Akhil Bhartiya Adhivakta Parishad Vs CIT (Exemption) (ITAT Delhi)
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Exemption), Delhi dated 27.08.2024 rejecting its application for approval under Section 80G of the Income Tax Act, 1961. The assessee, a non-profit society, had filed an application in Form No. 10AB on 26.02.2024 seeking approval under Section 80G(5). During the proceedings, the Commissioner issued notices calling for information and, after examining the application, observed that the assessee had filed the application under sub-clause (B) of clause (iv) of the first proviso to Section 80G(5), which was not applicable to its case. Although the assessee submitted replies and information, the Commissioner rejected the application on that ground without examining the merits of the claim or verifying the activities of the society.
Before the Tribunal, the assessee contended that the rejection was based solely on a technical error, namely the inadvertent filing of the application under the wrong provision. It was submitted that there was no deliberate or wilful intention to file under an incorrect clause and that the matter should be restored to the Commissioner with a direction to treat the original application as one filed under clause (iii) of the first proviso to Section 80G(5). The Revenue supported the order of the Commissioner.
The Tribunal found that the application had been filed in Form No. 10AB under sub-clause (B) of clause (iv) of the first proviso to Section 80G(5) instead of clause (iii) due to an inadvertent error. It observed that the Commissioner had rejected the application in limine without recording any adverse findings on the merits of the assessee’s eligibility for approval.
The Tribunal referred to the decision of the co-ordinate Bench in Nitdaa Foundation vs. CIT, which held that incorrect mention of the applicable clause in the prescribed form constituted a curable defect and that the application should be treated as having been filed under the correct provision. The Tribunal also referred to CBDT Circular No. 7/2024 dated 25.04.2024, which states that where an application is furnished under the wrong section or in the wrong form, a fresh application may be furnished in the correct form within the extended time provided by the circular.
Following the co-ordinate Bench decision and considering the CBDT Circular, the Tribunal held that the issue of mentioning the wrong section was a common and curable error. Since the Commissioner had not examined the material submitted by the assessee on merits, the Tribunal set aside the impugned order and remanded the matter to the Commissioner of Income Tax (Exemption), Delhi. The Commissioner was directed to treat the assessee’s application as one filed under clause (iii) of the first proviso to Section 80G(5), examine the documents and details submitted, and decide the request for approval under Section 80G(5) in accordance with law after providing a reasonable opportunity of hearing.
The Tribunal further directed the assessee to comply with all notices issued by the Commissioner and to produce the requisite information and documents in support of its claim for registration under Section 80G. It observed that in the event of non-compliance, the Commissioner would be at liberty to pass an appropriate order in accordance with law.
Accordingly, the Tribunal partly allowed the grounds of appeal and treated the appeal as allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the assessee against the order of the passed by Ld. CIT (Exemption), Delhi dated 27.08.2024 rejecting the application for approval u/s 80G of the Income Tax Act, 1961 (the Act, in short).
2. The appellant has taken following grounds of appeal:-
“1. Ld. CIT Exemption erred in ignoring the circular issued by Central Board of Direct Taxes and proceed to reject the application of the appellant.
2. Without prejudice, Ld. CIT Exemption ignored plethora of judgement in which it is duly held that Application of assessee cannot be rejected on technical ground for delayed filing.
3. CIT Exemptions erred in not deciding the issue on merits despite noting that the Assessee had submitted the requisite information.
4. Appellant may raise an additional ground of appeal or modify the ground of appeal before the hearing.”
3. Facts of the case, in brief, are that the assessee is a non-profit society and has filed application in Form No.10AB under sub-clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Act on 26.02.2024 for granting registration u/s 80G(5) of the Act. Thereafter Ld. CIT, Exemption, Delhi issued a notice on 20.03.2024 asking the assessee to file information/clarification to support its claim for seeking approval under sub-clause (B) of (iv) of first proviso to sub-section (5) of section 80G. In reply, the assessee filed part reply. After verifying the submission, ld. CIT, Exemption, Delhi found that the appellant society was created on 04.05.2001 thus he specifically asked the assessee that vide application filed in Form 10AB appellant is seeking approval u/s 80G(5)(iv)(B) of the Act but the same is not applicable to the case of the appellant and, therefore, he proposed to reject the application so filed. The assessee again responded to the above notice and furnished reply on 02.08.2024. However, ld. CIT Exemption, Delhi without appreciating the merits of the application and also without examining/ verifying the activity of the assessee vis-à-vis details filed, rejected the application for registration u/s 80G(5) of the Act. Against this order of rejection, present appeal is filed by the assessee before this Tribunal.
4. Before us, ld. AR submitted that the application of the assessee for registration u/s 80G(5) was rejected solely on technical ground by observing that the said application was filed under wrong section and no observations was on merits of the case. It was submitted by ld. AR that merely filing application under wrong section is an inadvertent error and there was no deliberate/willful intention to submit the application under wrong section thus the same should be considered liberally. Accordingly, Ld. AR requested that the matter may be set-aside to the file of Ld. CIT, Exemption, Delhi and further requested to direct him to treat the original application as filed under clause (iii) of first proviso to sub-section (5) of section 80G of the IT Act.
5. On the other hand, ld. DR vehemently supported the orders passed by the CIT, Exemption Delhi and requested to confirm the same.
6. We have heard the rival submissions and perused the material available on record. We find that due an inadvertent error, the application for registration u/s 80G(5) was filed in form 10AB under sub-clause (B) of (iv) of first proviso to sub-section (5) of section 80G instead of under clause (iii) of first provision to sub-section (5) of section 80G of the Act. The ld.CIT(A) dismissed the application of the appellant in limne without giving any adverse findings on merits. Under similar circumstances, co-ordinate Bench of ITAT, Kolkatta in the case of Nitdaa Foundation vs. CIT reported in 167 com 111 while allowing the appeal of the assessee observed as under :-
“12. Thus, the whole controversy arose due to incorrect mention of the clause under which the application was required to be filed, which was mentioned as clause (iv) of the first proviso to sub-section (5) of section 80G in column 6 of Form No. 10AC whereas the same should have been mentioned as clause (i) of the first proviso to subsection (5) of section 80G and the Ld. AR also admitted this fact in the course of the hearing. Since, Form No. 10AC was filed in time, the error on the part of the assessee for mentioning the wrong clause is deemed to be a curable defect and the application on Form No. 10AC is deemed to be filed under clause (i) of the first proviso to subsection (5) of section 80G. The order of the Ld. CIT(Exemption) is hereby set aside and he is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) of the Act and consider the same for grant of approval under section 80G(5) to the trust in accordance with law within a period of 2 months from the date of receipt of this order. The assessee shall file all necessary evidence before him.”
7. Further, CBDT in recent Circular No.7/2024 on 25.04.2024 vide para 4.1 provided that if the application was furnished under the wrong section or in wrong Frum than it may furnish a fresh application in correct form within the extended time provided in the circular. Thus by respectfully following the decision of co-ordinate bench in the case of Nitdaa Foundation (supra) and considering the CBDT circular No. 7/2024 (supra) wherein the issue of mentioning wrong section is considered as a common 86 frequent error and further looking to the fact that Ld. CIT, Exemption, Delhi has not examined the details filed by the appellant on merits of the case, we deem it fit to set-aside the order passed by Ld. CIT, Exemption, Delhi and remand the matter back to him with the direction to treat the application of the assessee as filed under clause (iii) of first proviso to sub-section (5) of section 80G and examine the details filed by the assessee for grant of approval u/s 80G(5) of the Act in accordance with law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by Ld. CIT, Exemption, Delhi in this regard and produce requisite information/documents in support of registration u/s 80G of the IT Act, otherwise Ld. CIT, Exemption, Delhi shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee in this appeal are partly allowed.
8. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in open court on 19/02/2025.
