Case Law Details
Anjuman Falahe Daren Vs Income Tax Department (ITAT Ahmedabad)
The ITAT Ahmedabad allowed the assessee’s appeal for statistical purposes and held that registration under Section 12A cannot be denied merely because of a bona fide error in mentioning the incorrect clause in the application form.
The assessee-trust had initially obtained provisional registration under Section 12A(1)(ac)(vi)(A) through an order dated 28.10.2022. Thereafter, it applied for final/regular registration before the Commissioner of Income Tax (Exemption) [CIT(E)]. However, while filing the prescribed form, the assessee inadvertently selected Section 12A(1)(ac)(ii) instead of Section 12A(1)(ac)(iii).
The CIT(E) rejected the application solely on the ground that his office could not suo motu change the clause under which the application was filed.
The Tribunal observed that after amendments effective from 01.04.2021, there had been widespread confusion regarding interpretation of the provisions, not only among assessees and tax professionals but also among tax authorities. It noted that even the CBDT had issued clarifications and extended timelines due to such confusion. The Tribunal further observed that coordinate benches had consistently held that assessees should not be penalized for genuine mistakes in mentioning incorrect clauses in application forms.
The ITAT noted that the CIT(E) was aware that the assessee was otherwise eligible for registration. Accordingly, the impugned order was set aside and the matter was restored to the CIT(E) with directions to treat the application as filed under Section 12A(1)(ac)(iii) and decide it afresh on merits in accordance with law.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Exemption), (hereinafter referred to as “CIT(E)”), Ahmedabad dated 15.09.2025.
2. In this case, the assessee applied for provisional registration u/s. 12A(1)(ac)(vi)(A) of the Act, which was granted to the assessee-trust vide order of the Ld. CIT(E) dated 28.10.2022. The assessee, thereafter, applied for regular/final registration to the Ld. CIT(E). However, the assessee inadvertently mentioned/ticked the clause as 12A(1)(ac)(ii) instead of clause (iii) in the prescribed form. Merely, on this ground, the Ld. CIT(E) rejected the application of the assessee observing that his office suo moto cannot change the clause under which the application has to be made.
3. It is observed here that after the amendment to the relevant provisions w.e.f. 01.04.2021, there were many misunderstandings and confusions about the correct interpretation of the same, not only among the assessees/Income Tax professionals, but also with the Income Tax Authorities. Even the CBDT had to issue circulars and clarifications regarding correct interpretation of the relevant provisions from time to time. Even the time/limitation for making the applications has also been extended from time to time taking note of such confusions in properly understanding relevant provisions. The Co-ordinate Benches of the Tribunal have held time and again that due to the complex provisions and even there being certain discrepancies in prescribed forms for issuing certificates, the assessees should not be punished for any mistake in mentioning the relevant clause in the application form. In the case in hand, the entire facts were before the Ld. CIT(E) and he was very much aware that the case of the assessee was otherwise eligible for granting final/regular registration, however, he found himself helpless only because the assessee had not mentioned correct clause. It has been held time and again that the litigants should not be punished for their bona fide The impugned order of the Ld. CIT(E) is set aside and the matter is restored to the file of the CIT(E). It is directed that the Ld. CIT(E) will treat the application moved by the assessee under the relevant clauses 12A(1)(ac)(iii), irrespective of the clause mentioned by the assessee in the application form and will decide the application of the assessee afresh on merits in accordance with law.
4. With the above observations, the appeal of the assessee is treated as allowed for statistical purposes.
This Order pronounced on 20/05/2026
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