Charitable trust wins appeal after ITR clerical error regarding section 12A registration status corrected

The ITAT Delhi allowed the assessee's appeal regarding rectification of a clerical mistake in ITR filing. The charitable trust, already registered under section 12A, inadvertently marked "No" in the ITR column asking about 12A/12AA registration. The AO/CIT(A) erroneously rejected the rectification application, treating it as a fresh claim for exemption benefits rather than correction of an apparent mistake. The ITAT held that the mistake was apparent from records and directed the AO to allow section 12A benefits, setting aside the CIT(A)'s order.

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Issues Involved:
- Rejection of assessee's claim under section 12A/12AA of the Income Tax Act, 1961 for Assessment Year 2013-14.

Summary:
In this case, the appeal was filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) pertaining to AY 2013-14. The grounds of appeal primarily revolved around the addition of Rs. 54,03,420 by the Assessing Officer and the resultant demand raised. The issue stemmed from the inadvertent omission by the assessee to show in the return that 12A registration had been obtained. The rectification application under section 154 of the Act was rejected by the AO, stating that the benefit of exemption under section 12A/12AA cannot be allowed as there was no claim for the same in the return of income. The CIT(A) also dismissed the appeal of the assessee based on similar grounds, citing a case precedent from ITAT Chandigarh. The main contention was whether the mistake was apparent from the record and fell within the scope of rectification under section 154 of the Act.

The Tribunal carefully considered the submissions of both parties and the record. It was undisputed that the assessee was a charitable trust registered under section 12A since 1993 and had consistently enjoyed the benefits of registration in previous and subsequent AY(s). The mistake in the return for AY 2013-14, where the assessee erroneously mentioned "No" regarding registration under section 12A/12AA, was deemed a procedural error rather than a substantive denial of the benefit. The Tribunal emphasized that a mistake apparent from the record should be discernible without the need for extraneous evidence. The assessee's request for rectification was based on correcting a clerical error in the online filing of the ITR, not on seeking a fresh claim of benefit under section 12A/12AA. Drawing a distinction from a previous case, the Tribunal concluded that the assessee's rectificatory application did not constitute a new claim but a correction of an inadvertent mistake.

Ultimately, the Tribunal set aside the order of the CIT(A) and directed the AO to allow the benefit of registration under section 12A to the assessee in accordance with the law. The appeal of the assessee was treated as allowed for statistical purposes.

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