Case Law Details
Celebrate Life Vs CIT (Exemptions) (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai has ruled in favor of the charitable trust Celebrate Life, allowing it to refile its registration application under Section 12AB of the Income Tax Act, 1961. The appeal was filed after the Commissioner of Income Tax (Exemptions) [CIT(E)] rejected the trust’s application in Form 10AB on procedural grounds. The CIT(E) observed that the trust, which had provisional registration under Section 12A, applied under the wrong clause of the law. Instead of applying under Section 12A(1)(ac)(iii)—which applies to trusts with provisional registration—the trust mistakenly applied under Section 12A(1)(ac)(ii), which is for entities seeking renewal after five years of regular registration. Due to this error, the application was deemed non-maintainable and rejected.
Upon reviewing the records, the ITAT noted that the trust had made an inadvertent clerical error in selecting the relevant section code. Given that the mistake was technical and unintentional, the tribunal ruled that the trust should be allowed to file a fresh application under the correct provision. The ITAT also directed the CIT(E) to accept the revised application, either in physical form or through an online portal, and to adjudicate the matter following due process. This ruling reinforces the principle that procedural errors should not hinder genuine claims, ensuring that charitable organizations receive fair opportunities to comply with regulatory requirements. The appeal was thus allowed for statistical purposes, with the order pronounced on December 31, 2024.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The aforesaid appeal has been filed by the assessee against order passed by ld. CIT (Exemptions) rejecting the application filed in Form 10AB seeking registration u/s.12AA.
2. The reasons mentioned by ld. CIT (Exemptions) while rejecting the application is that, assessee has filed the application under wrong clause after observing as under:-
1.M/s Celebrate Life [hereafter ‘the applicant’ or ‘the assessee’] filed application in Form 10AB seeking registration under section 12AB of the Income Tax Act[hereafter ‘the Act’]. It is found that the applicant has been granted Provisional Registration under Section 12A of the Act in Form 10AC valid for AYs 2022-23 to AY 2024-25.
2. As the trust is provisionally registered, provisions of section 12A(1)(ac)(iii) are applicable to it, which is reproduced as under:
“(iii) where the trust or institution has been provisionally registered under section 12AB, at least six months prior to expiry of period of the provisional registration or within six months of commencement of its activities, whichever is earlier;”.
3. On perusal of the From 10AB filed by the assessee it was observed that the assessee has applied under section 12A(1)(ac) (ii) which is valid only for trusts already having regular registration for five years and is seeking renewal of regular registration which is due to expire. The assessee, having provisional registration for three years, does not qualify to make the application u/s 12A(1)(ac) (ii). Thus, the application for registration in Form 10AB filed by the assessee is not allowable on the ground of application filed under wrong section.
4. For statistical purposes, this application is non maintainable and stands rejected.”
3. From the perusal of the records it is seen that assessee is a charitable Trust established on 12/11/2020 and has filed its application in Form 10AB on 24/08/2024, however, inadvertently, due to some error in column 2, section code which was mentioned as ‘01-Sub-Clause(ii) of Clause (ac) of Sub-Section (1) of Section 12A’ had been typed, instead of clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act.
4. In view of the aforesaid facts that assessee had filed the Form 10AB and by mistake and due to inadvertent error, Section code has been mentioned wrongly instead of clause (iii) of clause (ac) Sub-Section (1) of Section 12A of the Act. Accordingly, we grant liberty to the assessee to file a fresh application before the ld. CIT(E) under the correct Form and ld. CIT(E) should take physical form or grant permission to upload the said form online and decide the issue in accordance with law after giving due opportunity of hearing to the assessee.
5. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 31st December,2024.
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