Pragati Magaswargiya Mahila Sanstha Vs CIT (Exemption) (ITAT Nagpur)
Nagpur ITAT: Bona Fide Error in Selecting Wrong Clause in Form 10AB Cannot Defeat 80G Approval – CIT(E) Directed to Permit Fresh Application
In Pragati Magaswargiya Mahila Sanstha v. CIT(E), the Nagpur ITAT considered whether regular approval under section 80G(5) could be rejected merely because the assessee inadvertently selected the wrong clause while filing Form 10AB. The charitable institution, engaged in healthcare and social-welfare activities, already held provisional approval and filed Form 10AB for regular approval. However, it mistakenly selected clause (ii) instead of the appropriate clause (iv)(B) of the first proviso to section 80G(5).
The CIT(E) rejected the application as non-maintainable, since clause (ii) applied to institutions already enjoying regular approval, whereas the assessee possessed only provisional approval. The assessee explained that the error occurred while selecting the option from the drop-down menu on the e-filing portal and was merely technical and inadvertent.
The ITAT observed that the application had been rejected solely because of the incorrect clause selected electronically. Significantly, the CIT(E) had recorded no adverse finding regarding the genuineness of the assessee’s activities, charitable nature of its objects or its substantive eligibility for 80G approval. The Tribunal held that such a bona fide and technical procedural lapse should not, by itself, deny the assessee an opportunity to obtain regular approval.
