Case Law Details
Stars Forum Vs CIT (ITAT Pune)
Final Registration Application Under a Different Sub-clause Than Provisional Registration is a rectifiable mistake and Not a Ground for Denial of Section 12A Registration: ITAT Pune
Summary: The trust’s application for registration under Section 12A and approval under Section 80G of the Income Tax Act was rejected by the CIT (Exemption), due to a clerical error in the form submitted, without referring the activities of the Trust. The ITAT accepted the trust’s explanation regarding the error and remanded the application for fresh adjudication under the correct section. The related appeal for 80G approval was also remanded, being consequential in nature.
Facts of the Case
Stars Forum is a charitable trust. It was registered under the Bombay Public Trust Act on December 23, 2014. The trust undertakes activities such as skill training and rural development. On June 28, 2024, it applied for registration in Form 10AB under sub-clause (ii) of clause (ac) of section 12A(1). It also sought approval under section 80G.
The CIT (Exemption), however rejected the application as non-maintainable. He observed that the trust had only received provisional registration under sub-clause (iii). No provisional registration was sought, under which the assessee has now applied for regular registration under sub-clause (ii). The CIT(E) did not examine the merit of the case.
Arguments Made
The authorized representative of the assessee trust, argued that the selection of the incorrect section in the application was inadvertent and occurred due to lack of professional assistance. The error was typographical, and the trust submitted that a corrected application was subsequently filed under the correct provision, pursuant to which registration was actually granted by the CIT (Exemption) but only from a later date. The trust cited tribunal decisions such as Shree Swaminarayan Gadi Trust vs. CIT, [2024] 162 taxmann.com 772 (Surat-Trib.) and Raj Krishan Jain Charitable Trust in ITA No.1553/Del/2024, where tribunal appeals in similar factual situations were allowed, and it was held that technical mistakes in section codes could be corrected, remanding matter for fresh consideration under the correct provision.
Decision of ITAT
The ITAT, Pune accepted the trust’s argument regarding the typographical error and noted that the CIT (Exemption) had made no adverse finding on the genuineness or merits of the trust’s activities. Referring to the precedent set in the Raj Krishan Jain Charitable Trust case, the Tribunal held that the technical mistake deserved to be corrected and directed the CIT (Exemption) to treat the original application as if filed under clause (iii) of section 12A(1)(ac), providing the trust with a fresh hearing. The related appeal regarding Section 80G approval was also remanded.
FULL TEXT OF THE ORDER OF ITAT PUNE
Both the above captioned appeals filed by the assessee are directed against the separate orders dated 25.10.2024 and 21.12.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration in Form No.10AB under sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the IT Act filed on 28.06.2024 and denying the application for approval in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the IT Act filed on 28.06.2024.
ITA No.1219/PUN/2025 :
2. There is a delay of 129 days in filing of the present appeal. We are satisfied with the reasons mentioned in the affidavit for condonation that the applicant was prevented by sufficient cause for not filing the appeal within the prescribed time limit. Ld. DR has not raised any objection to condone the delay, therefore we condone the delay of 129 days and proceed to adjudicate the appeal.
3. Facts of the case, in brief, are that the assessee is a charitable trust registered under the Bombay Public Trust Act, 1950 w.e.f. 23.12.2014 and is actively engaged in range of charitable activities centred around skilled training for advancement and rural societies reform. The assessee trust has applied for registration in Form 10AB under sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the IT Act on 28.06.2024. With a view to verify the genuineness of activities of the assessee and compliance to requirements of any other law for the time being in force by the trust/institution as are material for the purpose of achieving its objects, a notice was issued on 30.07.2024 through ITBA portal requesting the assessee to upload various information detailed in notice. In compliance to the above notice, desired information was furnished by the assessee trust. Subsequently, Ld. CIT, Exemption, Pune found that the application was furnished u/s 12A(1)(ac)(ii) of the IT Act which is not applicable to the assessee since the trust has obtained provisional registration under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A of the IT Act, therefore the prerequisite for application under sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the IT Act is not applicable to the assessee and therefore another notice was issued to the assessee on 08.10.2024 to clarify the position. After considering the reply, Ld. CIT, Exemption, Pune rejected the application filed by the assessee by observing as under :-
“6. On verification of the details / documents submitted by the assessee, it is seen that the assessee has not furnished the copy of REGULAR REGISTRATION in form No. 10AC under section 12AB read with section 12A(1)(ac)(i) or 12A(1)(ac)(iii) of the Income Tax Act, 1961 but submitted a copy of PROVISIONAL REGISTRATION under section 12AB read with section 12A(1)(ac)(vi) of the Income Tax Act, 1961.
7. The present application is filed by the assessee under clause (ii) of section 12A(1)(ac) of the Income Tax Act, 1961. The provisions of clause (ii) of section 12A(1)(ac) are related to application for renewal of regular registration of a trust or institution which is already having regular registration under section 12AB of the Act and the period of said registration is about to expire.
8. The assessee was specifically requested vide the initial notice to furnish the copy of order of regular registration under section 12AB of the Income Tax Act, 1961. Such copy is actually required to be furnished along with the application itself under the provisions of Rule 17A(2)(e) of the Income Tax Rules, 1962. However, the assessee has neither submitted the same along with the application nor in response to the notice issued in this regard. Thus the assessee failed to furnish the same. The copy of order submitted by the assessee is a copy of provisional registration under section 12AB read with clause (vi) of section 12A(1)(ac) of the Income Tax Act, 1961 and not a copy of regular registration under section 12AB read with clause (i) or clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961.
9. The non-submission of copy of order of regular registration under section 12AB of the Income Tax Act, 1961 establishes the fact that the prerequisite for application under clause (ii) of Section 12A(1)(ac) of the Income Tax Act, 1961 is not fulfilled in this case. Therefore, prima-facie it appears that the application is not maintainable.
10. In view of the above, the application filed by the assessee is treated as non-maintainable and hence, ‘rejected’ for statistical purposes without going into the merits of the case and no adverse inference is drawn against the assessee.”
4. It is this order against which the assessee is in appeal before this Tribunal.
5. AR appearing from the side of the assessee submitted that the rejection order passed by Ld. CIT, Exemption, Pune is unjustified. It was submitted that due to a typographical/inadvertent error the application was filed u/s 12A(1)(ac)(ii) of the IT Act whereas the assessee was required to file application u/s 12A(1)(ac)(iii) of the IT Act. It was further submitted that application was filed by its own without help of any tax professional and due to this the above mistake occurred.
6. Apart from above, it was also submitted by Ld. Counsel of the assessee that after rejection of above application, the assessee trust filed another application for registration u/s 12AB of the IT Act before Ld. CIT, Exemption, Pune under the correct section code and Ld. CIT, Exemption, Pune granted registration u/s 12AB of the IT Act to the assessee trust. However, the registration was granted from the subsequent date and not for the earlier period. Accordingly, it was prayed before the Bench to set-aside the impugned order passed by Ld. CIT, Exemption, Pune and further requested to direct him to treat the application as filed under correct section code and grant registration u/s 12AB of the IT Act. In support of the above contention, Ld. AR relied on the decision passed by Co-ordinate Bench of this Tribunal in the case of Shree Swaminarayan Gadi Trust vs. CIT, [2024] 162 taxmann.com 772 (Surat-Trib.) order dated 13.05.2024 wherein under identical situation Tribunal was pleased to allow the appeal of the assessee. Ld. AR further relied on another decision of the Co-ordinate Bench of this Tribunal in the case of Raj Krishan Jain Charitable Trust in ITA No.1553/Del/2024 order dated 05.06.2024, wherein under similar circumstances, the Tribunal was pleased to allow the appeal of the assessee. Accordingly, Ld. AR requested before the Bench to set-aside the order passed by Ld. CIT, Exemption, Pune and further requested to direct him to consider the original application as filed under clause (iii) of section 12A(1)(ac) of the IT Act.
7. DR appearing for the Revenue relied on the order passed by Ld. CIT, Exemption, Pune and requested to confirm the same.
8. We have heard Ld. Counsels from both the sides and perused the material available on record and also copy of case laws relied on by the assessee. We find that admittedly, the assessee trust was required to file application under clause (iii) of section 12A(1)(ac) of the IT Act but due to inadvertent error the application was filed under clause (ii) of section 12A(1)(ac) of the IT Act and for this reason alone Ld. CIT, Exemption, Pune rejected its application for registration. We find that under identical situations, a Co-ordinate Bench of this Tribunal in the case of Raj Krishan Jain Charitable Trust (supra) allowed the appeal of the assessee by observing as under :-
“9. As contended the appellant has committed a technical mistake in making the application under Section 12A(1)(ac)(ii) instead of clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act. As pointed out the appellant has filed revised form 10AB for seeking registration under the correct provision i.e. Section 12A(1)(ac)(iii) which can also be considered.
10. In consonance with the decision rendered by the co-ordinate Bench, the typographical error deserves to be corrected. Accordingly, the appeal deserves to be allowed and impugned order dated 15.03.2024 of Ld. CIT (E) is liable to be set aside. Hence, the appeal is allowed and we set aside the order of Ld. CIT(E) dated 15-03-2024 and remand the matter back to the file of the CIT(E) for fresh adjudication by considering amended application of the appellant under Section 12A(1)(ac)(iii) of the Act, or he can call for amended application from the appellant.
11. In the result, the appeal filed by the assessee is allowed for statistical purpose.”
9. Respectfully following the above decision passed by the Coordinate Bench of this Tribunal (supra) and also observing the fact that in the instant case Ld. CIT, Exemption, Pune has not given any adverse finding on merits of the case, even granted the registration u/s 12AB of the IT Act on 17.04.2025 from subsequent date on second application of the assessee, we deem it fit to set-aside the impugned order dated 25.10.2024 passed by Ld. CIT, Exemption, Pune and direct him to treat the application already filed by the assessee as under clause (iii) of section 12A(1)(ac) of the IT Act instead of under clause (ii) of section 12A(1)(ac) of the IT Act and decide the same as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT, Exemption, Pune in this regard and produce supporting documents/evidences in support of grounds of appeal, otherwise, Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal filed by the assessee are partly allowed.
10. In the result, the appeal filed by the assessee in ITA No.1219/PUN/2025 is partly allowed for statistical purposes.
ITA No.493/PUN/2025 :
11. The instant appeal is against the order passed by Ld. CIT, Exemption, Pune denying grant of approval u/s 80G(5) of the IT Act. Since we have remanded the issue of grant of registration u/s 12A(1)(ac)(iii) to the file of Ld. CIT, Exemption, Pune for de novo adjudication, therefore, in the interest of justice, it would be appropriate to remit the issue of grant of approval u/s 80G(5) as well to the file of Ld. CIT, Exemption, Pune being consequential, for de novo adjudication.
12. In the result, the appeal filed by the assessee in ITA No.493/PUN/2025 is partly allowed for statistical purposes.
13. To sum up, both the above captioned appeals filed by the assessee are partly allowed for statistical purposes.
Order pronounced on this 29th day of July, 2025.
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