Vir Savarkar Shishan & Seva Sanshtha Vs CIT (ITAT Ahmedabad)
Ahmedabad ITAT Restores Section 12AB and 80G Applications Rejected Due to Selection of Wrong Provision Without Opportunity of Hearing
Summary: The assessee filed two appeals against separate orders of the Commissioner of Income-Tax (Exemption), Ahmedabad [CIT(E)], rejecting its applications for registration under Section 12A/12AB and approval under Section 80G of the Income Tax Act, 1961.
In ITA No.369/AHD/2026, the application in Form No.10AB under Section 12A(1)(ac) was rejected because the assessee had selected Section 12A(1)(ac)(ii), whereas it contended that the application was intended to be filed under Section 12A(1)(ac)(iii). The assessee submitted that the incorrect provision was selected inadvertently while electronically filing the prescribed form and that it was not given notice of the defect or an opportunity of being heard. The Ahmedabad ITAT considered the rival submissions and held that, in the circumstances, the assessee should be granted another opportunity. It therefore set aside the CIT(E)’s order and restored the application to its original number, directing the CIT(E) either to treat it as an application under Section 12A(1)(ac)(iii) or permit the assessee to file a rectified application. The CIT(E) was left at liberty to decide the application on merits as per law after providing an opportunity to make submissions and furnish documents/details. The assessee’s rights and contentions were left open.
In ITA No.370/AHD/2026, the assessee challenged rejection of its application for approval under Section 80G(5). Since that rejection was based on the rejection of the Section 12A(1)(ac) application, the Tribunal held that the basis of the Section 80G rejection no longer survived. It therefore set aside the order and restored the Section 80G(5) application to the CIT(E) for fresh adjudication after considering the outcome of the Section 12A(1)(ac)(iii) proceedings and the relevant documents, details and submissions, with a reasonable opportunity of being heard.
Both appeals were consequently allowed for statistical purposes, without any finding on the merits of the registration or approval applications. The order was pronounced on 21.08.2026.
The assessee’s Form 10AB application for registration was rejected because it had inadvertently selected Section 12A(1)(ac)(ii), applicable to entities seeking renewal of regular registration, instead of the intended provision under Section 12A(1)(ac)(iii). The CIT(E) rejected the application on this technical ground without issuing a notice or providing the assessee an opportunity to rectify or explain the mistake.
The Ahmedabad ITAT held that the assessee should have been confronted with the defect and granted an opportunity to clarify the inadvertent error. In the interest of justice, the Tribunal set aside the rejection and restored the application to its original number.
The CIT(E) was directed either to:
- Treat the existing application as one filed under Section 12A(1)(ac)(iii); or
- Permit the assessee to file a rectified application.
The CIT(E) was granted liberty to decide the application afresh on merits after providing a reasonable opportunity of hearing.
Since the assessee’s Section 80G(5) application had been rejected solely because its Section 12AB application was rejected, that order was also set aside. The Section 80G application was restored for fresh adjudication based on the outcome of the Section 12AB proceedings.
Both appeals were allowed for statistical purposes, without any finding on the merits of the registration or approval.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
1. These are two appeals filed by the same Assessee against two separate Orders passed by the Commissioner of Income-Tax (Exemption), Ahmedabad [hereinafter referred to as the ‘CIT(E)’] denying registration under Section 12A/12AB and the approval under Section 80G of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’].
ITA No.369/AHD/2026
2. We would first take up ITA No.369/AHD/2026 preferred by the Assessee challenging Order, dated 16/01/2026, passed by Learned CIT(E) whereby the application filed by the Assessee in Form No.10AB under Section 12A(1)(ac) of the Act was rejected. The Assessee has raised 2 Grounds of appeal challenging the aforesaid rejection order.
3. When the appeal was taken up for hearing the Learned Authorised Representative for the Assessee prayed for setting-aside of the impugned order and contended that the application filed by the Assessee was dismissed on account of technical defect without examining the merits. The Learned Authorised Representative for the Assessee submitted the aforesaid application was rejected on the ground that the same filed under wrong provision [i.e. Section 12A(1)(ac)(ii)] applicable to charitable organization already holding regular registration and seeking renewal of the same. The grievance of the Assessee is that the Assessee was not put to notice about the defect in the application and the order rejecting application was passed without giving any opportunity of being heard to the Assessee.
4. Per Contra, Learned Departmental Representative supported the order passed by the Learned CIT(E) contending that the application was filed by the Assessee under incorrect provision and therefore, there was no infirmity in the rejection order passed by the Learned CIT(E).
5. We have considered the rival submission, perused the material on record and examined the position in law.
6. It is the case of the Assessee that the application was intended to be made under Section 12A(1)(ac)(iii) of the Act. However, inadvertently, the application was filed under incorrect provision [Section 12A(1)(ac)(ii)] by selection incorrect option while filling the relevant form electronically. Since the Assessee was not confronted with defect in the application, the Assessee was not able to explain before the Learned CIT(E) that the aforesaid inadvertent mistake had occurred while filing the application in the prescribed form. We note that no notice of hearing was issued to the Assessee. Taking into consideration overall facts and circumstances of the present case, we deem it appropriate and in the interest of justice to grant another opportunity to the Assessee to make out a case for renewal of registration in terms of Section 12A(1)(ac)(iii) of the Act. Accordingly, we set aside the impugned order passed by the Learned CIT(E) and restore the application filed by the Assessee to its original number. The Learned CIT(E) is directed to either treat the application filed by the Assessee as application filed under Section 12A(1)(ac)(iii) of the Act or grant opportunity to the Assessee to file rectified application. It is clarified that the Learned CIT(E) would be at liberty to decide upon the merits of the application as per law after granting the Assessee an opportunity to make submission and file documents/details in support of the said application. All rights and contentions of the Assessee are left open. In terms of the aforesaid, all the grounds raised by the Assessee are allowed for statistical purposes.
7. In terms of paragraph above, the appeal preferred by the Assessee is allowed for statistical purposes.
ITA No. 370/AHD/2026
8. We would next take up ITA No.370/AHD/2026 preferred by the Assessee challenging the Order, dated 27/01/2026, passed by Learned CIT(E) whereby the application filed by the Assessee seeking approval under Section 80G(5) of the Act was rejected.
9. We have heard both the sides and have perused the material on record. It is apparent that the application filed by the Assessee for seeking approval under Section 80G(5) of the Act was dismissed by the Learned CIT(E) as the application for registration under Section 12A(1)(ac) of the Act was rejected by the Learned CIT(E). We have, hereinabove, set aside the aforesaid order passed by the Learned CIT(E) and have restored the application back to the file of the Learned CIT(E) for adjudication afresh. Therefore, the basis on which the application filed by the Assessee for approval under Section 80G(5) of the Act was passed does not survive.
10. In view of the above, we set aside the impugned order passed by Learned CIT(E) and restore the application filed by the Assessee seeking approval under Section 80G(5) of the Act back to the file of the Learned CIT(E) with the directions to adjudicate the said application afresh (a) after taking into consideration the adjudication of application filed by the Assessee for registration under Section 12A(1)(ac)(iii) of the Act as well as the relevant documents/details/submission filed by the Assessee in support of application seeking registration under Section 80G(5) of the Act. It is clarified that the Assessee would be granted a reasonable opportunity of being heard.
11. In terms of above, all the grounds raised by the Assessee are allowed for statistical purposes without returning any finding on merits.
12. In result, the present appeal (ITA No.370/AHD/2026) preferred by the Assessee is allowed for statistical purposes.
13. In conclusion, both the appeals preferred by the Assessee are allowed for statistical purposes.
The order is pronounced on 21.08.2026
