Case Law Details
Arya Samaj Safdarjung Enclave Vs CIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi, in the case of Arya Samaj Safdarjung Enclave Vs CIT, has provided a significant verdict. The tribunal, recognizing the inadvertent error of wrong form selection during an application for 12A(1)(ac) registration, allowed for a re-application in its ruling dated 13/06/2023.
This verdict stands out as the ITAT has shown flexibility by allowing the assessee to rectify an inadvertent mistake. The assessee had initially chosen the wrong form (Form 10AB) while applying for registration under section 12A(1)(ac) of the Income Tax Act, which led to rejection by CIT(E). The ITAT, on understanding the bonafide mistake, granted permission for the submission of the correct form (Form 10A) within a stipulated time of 30 days.
This ruling emphasizes the focus on the intention behind the submission and the genuineness of the organization’s activities rather than penalizing for a procedural error. This not only helps the organization involved in this particular case but also sets a precedent for similar cases in the future.
This significant ruling by ITAT Delhi brings about a more understanding and accommodating approach in dealing with unintentional mistakes in tax registration applications. It proves that the focus lies on the transparency and sincerity of the applicant organization rather than on an unintentional procedural error. As a result, this decision might influence similar future cases by providing a degree of flexibility and tolerance in tax registration procedures.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the assessee against the order dated 30/09/2022 passed by the Income Tax Department, CIT (Exemption)- Delhi, (hereinafter referred to ‘CIT(E)’ for Assessment Year NIL.
2. The assessee has raised the following Concise grounds of appeal:-
“1. The order u/s 12AB(1)(b)(ii)(B) of the Income-tax Act, 1961 passed by the Ld. CIT(Exm.), Delhi rejecting the application filed u/s 12A(1)(ac) is arbitrary and unjust as the same is passed without properly appreciating the documents submissions e-filed in proceedings and also physically before his office on 22.09.2022.
2. The Ld CIT(Exm.) has erred in not considering the fact that the appellant is a registered society u/s 12A(a) and eligible for automatic re-registration for five years u/s 12AB(1)(a) r. w.s. 12A(1)(ac)(1) of the Act, while arbitrary rejecting the application
3. The Ld. CIT(Exm.) has failed to appreciate the request of the appellant to rectify the bonafide defect/mistake occurred during e-filing application Form which corrected by filing duly signed Form 1 0A along with rectification and condonation request in proceedings before him.
4. The Ld CIT(Exm.) has rejected the application arbitrary despite the fact that the dual conditions provide in section 12AB(1)(b)(1) of the Act, (A) the genuineness of activities of the society and (B) the compliance of such requirements of any other law for the time being in force and material for the purpose achieving its object, were fulfilled for his satisfaction, even for passing the order u/s 12AB(1)(b) of the Act.
5. The Ld CIT(Exm.) has completely brushed aside and disregarded the material evidence placed on record of the proceedings and fact that the appellant was genuinely conducting its activities strictly in accordance with its objects from last number of years and duly complied with all the necessary requirements of any other law and already registered u/s 12A(a), filing ITR regularly. Therefore appellant deserves for grant of re- registration u/s 12AB(1)(a) of the Actforfive years.
6. That in any view of the facts and circumstances of the case and law the appellant is entitled for grant of re-registration u/s 12AB(1)(a) r. w.s. 12A(1)(ac)(i) of the Act, which be kindly granted in the interest of natural justice.
7. The appellant craves leave to add, amend, alter, remove, rescind, forgo or withdraw any of the above grounds of appeal which are without prejudice to one another before or at the time of hearing of the appeal in the interest of natural justice.”
3. Brief facts of the case are that, the assessee e-filed an application for registration u/s 12A(1) (ac) of the Income Tax Act, (‘Act’ for short), but while selecting the Form 10A, the assessee wrongly selected Form 10AB. The CIT(E) while considering the application filed by the assessee u/s 12A(1)(a) of the Act, rejected the same for wrongly uploading the Form vide order dated 30/09/2022. Aggrieved by the order dated 30/09/2022, the assessee is before us by way of appeal on the grounds mentioned above.
4. The Ld. Counsel for the assessee filed written submission in detail and submitted that the assessee inadvertently clicked and selected Form No. 10AB instead of Form No. 10A which resulted in rejection of the Application. The Assessee is legally entitled for re-registration as per the provision of Section 12A(1)(ac) of the Act. Thus, Ld. Assessee‘s Representative submitted that the matter may be remanded to the file of CIT(E) Delhi to consider the case of the assessee de-novo
5. The Ld. Departmental Representative submitted that though the uploading of Form 1OAB instead of 1OA is an error of the Assessee, the same cannot be rectified by the CIT(E), therefore, justified the action of the CIT(E) in rejecting the application filed u/s 12A(1)(ac) of the Act.
6. We have heard the parties and perused the material available on record. It is not in dispute that the assessee had submitted an online application on 24/03/2022 for registration u/s 12A(1)(ac) of the Act, but due to inadvertent mistake of the Assessee selected Form 10B instead except of Form 10A which ultimately resulted in rejection of the Application by the CIT(E). Further it is also found that the assessee had filed signed Form 10A along with the submission dated 22/09/2022 wherein submitted that it was a bonafide mistake on the part of the assessee in selecting of Form 10AB instead of Form 10A and requested to accept the Form 10A.
7. By considering the above facts and circumstances we deem it fit to condone the delay and permit the assessee to file a fresh Form 1oA within a period of 30 days from the date of receipt of these order and if such Form 10A is field, the CIT(E) shall consider the same on merit and decide application filed u/s 12A(1)(ac) in accordance with law without raising the issue of limitation.
8. In the result, the Appeal of the assessee is partly allowed for statistical purpose
Order pronounced in the open court on: 13/06/2023.
