Dattabal Mission Devine Vs CIT (ITAT Pune)
Pune ITAT Holds Wrong Selection of Section in Form 10AB Is a Curable Technical Defect; Trust Gets Fresh Opportunity for 12A and 80G Registration
The Pune ITAT held that an inadvertent selection of the wrong sub-clause in Form 10AB while applying for regular registration under section 12A is merely a technical and curable defect and cannot be the sole basis for rejecting the application. The Tribunal observed that the trust, formed for imparting education, had mistakenly applied under an incorrect provision, leading the CIT (Exemptions) to reject the application on the ground that the chosen sub-clause was inapplicable. Relying on the co-ordinate bench decision in Shree Swaminarayan Gadi Trust Vadtal, the Tribunal held that selection of an incorrect section code does not disentitle an applicant from its substantive claim, and the CIT(E) ought to have afforded an opportunity to rectify the defect instead of rejecting the application outright. Accordingly, the Tribunal set aside the impugned order and restored the matter to the file of the CIT (Exemptions) with directions to permit the assessee to file the correct application, examine the case afresh on merits, and pass a fresh order after granting adequate opportunity of hearing. Since the denial of approval under section 80G(5) was consequential to the rejection of registration under section 12A, that issue was also remanded for fresh adjudication.
FULL TEXT OF THE ORDER OF ITAT PUNE
These two appeals at the instance of assessee are directed against the orders passed by ld. CIT (Exemption), Pune dated 20.12.2025 denying the applications for grant of regular registration and approval u/s.12A(1)(ac)(vi)-ITEM(B) and approval u/s.80G(5) of the Income Tax Act, 1961 (in short ‘the Act’).
2. Grievance of the assessee is that ld.CIT(Exemptions) erred in rejecting applications for regular registration u/s.12A and approval u/s.80G(5) of the Act.
3. We first take up ITA No.715/PUN/2026. Facts of the case are that the appellant is a trust formed with the object of imparting Education. The appellant trust filed application on Form No.10AB u/s. 12A(1)(ac)(vi) ITEM (B) for grant of regular registration of the Act on 12.04.2025. Provisional registration granted to the appellant on 16.12.2023. In order to verify the genuineness of activities of the appellant trust, the ld. CIT (Exemption) issued a notice dt. 09.07.2025 through ITBA portal calling upon the appellant trust to file certain information/clarification. Appellant furnished the requisite details. Thereafter, ld.CIT(E) issued another notice dated 08.09.2025 pointing out certain discrepancies in the details so filed to which appellant furnished compliance on 16.10.2025. However, ld.CIT (Exemption) not satisfied with the submissions of the appellant and rejected the application for grant of regular registration by holding as under :
“8. It can be thus seen that the provisions of said section applies to a case where activities of the trust or institution have ‘commenced and no income or part thereof of the said trust or institution has been excluded from the total income on account of applicability of sub-clause (iv) or subclause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or section 12, for any previous year ending on or before the date of such application, at any time after the commencement of such activities. In the light of said provision, the submission of the assessee trust has been verified. It is seen that the assessee trust has claimed deduction u/s 11 in its past AYs. Thus, the assessee’s income pertaining to previous years has been excluded from the total income on account of applicability of section 11 which occurs after the commencement of such activities.
9. Therefore, said provisions of sec. 12A(1)(ac) (vi) (B) of the Act are not applicable in the assessee’s case. Thus, the undersigned is not satisfied about the fulfillment of conditions laid down in the section 12A(1)(ac)(vi)(B) of the Act and hence, the undersigned is left with no alternative but to reject the application. Considering the above facts discussed in the show notice and discrepancies noticed, the undersigned is not satisfied about the genuineness of compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.
3.1 Being aggrieved, the appellant trust has approached this Tribunal assailing the impugned order.
4. Before us, Ld. Counsel for the assessee submitted that the application for regular registration is rejected due to the technical error of selecting incorrect sub-clause. Selection of wrong sub-clause should not prove fatal and the appellant and 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.
5. Ld. DR supported the order of ld. CIT(Exemption).
6. 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 registration u/s.12A of the Act for selection of wrong sub-clause.
7. So far as selection of wrong section in the application filed for regular registration u/s.12A of the Act, we note that similar issue came up for adjudication before 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 and the finding of the Tribunal reads 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 registration under 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 the ld. 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 the Act 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.”
8. 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(E) 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(E). The ld.CIT(E) 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(E). 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.
9. Since the issue of regular registration has been remitted back to the file of ld.CIT(E) for denovo adjudication, the issue of denial of grant of approval u/s.80G(5) of the Act raised in ITA No.714/PUN/2026 is also remitted back for necessary adjudication in accordance with law.
10. In the result, both the appeals of the appellant are allowed for statistical purposes.
Order pronounced on this 28th day of July, 2026.
