Jidnyasa Prabodhan Trust Vs CIT (ITAT Pune)
Summary: Jidnyasa Prabodhan Trust filed Form No. 10AB on 26.09.2025 seeking regular approval u/s 80G(5) of the Income-tax Act.
While making the online application, the Trust selected an incorrect statutory clause or sub-clause. The CIT (Exemption) found that the application did not conform to the clause applicable to the Trust’s case. The Trust was also stated not to have furnished a copy of the relevant regular approval in Form No. 10AC under the provision referred to in the application.
Treating the application as technically defective, the CIT (Exemption) rejected it by order dated 26.03.2026. The eligibility of the Trust for approval u/s 80G(5) was consequently not examined on merits.
Aggrieved by this rejection, the Trust approached the Pune Tribunal.
A Wrong Clause, Not a Wrong Claim
The Trust argued that the application had been rejected only because of an inadvertent error in selecting the applicable statutory sub-clause in Form 10AB.
According to the Trust, this was a procedural mistake, not a substantive defect affecting its eligibility for approval. The particulars necessary for considering the application were otherwise available. Merely clicking the wrong section code on the electronic portal should not result in rejection of the entire application or loss of the benefit otherwise available under the Act.
The Trust therefore requested that it be permitted to correct the incorrect clause & that its application be examined afresh on merits. Reliance was placed on several Tribunal decisions holding that an applicant should not be deprived of registration or approval merely because of an inadvertent mistake in the prescribed electronic form.
The Revenue supported the CIT (Exemption)’s order.
Tribunal Relies on the Surat Bench
The Pune ITAT found that an identical procedural controversy had been considered by the Surat Bench in Shree Swaminarayan Gadi Trust Vadtal (SVG) v. CIT (Exemptions), Ahmedabad, ITA Nos. 369 & 370/Srt/2024, order dated 13.05.2024.
In that case, the trust had applied for registration u/ss 12A/12AB in Form 10AB but selected an incorrect clause. During the proceedings, the trust explained the error & requested that its application be treated as having been filed under the appropriate provision.
The CIT (Exemption) declined the request on the ground that he had no power to alter, amend or rectify the electronic Form 10AB. The Surat Bench held that the mistake in selecting the statutory entry was not fatal. Since the trust had furnished the relevant particulars, its application could be considered under the correct provision.
The Tribunal had directed the concerned officials maintaining the ITBA portal either to correct the error themselves or permit the applicant to rectify the relevant clause. As the application had not been examined on merits, the matter was restored to the CIT (Exemption) for fresh adjudication after granting a reasonable opportunity of hearing.
Procedure Must Serve the Claim
Applying the same principle, the Pune ITAT observed that the CIT (Exemption) was aware that the Trust had commenced its activities. Once the nature of the application & the stage at which regular approval was required were apparent, the applicable statutory provision could be identified.
The wrong selection of a clause in the electronic application was, therefore, merely a procedural defect. It did not destroy the underlying application or disentitle the Trust from seeking regular approval.
The ITAT emphasised that an inadvertent selection of an incorrect section code cannot be treated as fatal to proceedings validly initiated by filing Form 10AB. The applicant should ordinarily be given an opportunity to correct the mistake, particularly where the authority is capable of understanding the actual relief sought.
Rejecting the application outright converted a curable portal error into a substantive denial of statutory consideration. Such an approach was inconsistent with natural justice.
Opportunity to File Correct Application
The Tribunal clarified that it was not itself granting approval u/s 80G(5). The Trust’s substantive eligibility still had to be verified by the CIT (Exemption).
Accordingly, the rejection order was set aside & the matter was restored to the CIT (Exemption). The Trust was to be permitted to file the correct application or rectify the incorrect clause. Thereafter, the application was to be examined de novo on merits, after providing the Trust a reasonable opportunity of hearing.
The Tribunal also cautioned the Trust to remain vigilant, comply satisfactorily with notices issued by the CIT (Exemption) & avoid seeking adjournments unless supported by reasonable cause.
The appeal was accordingly allowed for statistical purposes.
Author’s Comments
The ruling is another useful reminder that tax administration cannot become a test of portal perfection. Electronic forms contain multiple clauses which often look similar but carry different procedural consequences. A genuine applicant may select an incorrect provision even though the nature of the approval sought is otherwise clear.
There is a material distinction between a defective claim & a defective form. If the applicant is substantively ineligible, approval can certainly be refused by a reasoned order. But where the defect consists only of selecting the wrong clause, fairness requires an opportunity to correct it.
The principle assumes greater significance because an outright rejection may expose a charitable institution to limitation problems. By the time the mistake is discovered, the statutory window for filing a fresh application may have expired. A simple clerical error can then acquire disproportionately harsh tax consequences.
The Tribunal’s ruling does not dilute compliance requirements. The Trust must still file the correct application, furnish the required documents, establish the genuineness of its activities & satisfy all conditions prescribed u/s 80G(5). It only ensures that eligibility is decided on substance rather than a misplaced electronic tick.
A wrong box may invite correction; it should not, by itself, close the door to charitable approval.
Cases Discussed
- Shree Swaminarayan Gadi Trust Vadtal (SVG) v. CIT (Exemptions), Ahmedabad, ITA Nos. 369 & 370/Srt/2024, dated 13.05.2024
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee is directed against the order dated 26.03.2026 framed by ld.CIT (Exemption), Pune rejecting the application for approval u/s.80G(5) of the Income Tax Act, 1961 (in short ‘the Act’).
2. Brief facts as emanating from the record are that the appellant is a trust which filed application on Form No.10AB for grant of regular approval u/s/80G(5)(ii) of the Act on 26.09.2025. Ld.CIT(A) rejected the application on the ground that assessee has not furnished the copy of regular approval on Form No.10AC u/s.80G(5)(vi) read with clause (i) or clause (iii) of first proviso to section 80G(5)(vi) r.w.clause (iv) of first proviso of the Act. Being aggrieved, the appellant has approached this Tribunal challenging the impugned order.
3. Before us, Ld. Counsel for the assessee submitted that the application for regular approval is rejected due to the technical error of wrong selection of sub-section which does not stand the reason to reject the application and cancellation of provisional registration. He submitted that selection of wrong sub-clause should not be detrimental and therefore the appellant may be given an opportunity to correct the inadvertent mistake. Ld. Counsel also gave reference to plethora of decisions passed on this very same issue.
4. Ld. DR supported the order of ld. CIT(Exemption).
5. We have heard the rival submissions and perused the relevant material on record placed before us. Appellant is aggrieved by the rejection of application for grant of regular approval u/s.80G(5) of the Act for selection of wrong sub-clause.
6. We note that similar issue came up for adjudication before the Coordinate Bench, Surat in the case of Shree Swaminarayan Gadi Trust Vadtal (SVG) Vs. CIT (Exemptions), Ahmedabad in ITA Nos. 369 & 370/Srt/2024, dated 13.05.2024 wherein the Tribunal set-aside the order of ld.CIT(Exemption) observing as under :
“5. We have considered the submissions of both the parties and perused the record carefully. There is no dispute that the appellant applied for registrationunder Section 12A/12AB of the Act under Form 10AB on 28.09.2023. The ld. CIT(E) while considering the application of appellant noted that the application filed by appellant is not maintainable and accordingly, a show cause notice dated 02/11/2023 was issued for seeking clarification. The appellant responded to the show cause notice of ld CIT(E) vide their reply dated 15.12.2023. The contents of show cause notice and the reply thereof is not recorded by ld CIT(E) in his order. We find that the appellant vide their reply dated 15/12/2023 prayed to consider the application in appropriate sub-clause of section 12A(1). The ld CIT(E) held that he has no power to change/ amend or rectify Form-10AB. We find that it was an inadvertent mistake and the appellant has already explained the facts and prayed for correction before theld. CIT(E). In our view the mistake in filing entry was not fatal and could be considered in appropriate sub-clause or clause of section 12A(1). Otherwise, the appellant has provided all the details and information in Form-10AB, while applying for registration under section 12A/12AB. Being first appellate authority, the plea of appellant for correction in Form-10AB is accepted and the order of ld CIT(E) is set-aside. The registry official of ld CIT(E) maintaining record of ITBA portal about the registration of trust under section 12A/12AB is directed either to correct such mistake or allow the appellant to rectify or amend the relevant clause/ sub-clause of section 12A(1). Considering the fact that the application of appellant was not considered on merit, therefore, we deem it appropriate to direct the ld. CIT(E) to treat the application of appellant under Section 12A(1)(ac)(iii) in place of Section 12A(1)(ac)(iv) of theAct and to consider the case on merit and pass the order in accordance with law. Needless to direct that before passing the order, the ld CIT(E) shall grant opportunity of hearing to the appellant. The appellant is also directed to furnish complete details to prove its object and activity and make all compliances as desired by the ld. CIT(E). In the result, the grounds of appeal raised by the appellant are allowed for statistical purposes only.”
7. Once the ld.CIT(Exemption) acknowledges commencement of activities, the correct statutory provision governing regular registration stands identified, the error in clause is a mere procedural defect, we are of the considered view that the assessee‟s application cannot be rejected on the ground of an inadvertent clause selection. In light of the above decision and having given our thoughtful consideration to the given facts and circumstances prevailing in the instant case, we are of the opinion that the ld.CIT(Exemption) ought to have given an opportunity to the appellant to rectify the defect. Further we are of the view that wrong selection of section code/clause would not disentitle the appellant to its rightful claim. Selection of wrong clause by the appellant cannot be treated as fatal to the proceedings initiated after the filing of the application. We therefore in the interest of natural justice and being fair to both the parties deem it appropriate to grant one more opportunity to the appellant, setting aside the impugned order to the file of ld.CIT(Exemption). The ld.CIT(Exemption) shall give an opportunity to the appellant to file the correct application and then decide the case on merits denovo after granting reasonable opportunity to the appellant. Appellant is also directed to remain vigilant and make satisfactory compliance to the notice(s) of hearing issued by ld.CIT(Exemption). It should refrain from taking adjournments unless otherwise required for reasonable cause. Effective grounds of appeal raised by the appellant are allowed for statistical purposes.
8. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 02nd day of September, 2026.
