Technical Error in Form Not Fatal to Charitable Registration Claim, HC Remands Case.

By | October 31, 2025
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Technical Error in Form Not Fatal to Charitable Registration Claim, HC Remands Case.

Issue

Can a charitable trust’s application for regular registration under Section 12A be rejected—and its provisional registration cancelled—due to a technical error in selecting the wrong subsection in the application form, coupled with a failure to comply with a subsequent notice?

Facts

  • An assessee trust, which already had provisional registration, filed an application for regular registration under Section 12A.
  • In the application, the assessee inadvertently selected the incorrect subsection/clause.
  • The Commissioner (Exemption) issued a second notice, asking the assessee to substantiate its charitable activities with further information.
  • The assessee failed to comply with this second notice within the given time.
  • Citing the non-compliance, the Commissioner rejected the application for regular registration and also cancelled the provisional registration that had been granted earlier.

Decision

  • The High Court ruled decisively in favour of the assessee and remanded the matter.
  • It held that a wrong selection of a section code or clause in an application is a technical and curable error. It should not be treated as a fatal defect that invalidates the entire proceeding.
  • The court found that a taxpayer’s rightful claim cannot be denied solely on the basis of such an inadvertent mistake.
  • The Commissioner (Exemption) was directed to provide an opportunity to the assessee to file the correct application and then decide the case on its merits after a proper hearing.

Key Takeaways

  • Substance Over Form: This ruling is a strong affirmation that the substantive eligibility of an entity for a tax benefit should not be defeated by minor, non-malicious procedural or clerical errors in application forms.
  • Duty of Tax Authorities: The decision implies that tax authorities should adopt a facilitative approach. When a clear error is noticed in an application, the authority should guide the applicant to correct it rather than using it as a ground for outright rejection.
  • Curable Defects: Selecting the wrong option from a dropdown menu or quoting an incorrect section in a form is a curable defect. Taxpayers must be given a fair chance to rectify such mistakes.
  • Natural Justice: The court’s decision to remand the case for a fresh hearing after the correction of the application reinforces the principle of natural justice, ensuring the assessee gets a proper opportunity to present its case based on a correct and complete application.
IN THE ITAT PUNE BENCH ‘B’
PSR Sustainability Foundation
v.
Commissioner of Income-tax(Exemption)
Vinay Bhamore, Judicial Member
and Dr. Manish Borad, Accountant Member
IT Appeal Nos.1920 and 1921 (PUNE) of 2025
OCTOBER  6, 2025
Amit Bobde for the Respondent.
ORDER
Dr. Manish Borad, Accountant Member.- The captioned appeals at the instance of appellant are against the rejection of applications for regular registration u/s.12AB(1)(ac)(iii) and approval u/s.80G of the Act respectively framed by CIT(E), Pune dated 09.12.2024.
2. When the case called for, none appeared on behalf of the appellant despite service of valid notice. We therefore proceed to dispose of the appeal with the assistance of ld. Departmental Representative and available material records.
3. Registry has informed that there is delay of 164 days and 72 days respectively in preferring the instant appeals before this Tribunal. Appellant has filed application(s) for condonation of delay explaining the reasons which led to delay in filing of the appeals.
“4. Reason for Delay in Filing the Appeal:
4.1. Initial Guidance and Reapplication Attempt:
Upon receipt of the impugned rejection order dated 09/12/2024, the trustees of the Appellant Trust sought professional guidance. Given the technical nature of the defect and considering multiple procedural amendments, the initial advice was to pursue reapplication. As such, the Appellant Trust was under a bona fide belief that refiling the application in appropriate remedy in the situation. Consequently, a fresh application was filed in Form 10AB on 08/01/2025.
4.2. Seeking Second Professional Opinion
Given the complexity of the issue and its legal ramifications, the Trustees considered it prudent to obtain a second professional opinion. Accordingly, a new tax consultant was approached to independently assess the adequacy of the action taken so far. After detailed deliberations, the new consultant opined that an appeal before the Hon’ble ITAT would be necessary to secure registration from AY 2022-23 onwards, irrespective of the reapplication.
4.3. Further Consultations and Decision to Appeal:
Once it was decided that appeal needs to be filed, multiple rounds of discussions were held with consultant regular engaged in taxation and exemption matters to evaluate the procedural implications of the appeal route vis-a-vis reapplication. Upon holistic evaluation of timelines, registration scope, and statutory rights, it was concluded that filing an appeal before the Hon’ble ITAT would be the most effective and legally tenable course of action.
4.4. Compilation of Documentation and Appeal Filing:
Thereafter, the Appellant Trust formally engaged the new consultant for initiating the appellate proceedings. The process of collecting relevant data, activity records, and documentation was undertaken, which consumed considerable time. Only after receiving the complete inputs, the consultant was able to compile the necessary annexures and initiate the preparation for appeal.
4.5. Consequent Delay:
It is respectfully submitted that the delay of 164 days in filing the present appeal has occurred solely due to the above bona fide circumstances involving professional advice, technical obstacles, and careful evaluation of legal remedies. The delay is neither deliberate nor arising from any negligence or malafide intent on part of the Appellant Trust. Rather, it was a result of genuine confusion, multiple professional consultations, and sincere efforts to comply with law.
5. Reliance on judicial precedents:
Appellant Trust is submitting that the said delay of 164 days is purely unintentional and because of bonafide reasons. Considering the same Appellant Trust wishes to rely on the following judicial precedents where in delay in filling an appeal before Honorable ITAT on account of bonafide reasons is condoned. Following are various judicial precedents:
i. N.Balakrishnan v. M. Krishnamurthy (1998) 7 SSC 123
It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in reversional jurisdiction, unless the exercise of discretion was on whole untenable grounds or arbitrary or perverse. But it is a different matter when the first cut refuses to condone the dela. In such cases, the superior cut would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court.
ii. Collector, Land acquisition v. MstKatiji (1987) 167 ITR (SC)
When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
iii. Senior Bhosale Estate (HUF) v. Asst. CIT (SC)
wherein it was held that unless that fact was to be refuted, question of disbelieving stand taken by appellant on affidavit, could not arise.
Relevant para of the order is usefully extracted as under:-
“We submit that the expression sufficient course must receive a liberal construction so as to advance substantial justice and generally delays in preferring the appeals are required to be condoned in interest of justice. A litigation does not stand to benefit by resorting to delay, therefore a justice oriented approach is required by courts. In every case of delay there can be some lapses on the part of the litigant concerned, but that alone is not enough to shut the door against him. We further submit that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. In matters of condonation of delay a highly pedantic approach should be eschewed and a justice-oriented approach should be adopted and a party should not be made to suffer on account of technicalities.”
6. Prayer:
Appellant would like to humbly submit that, the said delay in filing an appeal is purely unintentional and that there was no ulterior motive behind the non-adherence of stipulated timelines. The Appellant Trust deeply regretted the inconvenience caused in this regard. Further, the delay in filing the present appeal is unintentional and merely due to a lack of awareness of the income tax provisions and correct remedial actions.
In this regard, in light of the abovementioned facts and reasons, the appellant requests your honors to condone the delay of 164 days in filing the appeal as the appellant has a good case on merits.”
4. After hearing both the sides and perusing the averments made in the applications, we are satisfied that ‘reasonable cause’ prevented the appellant to file the appeals within the stipulated time. We note that the delay is not intentional and appellant would not have gained from filing the appeals with a delay. We therefore in light of judgments of Hon’ble Apex Court Court in the case of Collector, Land Acquisition, Anantnag v. Mst. Katiji [1987] 167 ITR 471 (SC)/(1987) 2 SCC 107 and in the case of Inder Singh v. State of Madhya Pradesh [Civil Appeal No. 4304 of 2025, dated 21-3-2025]/2025 INSC 382 ) condone the delay in filing of the instant appeals before this Tribunal.
5. Briefly, the facts of the case are that the appellant is a non-profit institution incorporated as a Section 8 of the Companies Act, 2013. It is formed with the object of promotion of environmental sustainability, socio economic empowerment and capacity building. The Trust conducts research and advocacy in sustainable development and natural resource management, implements conservation projects concerning water, soil, forests, and biodiversity, and collaborates with governmental and non governmental bodies on clean energy and pollution abatement initiatives etc.
6. The appellant trust filed application on Form No.10AB under clause (iii) of section 12A(1)(ac) for grant of regular registration of the Act on 29.06.2024. In order to verify the genuineness of activities of the appellant trust, the ld. CIT (Exemption) issued a notice dt. 06.08.2024 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 29.11.2024 seeking following details :
“(i) Note on activity furnished by you is very general in nature. Furnish activity note giving details viz. dates and places of each activities carried out by your trust, details of beneficiaries, how they were identified, etc.
(ii) Furnish the copies of bills/ invoices of expenses done on activities as shown in your financial statements.
(iii) In respect of corpus and earmarked donation received, furnish the letter of direction received from the donors.
(iv) Also furnish the copies of receipt issued to the donors by your trust.”
6.1 There was no compliance from the side of the appellant to the said notice issued by ld.CIT(E). In the circumstances, the ld. CIT(Exemption) rejected the application filed for grant of regular registration. Similarly, the application for approval u/s.80G(5) of the Act came to be rejected vide order dated 07.03.2025 observing as under :
“10 In the instant case it is noticed that the assessee is neither regularly registered u/s 12AB read with section 12A(1) (ac) (i) /12A(1)(ac)(iii) nor having regular approval under section 10(23C) read with clause (i) / (iii) of first proviso to the said section and the case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. The assessee is not approved under section 10(23AA) of the Act. The assessee is also not a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents. In fact, the application of the assessee in form No.10AB for registration u/s 12AB filed under the provisions of section 12A(1)(ac)(iii) of the Act has been rejected vide order dated 09/12/2024. Therefore, the condition (i) of section 80G(5) of the Income Tax Act, 1961 is also not fulfilled in this case.”
7. Being aggrieved, the appellant trust has approached this Tribunal assailing the impugned orders.
8. Before us, the appellant in the appeal memo set has contended that the application for regular registration is rejected due to the technical error of selecting incorrect subsection. It is further stated that upon receipt of impugned order the appellant after professional guidance filed fresh application on 08.01.2025 rather than filing an appeal before this Tribunal. Thereafter, seeking second opinion the appellant has approached this Tribunal.
9. Ld. DR supported the order of ld. CIT(Exemption) submitted that appellant failed to avail the ample opportunities provided to it.
10. We have heard the ld. Departmental Representative 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. It is an admitted fact that the appellant failed to make compliance before ld.CIT(E) for the second notice substantiating the charitable activities carried by it due to which the Ld. CIT(E) rejected the application of the appellant for regular registration u/s 12A and also cancelled the provisional registration granted earlier. It is manifest that the second notice was issued on 29.11.2024 fixing the compliance on or 05.12.2024.
11. It has been firstly contended by the appellant in the appeal memo set that it was required to file application in Form 10AB u/s.12A91)(ac)(vi)-Item (B) but filed against section 12A(1)(ac)(iv)-ITEM (A) of the Act. Secondly, the time provided for compliance to the second notice dated 29.11.2024 is only 34 working days and it is unreasonable.
12. 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) v. CIT (Exemptions) [IT Appeal Nos. 369 & 370(Srt) of 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 applicationfiled 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 setaside. 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.”
13. 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.
14. Since the issue of regular registration has been remitted back to the file of ld.CIT(E) for denovo adjudication, the issue of grant of approval u/s.80G(5) of the Act is also remitted back for necessary adjudication in accordance with law.
15. In the result, both the appeals of the appellant are allowed for statistical purposes.