Typographical Error in Section 12A Application Should Not Hinder Trust’s Registration : ITAT

By | January 21, 2025
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Typographical Error in Section 12A Application Should Not Hinder Trust’s Registration

Summary in Key Points:

  • Section 12A Registration: The assessee-trust filed an application for registration under Section 12A of the Income-tax Act, 1961, which grants tax exemptions to charitable or religious trusts.
  • Typographical Error: Due to a typographical error, the application mentioned Section 12A(1)(ac)(ii) instead of the correct provision, Section 12A(1)(ac)(iii).
  • Rejection of Application: The Commissioner rejected the application solely on the basis of this technical error.
  • No Adverse Findings on Merit: It was noted that there were no adverse findings against the assessee-trust on the merits of the case.
  • Remand for Fresh Consideration: The court held that the rejection based on a typographical error was not justified and remanded the matter back to the Commissioner.

Decision:

The court directed the Commissioner to reconsider the application, treating it as if it were filed under the correct provision, Section 12A(1)(ac)(iii). This decision emphasizes that minor technical errors should not impede genuine applications for tax exemptions, especially when no issues are found with the merits of the case. The court’s approach ensures fairness and prevents procedural hurdles from obstructing the charitable objectives of the trust.

IN THE ITAT PUNE BENCH ‘A’
Kimaya Ashram Charitable Trust
v.
CIT*
R.K. PANDA, Vice president
and Vinay Bhamore, Judicial member
IT Appeal Nos.2033 & 2034 (Pun) OF 2024
DECEMBER  23, 2024
Neelesh Khandelwal for the Appellant. Amol Khairnar, for the Respondent.
ORDER
Vinay Bhamore, Judicial Member. – Both the above captioned appeals filed by the assessee are directed against the separate orders dated 05.08.2024 and 24.07.2024 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 12.02.2024 and denying the application for approval in Form No.10AB under clause (ii) of first proviso to sub-section (5) of section 80G of the IT Act filed on 12.02.2024 respectively.
ITA No.2033/PUN/2024 :
2. The appellant has raised the following grounds of appeal :-
“1. On the facts and circumstances prevailing in the case and as per the provisions of the law, it be held that the order passed by the Hon’ble Commissioner of Income Tax Exemptions in rejecting the application filed by the Appellant in Form 10AB u/s 12A(1) of the Act is improper, unwarranted, unjustified and contrary to the provision of the Act and facts prevailing in the case. It be held that on facts and circumstances prevailing in the case, registration should have been granted. Just and proper relief be granted to the Appellant in this respect.
2. The Appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.”
3. Facts of the case, in brief, are that the assessee is a trust registered under the Bombay Public Trust Act, 1950 at the Public Trust Registration Office, Pune on 08.09.2023 with an object to promote the teachings of Kimaya guide meditation process and other spiritual practices for attainment of inner peace and spiritual realization, conduct class, workshop, seminars, establishment of Ashrams, Maths, provide spiritual, religious and cultural services to the public through charitable purpose. With a view to verify the genuineness of activities of the assessee and compliance to requirement of any other law for the time being in force by the institution as are material for the purpose of achieving its objects, a notice was issued by Ld. CIT, Exemption, Pune through ITBA portal on 03.05.2024 requesting the assessee to upload certain information/clarification as mentioned in the notice.
4. The assessee in response to above notice furnished desired details. After verifying these details, Ld. CIT, Exemption, Pune found certain discrepancies and asked for their clarification by notice dated 11.07.2024. Ld. CIT, Exemption, Pune found that the assessee has filed application in Form No.10AB under sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the IT Act which suggests that the assessee has applied for renewal of regular registration of a trust which is already having regular registration u/s 12AB of the IT Act and the period of said registration is about to expire but the assessee has not filed copy of regular registration. It was further found by Ld. CIT, Exemption, Pune that the assessee has obtained provisional registration under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A of the IT Act, therefore, the application made by the assessee is not under applicable clause. Since the assessee did not comply with above notice, the application filed by the assessee was treated as not maintainable and hence the same was rejected for statistical purposes without going into the merits of the case and no adverse inference was drawn against the assessee. It is this order against which the assessee is in appeal before this Tribunal.
5. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT, Exemption, Pune is not justified. It was submitted by Ld. counsel of the assessee that due to typographical error the application was furnished in Form No.10AB u/s 12A(1)(ac)(ii) instead of u/s 12A(1)(ac)(iii) of the IT Act. It was submitted before the Bench that under identical facts the Co-ordinate Bench of this Tribunal in the case of Help For Children In Need Foundation v. CIT, Exemption, Pune in ITA No.1774/PUN/2024 order dated 09.12.2024 has decided the issue in favour of the assessee and remanded the matter back to Ld. CIT, Exemption, Pune with a direction to treat the application of the assessee as filed under correct/desired section of the IT Act and consider the same for grant of registration u/s 12A of the IT Act in accordance with law. Ld. Counsel of the assessee also relied on various other Co-ordinate Bench decisions involving the similar issue wherein the appeal was decided in favour of the assessee. Accordingly, it was requested before the Bench to set-aside the order passed by Ld. CIT, Exemption, Pune and further requested either to consider the amended application filed by the assessee on 07.11.2024 or to consider the original application as filed under correct/desired section in this regard.
6. Ld. DR appearing from the side of the Revenue relied on the order passed by Ld. CIT, Exemption, Pune and requested to confirm the same.
7. We have heard Ld. Counsels from both the sides and perused the material available on record including the two paper books furnished by the assessee. We find that the assessee trust was required to file the application for registration u/s 12A of the IT Act in Form No.10AB u/s 12A(1)(ac)(iii) of the IT Act but due to typographical error the application was filed in Form No.10AB u/s 12A(1)(ac)(ii) of the IT Act. We also find that Ld. CIT, Exemption, Pune has rejected the application of the assessee on the basis of above technical error and at the same time on merit of the case no adverse inference was drawn by him against the assessee. We find that the assessee has relied on the decision of the Co-ordinate Bench of the Tribunal in the case of Vir Sewa Mandir v. CIT (Exemption) in ITA No.1556/DEL/2024 order dated 09.08.2024 wherein under identical facts and similar circumstances, the Tribunal has allowed the appeal of the assessee by observing as under :-
“7. We have heard both the parties carefully. It is evident that the appellant/ assessee had committed a technical mistake in preparing the application under Section 12A(1)(ac)(ii) instead of 12A(1)(ac) of the Act. It was also brought to the notice of the Bench that the assessee had filed revised Form 10AB for seeking registration under the correct provisions i.e. Section 12A(1)(ac)(iii) of the Act which could have been considered by the learned CIT(Exemption).
8. In the light of the latest decisions in Sri Jeyamkonda Chaleeswara Soundaranayakai Amman Kumbhabiskheka Mala Kuthu and Raj Krishan Jain Charitable Trust’s cases (supra), the typographical error deserves to be corrected. Therefore, it would be appropriate and reasonable if the appeal is remanded back to the file of the learned CIT(Exemption) for fresh adjudication by considering amended application of the appellant under the repaired provisions
9. Hence, appeal is allowed for statistical purposes.”
8. Considering the totality of the facts of the case and respectfully following the above decision of the Tribunal in the case of Vir Sewa Mandir (supra), we find force in the arguments of Ld. Counsel of the assessee and accordingly deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to decide the issue afresh after treating the original application as filed by the assessee under correct/desired section i.e. section 12A(1)(ac)(iii) of the IT Act. The assessee is also hereby directed to respond to the notices issued by Ld. CIT, Exemption, Pune in this regard and produce specific documents/evidences desired by Ld. CIT, Exemption, Pune in support of application for registration u/s 12A of the IT Act without taking any adjournment under any pretext, otherwise Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee in this appeal are partly allowed.
9. In the result, the appeal filed by the assessee in ITA No.2033//PUN/2024 is allowed for statistical purposes.
ITA No.2034/PUN/2024 :
10. The instant appeal is against the order passed by Ld. CIT, Exemption, Pune denying grant of approval u/s 80G(5) of the 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 on the basis of application already filed by the assessee after treating the same as filed under correct/desired section of the IT Act.
11. In the result, the appeal filed by the assessee in ITA No.2034/PUN/2024 is allowed for statistical purposes.
12. To sum up, both the above captioned appeals filed by the assessee are allowed for statistical purpose.