Case Law Details
Sunrise Education Trust Vs CIT (Exemption) (ITAT Ahmedabad)
The appeal was filed against the order of the Commissioner of Income Tax (Exemption), Ahmedabad, dated 17.01.2026 rejecting the assessee-trust’s application for final/regular registration under Section 12A of the Income Tax Act.
The assessee had initially obtained provisional registration under Section 12A and subsequently applied for regular/final registration. However, while filing the prescribed form, the assessee inadvertently selected Section 12A(1)(ac)(ii) instead of Section 12A(1)(ac)(iii). The CIT(E) rejected the application solely on the ground that his office could not suo motu change the clause under which the application had been filed.
The Tribunal observed that following amendments effective from 01.04.2021, there had been considerable confusion regarding the interpretation of the relevant provisions. It noted that even the CBDT had issued clarifications from time to time and that application deadlines had been extended due to such confusion. The Tribunal further observed that coordinate benches had consistently held that assessees should not be penalized for bona fide mistakes in mentioning the relevant clause in application forms.
The Tribunal found that all relevant facts were before the CIT(E) and that the assessee was otherwise eligible for consideration of final registration. Accordingly, it set aside the impugned order and restored the matter to the CIT(E), directing him to treat the application as one filed under Section 12A(1)(ac)(iii) and decide it afresh on merits. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Exemption), (hereinafter referred to as “CIT(E)”), Ahmedabad dated 17.01.2026 rejecting the application of the assessee for final/regular registration u/s 12A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
2. In this case, the assessee applied for provisional registration u/s. 12A of the Act, which was granted to the assessee-trust. The assessee, thereafter, applied for regular/final registration to the Ld. CIT(E). However, the assessee inadvertently mentioned/ticked the clause as 12A(1)(ac)(ii) instead of clause (iii) in the prescribed form. Merely, on this ground, the Ld. CIT(E) rejected the application of the assessee observing that his office suo moto cannot change the clause under which the application has to be made.
3. It is observed here that after the amendment to the relevant provisions w.e.f. 01.04.2021, there were many misunderstandings and confusions about the correct interpretation of the same, not only among the assessees/Income Tax professionals, but also with the Income Tax Authorities. Even the CBDT had to issue circulars and clarifications regarding correct interpretation of the relevant provisions from time to time. Even the time/limitation for making the applications has also been extended from time to time taking note of such confusions in properly understanding relevant provisions. The Co-ordinate Benches of the Tribunal have held time and again that due to the complex provisions and even there being certain discrepancies in prescribed forms for issuing certificates, the assessees should not be punished for any mistake in mentioning the relevant clause in the application form. In the case in hand, the entire facts were before the Ld. CIT(E) and he was very much aware that the case of the assessee was otherwise eligible for granting final/regular registration, however, he found himself helpless only because the assessee had not mentioned correct clause. It has been held time and again that the litigants should not be punished for their bona fide The impugned order of the Ld. CIT(E) is set aside and the matter is restored to the file of the CIT(E).
It is directed that the Ld. CIT(E) will treat the application moved by the assessee under the relevant clauses 12A(1)(ac)(iii), irrespective of the clause mentioned by the assessee in the application form and will decide the application of the assessee afresh on merits in accordance with law.
4. With the above observations, the appeal of the assessee is treated as allowed for statistical purposes.
This Order pronounced on 21/05/2026
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