Case Law Details
Della Foundation Vs CIT (Exemptions) (ITAT Mumbai)
The assessee filed two appeals before the Income Tax Appellate Tribunal (ITAT), Mumbai, challenging orders dated 21.11.2024 passed by the Commissioner of Income Tax (Exemptions) [CIT(E)].
In ITA No. 413/Mum/2025, the assessee challenged the rejection of its application in Form No. 10AB seeking registration under Section 12AB of the Income Tax Act, 1961. The assessee had previously been granted provisional registration under Section 12AB in Form 10AC, valid from Assessment Year 2022-23 to Assessment Year 2024-25. It subsequently applied in Form 10AB for renewal of registration.
The CIT(E) rejected the application on the ground that the assessee had filed it under Section 12A(1)(ac)(ii), which applies to trusts already holding regular registration and seeking its renewal. Since the assessee held only provisional registration, the CIT(E) held that the applicable provision was Section 12A(1)(ac)(iii) and rejected the application as having been filed under the wrong provision.
Before the Tribunal, the assessee submitted that it had intended to apply for renewal of its provisional registration and that the reference to Section 12A(1)(ac)(ii) was an inadvertent error. It contended that it had not been informed of the defect in the application and that the rejection order had been passed without giving it an opportunity to explain or rectify the mistake. The assessee further submitted that the documents and details accompanying the application demonstrated that it was intended to be an application under Section 12A(1)(ac)(iii).
The Departmental Representative argued that the CIT(E) was justified in rejecting the application since it had been filed under an incorrect provision.
After considering the rival submissions, the Tribunal noted that it was an admitted position that the assessee had earlier been granted provisional registration under Section 12AB. The Tribunal accepted the assessee’s contention that, since it had not been confronted with the defect in the application, it had been deprived of the opportunity to explain that the incorrect statutory provision had been mentioned unintentionally.
Taking into account the overall facts and circumstances, the Tribunal held that the assessee should be given another opportunity to present its case for renewal under Section 12A(1)(ac)(iii). Accordingly, it set aside the order dated 21.11.2024 passed by the CIT(E) and restored the application to its original number. The Tribunal directed the CIT(E) either to treat the application as one filed under Section 12A(1)(ac)(iii) or to grant the assessee an opportunity to file a rectified application. It further clarified that the CIT(E) would be at liberty to decide the application on its merits in accordance with law after granting the assessee an opportunity to make submissions and file supporting documents. All rights and contentions of the assessee were left open. The appeal was allowed for statistical purposes.
In ITA No. 373/Mum/2025, the assessee submitted that the appeal was a duplicate appeal filed inadvertently while removing defects pointed out by the Registry, as a complete set had been filed again as a new appeal. The Departmental Representative raised no objection. Since the Tribunal had already adjudicated ITA No. 413/Mum/2025, it dismissed ITA No. 373/Mum/2025 as a duplicate appeal.
The Tribunal concluded by allowing ITA No. 413/Mum/2025 for statistical purposes and dismissing ITA No. 373/Mum/2025 as a duplicate appeal.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. These are two appeals preferred by the Assessee which were heard together and are being disposed of by way of a common order.
ITA No.413/Mum/2025
2. We would first take up ITA No.413/Mum/2025 which has been preferred by the Assessee against the order, dated 21/11/2024, passed by Commissioner of Income Tax (Exemption), Mumbai [hereinafter referred to as the ‘CIT(E)’] whereby the application filed by the Assessee in Form No.10AB seeking registration under Section 12AB of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] was rejected.
3. The relevant facts in brief are that the Assessee was granted Provisional Registration under Section 12AB of the Act in Form 10AC [valid from Assessment Year 2022-2023 to Assessment Year 2024-2025]. The Assessee made an application in Form 10AB seeking renewal of registration which was rejected by way of the order impugned in the following manner:
“2. As the trust is registered, provisions of section 12A(1)(ac)(iii) are applicable to it, which is reproduced as under:
“(iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier;”.
3. On perusal of the From 10AB filed by the assessee it was observed that the assessee has applied under section 12A(1)(ac)(ii) which is valid only for trusts already having regular registration for five years and is seeking renewal of regular registration which is due to expire. The assessee, having provisional registration for three years, does not qualify to make the application u/s 12A(1)(ac)(ii).Thus, the application for registration in Form 10AB filed by the assessee is not allowable on the ground of application filed under wrong section.
4. In conclusion this application stands rejected.”
(Emphasis Supplied)
4. Being aggrieved, the Assessee has preferred the present appeal before this Tribunal.
5. During the course of hearing the Learned Authorised Representative for the Assessee submitted that the Assessee had applied for renewal of provisional registration. However, the aforesaid application was rejected vide Order, dated 21/11/2024, on the ground that the renewal application was made under wrong provision [i.e. Section 12A(1)(ac)(ii)] which was applicable to charitable organization already holding regular registration and seeking renewal of the same. The grievance of the Assessee is that the Assessee was not put to notice about the defect in the application and the order rejecting application was passed without giving any opportunity to the Assessee. Per contra, the it was submitted by the Learned Departmental Representative that since the Assessee had made application under incorrect provision, the CIT(E) was justified in rejecting the application. In rejoinder, the Learned Authorised Representative for the Assessee submitted that it was on account of inadvertent error that incorrect provision was mentioned. It was submitted that all the documents and details furnished by the Assessee support the contention of the Assessee that the application was sought to be made under Section 12A(1)(ac)(iii) of the Act.
6. We have considered the rival submission, perused the material on record and examined the position in law.
7. It is admitted position that the Assessee was previously granted provisional registration under Section 12AB of the Act. It is the case of the Assessee that on consideration the documents and details filed along with the application it can be seen that the application was intended to be made under Section 12A(1)(ac)(iii) of the Act. However, since the Assessee was not confronted with defect in the application, the Assessee was not able to explain before the Learned CIT(E) that an unintentional mistake had occurred while filing the application. We find merit in the aforesaid contention advanced on behalf of the Assessee. Taking into consideration overall facts and circumstances of the present case, we deem it appropriate to grant another opportunity to the Assessee to set out a case for renewal of registration in terms of Section 12A(1)(ac)(iii) of the Act. Accordingly, we set aside the Order, dated 21/11/2024, passed by the Learned CIT(E) and restore the application filed by the Assessee to its original number. The Learned CIT(E) is directed to either treat the application filed by the Assessee as application filed under Section 12A(1)(ac)(iii) of the Act or grant opportunity to the Assessee to file rectified application. It is clarified that the Learned CIT(E) would be at liberty to decide upon the merits of the application as per law after granting the Assessee an opportunity to make submission and file documents/details in support of the application. All rights and contentions of the Assessee are left open.
8. In terms of paragraph 7 above, the appeal preferred by the Assessee is allowed for statistical purposes.
ITA No.373/Mum/2025
9. Next we would first take up ITA No.373/Mum/2025. We find that the aforesaid appeal has also been preferred by the Assessee against the order, dated 21/11/2024, passed by the CIT(E).
10. During the course of hearing the Learned Authorised Representative for the Assessee submitted that this is a duplicate appeal and the same be dismissed as not pressed. It was submitted that the for the purpose of removing the defects marked by the registry, a complete set was filed again as a new appeal inadvertently. The Learned Departmental Representative did not raised any objections. Therefore, in view of the fact that we have adjudicated ITA No.413/Mum/2025 hereinabove, and taking into consideration the statement made by the Learned Authorised Representative for the Assessee, the present appeal is dismissed as being a duplicate appeal.
11. In conclusion, ITA No.413/Mum/2025 is allowed for statistical purposes and ITA No.373/Mum/2025 is dismissed.
Order pronounced on 12.03.2025.
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