Agrawal Samaj Karnataka Regd Vs CIT (ITAT Bangalore)
Wrong Section in Form 10AB Is a Rectifiable Technical Defect; U/s 12AB Registration Cannot Be Denied Without Opportunity to Correct Application – ITAT Bangalore
The Bangalore ITAT held that registration under section 12AB cannot be denied merely because the assessee filed Form 10AB under an incorrect statutory clause, where the defect is only technical or clerical and the genuineness of the trust’s activities is not in dispute. The Tribunal observed that such an error is rectifiable, and the Commissioner (Exemptions) ought to have afforded the assessee an opportunity to substitute the correct code instead of treating the application as withdrawn.
The Tribunal first condoned the 102-day delay in filing the appeal, accepting the assessee’s explanation that the delay arose from a bona fide mistaken belief that the procedural defect could be cured administratively and from the failure of its chartered accountant to file the appeal despite assuring the trustees that it would be done. The Tribunal held that where the explanation is reasonable and free from mala fides, the assessee should not be denied the opportunity to pursue its remedy.
On merits, the Tribunal noted that the CIT(E) had himself examined the trust’s activities, documents, donation records and earlier registration, and had not doubted the genuineness of its charitable activities. The only objection was that the assessee had sought provisional registration under an incorrect statutory code applicable to institutions yet to commence activities, whereas its activities had already commenced. The assessee subsequently requested withdrawal of the application under the mistaken belief that a fresh application was necessary. The Tribunal held that this technical mistake could not justify rejection of the application, as the assessee ought to have been permitted to correct the code and have its application considered on merits.
Accordingly, the Tribunal set aside the order of the CIT(E) and restored the matter with a direction to permit the assessee to substitute the application by mentioning the correct statutory code, explain the issues relating to donations sought by the CIT(E), and thereafter decide the application afresh on merits after conducting any necessary inquiry and granting a reasonable opportunity of hearing. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal has been filed by Agrawal Samaj Karnataka Regd. (“the assessee-trust” or “the appellant”) against the order dated 27 September 2025 passed by the Commissioner of Income Tax (Exemptions), Bangalore, whereby the assessee’s application in Form 10AB dated 10 March 2025 for registration under section 12AB of the Income-tax Act, 1961, was rejected as withdrawn.
