility of the assessee. The assessee has submitted his reply during the proceedings. 2- On perusal of record, it is found that the assessee has obtained provisional registration from CPC on 21.02.2024 under Item (A) of section 12A(1)(ac) (vi) of the Act. The aforesaid clause was applicable for the institution which had not commenced its activities. 3-The relevant part of Item (A) of section 12A(1)(ac)(vi) of the Act applicable from 01.10.2023 is as under- 12A. (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled. namely - (ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in Page 5 of 12

Madhya Pradesh Industrial Foundation & 148/Ind/2025 the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution- ((vi) in any other case, where activities of the trust or institution have- (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought: 4-It is clear from above that Item (A) of section 12A(1)(ac)(vi) of the Act is applicable only for those assessees whose activities had not commenced. On perusal of documents submitted by the assessee and data available on record, it is noticed that the assessee is an old entity established on 19th October, 1965 after obtaining registration from the office of the Registrar of Firms & Societies Madhya Pradesh, Bhopal and is already running its activities for long. Hence, the assessee was not eligible to obtain Provisional Registration from the CPC under Item (A) of section 12A(1)(ac)(vi) of the Act. Hence, the Provisional Registration of the assessee obtained from the CPC under Item (A) of section 12A(1)(ac) (vi) of the act is 'invalid". 5-Considering the facts of the case and reasons mentioned above, the application filed in Form 10AB for grant of registration u/s 12A(1)(ac) (iii) of the Act is hereby rejected and the provisional registration obtained from CPC in wrong clause is also hereby cancelled. Note- Please note that due to above technical issue, merits of the case have not been examined.”

(i) Sirseth Sarupchand Hukum Chand Charitable Trust Vs. CIT(Exemption), (ITAT, Indore): This order is authored by learned J.M. forming part of this very bench. The relevant paras of order are re-produced below: Page 6 of 12 Madhya Pradesh Industrial Foundation & 148/Ind/2025

“4.3 We basis records of the case and after hearing and upon examining the rival contentions are of the considered opinion that "Impugned order" is in violation of the principles of natural justice as Ld. CIT (E) ought to have given an opportunity to the assessee trust to rectify the mistake which opportunity was not given. We also hold that it is substance which is of importance and not the Form or clauses mentioned therein. Mistake/error is not that serious enough which should result in rejection of an application for final registration which was made bonafidely. There is no finding in the "impugned order" that it was made willfully and/or deliberately with intention to make a wrongful gain. Under these facts and circumstances we set aside the "impugned order" back to the file of CIT (E) with a direction to re-examine the case for final registration afresh and thereafter pass a fresh order on denovo basis. We direct the assessee to rectify the mistake which has occurred and quote correct provision of law as soon as possible before Ld. CIT (E) take up the case on denovo basis in relevant form. We direct CIT(E) to pass a detailed order on merits, basis information and documents provided by the assessee trust for the purpose of final registration.”

(ii) Aashritha The Dr U Sankarnarayana Raju Vs. CIT(Exemption), ITA

No. 208 & 209/Hyd/2025 (ITAT, Hyderabad):

“3. The learned AR of the assessee has submitted that the assessee Trust was constituted on 13/06/2008 and it was granted registration u/s 12A vide order dated 12/05/2009, a copy of the registration is filed by the assessee at Page No.1 of the Paper Book. The assessee was also granted approval u/s 80G(5) of the Act vide order 17/8/2019 w.e.f. 1/4/2009, a copy of the same is placed at pages 2 & 3 of the paper book. As per the amendment made in the provisions of section 12A and 80G, the assessee was required to file the application for renewal of the registration u/s 12AB as well as approval u/s 80G(5) of the Act. Accordingly, the assessee has filed an application in Form 10A for the renewal of the registration u/s 12A as well as approval u/s 80G of the Act. However, due to an inadvertent mistake in selection of wrong section code clause (iv), the CPC granted provisional registration u/s 12AB as well as provisional approval u/s 80G. Thereafter, the assessee filed the application in Form 10AB for the regular registration u/s 12AB as well as regular approval u/s 80G which were rejected by the CIT (Exemptions) on the ground that the application becomes infructuous as the assessee has selected wrong section code while filing the application. Thus, the learned AR has submitted that the rejection of the application on technical reasons and merely due to a bonafide mistake in selecting the wrong section code is not justified. He has referred to the CBDT Circular No.7/2024 whereby the due date was extended up to 30/06/2024 for making the application in Form 10A for fresh registration u/s 12AB as well as approval u/s 80G of the Act for the existing Trusts which are already having registration u/s 12A and approval u/s 80G prior to 1/4/2021. The learned AR has submitted that in the same circular, the CBDT has also extended the due date up to 30/06/2024 for making the application in Form 10AB for regular registration u/s 12AB and regular approval u/s 80G in cases of the Trusts which have been granted provisional

Madhya Pradesh Industrial Foundation & 148/Ind/2025 registration u/s 12AB as well as provisional approval u/s 80G after 1/4/2021. The assessee has filed the first application in Form 10A as applicable in case of the Trusts already having registration prior to 1/4/2021, however, due to bonafide mistake in selecting the section code instead of renewal of the resignation u/s 12AB and approval u/s 80G(5), a provisional registration and approval was granted. Thus, the learned AR has submitted that the application filed by the assessee ought to have been considered for renewal of the registration u/s 12AB as well as approval u/s 80G(5) instead of granting provisional registration and approval and consequently, the CIT (Exemptions) is not justified in rejecting the registration u/s 12AB and approval u/s 809G(5) of the Act. In support of his contentions, he has relied upon the following decisions: i) ITAT Hyderabad Benches in the case of Mandava Foundation vs. Income Tax Officer (E) in ii) ITAT Hyderabad Benches in the case of Seven Hills Educational Society vs. Income Tax Officer (E) reported in (2024) 169 Taxmann.com 144 (Hyd.) iii) ITAT Delhi Benches in the case of Raj Krishan Jain Charitable Trust vs. CIT (Exemptions) in iv) ITAT Cochin Tribunal in the case of Sahrdaya Educational Trust vs. CIT (Exemptions) reported in (2025) 173 Taxmann.com 151 (Cochin-Trib). v) ITAT Hyderabad Benches in the case of Telangana State Chapter Indian Radiological & Imaging Association vs. Income Tax Officer (E) in IRTA No.255/Hyd/2023 Page 6 of and 209 of 2025 Ashritha The Dr U Sankaranarayana Raju Charitable Trust vi) ITAT Hyderabad Benches in the case of Unicorpus Health Foundation vs. CIT (Exemptions) in vii) ITAT Pune Benches in the case of Help for Children in Need Foundation vs. CIT (Exemptions) in ITA No.1774/PUN/2024. viii) ITAT Ahmedabad Benches in the case of Idrashi Innovative Foundation vs. CIT (Exemptions) in 2023

4. On the other hand, the learned DR has submitted that this is a mistake on the part of the assessee while filing the application for renewal of the registration u/s 12AB as well as approval u/s 80G of the Act as the assessee has opted for provisional registration and approval instead of renewal of existing registration prior to 1/4/2021. Thus, the application of the assessee was considered by the CPC for granting provisional registration u/s 12AB as well as approval u/s 80G and thereafter, when the assessee filed the application in Form 10AB, the CIT (Exemptions) has rightly rejected the same by considering the fact that the assessee is not falling in the category of the Trust seeking first time registration after 1/4/2021 but the assessee was already in existence and having registration prior to 1/4/2021. The learned DR has further submitted that the CIT (Exemptions) had no power to extend the time limit for filing the application in Form 10A or 10AB. He has relied upon the impugned order of the CIT (Exemptions).

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6. Thus, the CIT (Exemptions) has not doubted or questioned the other requirements and conditions satisfied by the assessee being a Trust having charitable objects and also carrying out the charitable activities since past several years, but the application of the assessee was dismissed only on the technical ground of wrong selection of section code. It is a matter of fact that the assessee initially applied in Form 10A but due to some technical bonafide mistake, a provisional registration as well as approval was granted which cannot be a reason for denial of renewal of the registration u/s 12AB as well as approval u/s 80G(5) of the Act. The application of the assessee ought to have been decided by the CIT (Exemptions) based on the undisputed fact and not on the technicalities. This Tribunal has considered this issue in a series of decisions as relied upon by the learned AR of the assessee. In the case of Telangana State Chapter Indian Radiological & Imaging Association vs. Income Tax Officer (E) (Supra), the Tribunal has considered an identical issue in para 11 to 13 as under:

"11. We have heard the rival contentions of the parties and perused the material available on record. Admittedly, the assessee was a society, which was holding registration u/s. 80G of the Act prior to 31.03.2021 and was required to submit the application u/s. 80G(5) of the Act after ticking the correct 'section code-12' in form 10A. However, on account of the error in submitting the correct application, the provisional registration was granted to the assessee on 19.03.2022. As per the section 80G(5)(iii) of the Act, the assessee was required to file an application for permanent registration within six months of grant of provisional registration. The relevant portion of the Act, provides as under: (iii) where the application is made under clause (iv) of the said proviso, pass an order in writing granting it approval

Madhya Pradesh Industrial Foundation & 148/Ind/2025 provisionally for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the institution or fund:

Provided also that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the first proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received:

Provided also that the approval granted under the second proviso shall apply to an institution or fund, where the application is made under-- (a) clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund. (b) clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved. (c) in any other case, from the assessment year immediately following the financial year in which such application is made.]

Madhya Pradesh Industrial Foundation & 148/Ind/2025

Needless to say, that the assessee is also directed to co-operative with the ld.CIT(E) and shall file all the necessary details as may be required by the authorities so as to facilitate earlier and speedy disposal of the case."

7. Thus, the judicial view is that the application of assessee should not be rejected on mere technical mistake of selecting wrong code at the time of seeking provisional registration/approval or final registration/approval.

Respectfully carrying the same view, we are inclined to remand both of these matters to Ld. CIT(E) for a fresh consideration. We adopt the very same reasoning and very same adjudication as given by co-ordinate benches of ITAT in above decisions. Ordered accordingly.

Madhya Pradesh Industrial Foundation & 148/Ind/2025

8. Resultantly, these appeals are allowed for statistical purposes.

Order pronounced in open court on 27/02/2026