Samarth Bharat Sanskar Kendra Vs Commissioner of Income (E) (ITAT Pune)
The Pune ITAT came to the rescue of a charitable trust whose 12A registration application was rejected merely because it was filed under the wrong clause of Section 12A(1)(ac) and certain compliances could not be furnished within an extremely short time. The Tribunal held that such procedural lapses cannot defeat the claim of a genuine existing charitable trust.
The CIT(E) had not only rejected the trust’s application for regular registration but had also gone a step further and cancelled the provisional registration already granted earlier, alleging non-compliance with notices and inability to verify genuineness of activities.
Before the Tribunal, the assessee explained that it was an old trust already registered under the erstwhile Section 12A regime, and while migrating into the new registration framework, the application was inadvertently filed under the wrong statutory code. The assessee also pointed out that the show cause notice involved voluminous queries and extremely limited time was granted for compliance.
The ITAT found merit in the assessee’s contention and observed that the trust was clearly a continuing charitable institution and not a newly formed entity. The Tribunal held that there was a bonafide inadvertent error/confusion in selecting the correct clause while filing Form 10AB and that the CIT(E) ought to have considered the beneficial spirit of CBDT Circular No. 6 of 2023.
Relying on the Mumbai ITAT ruling in Buddhadev Educational Charitable Trust, the Tribunal set aside the order and directed the CIT(E) to treat the application as filed under the correct section code, permit rectification or fresh filing if required, and decide the matter afresh on merits after granting proper opportunity of hearing.
The ruling reiterates that procedural mistakes, technical coding errors and curable defects should not become grounds to deny exemption benefits to otherwise genuine charitable institutions.
FULL TEXT OF THE ORDER OF ITAT PUNE
