Emergency Charitable Trust Vs CIT (Exemption) (ITAT Agra)
The ITAT Agra bench considered the appeal filed by Emergency Charitable Trust against the order of the Commissioner of Income-tax (Exemption), Bhopal, which had rejected the Trust’s application for registration under Section 12AB of the Income Tax Act. The rejection was based entirely on a clerical error where the application incorrectly cited Section 12A(1)(ac)(vi)B instead of the correct Section 12A(1)(ac)(iii). The Trust’s representative argued that this was an inadvertent error and that their request to rectify the mistake was declined by the CIT(E), even after a physical form of the application was submitted. The departmental representative maintained that the CIT(E) could not suo moto correct the section in the digital filing system and that the Trust should have submitted a fresh digital application as advised. However, the Trust countered that filing a new application would only grant prospective registration, resulting in financial detriment because the order would not be based on the initial application date.
The Income Tax Appellate Tribunal (ITAT) sided with the Trust, stating the principle that a simple mistake in citing the correct legal provision cannot justify the rejection of an application. The Tribunal held a clear view that the CIT(E) should have allowed the Trust to correct the inadvertent clerical or technical error on the original application, as denying a rightful claim based on such a procedural flaw is untenable. Consequently, the ITAT ruled that the impugned rejection order could not be sustained and ordered its set-aside. The matter was sent back to the CIT(E) with a directive to issue a fresh order after allowing the Trust the opportunity to rectify the clerical error by mentioning the correct section of law in the application. The appeal was, therefore, allowed for statistical purposes, mandating a procedural remedy for the Trust.
