Trust wins appeal after clerical error in Section 12A registration form dropdown menu deemed non-fatal

ITAT Surat allowed the appeal of a trust whose registration application under Section 12A/12AB was rejected by CIT(E). The assessee had made a clerical error in selecting the wrong sub-clause in the dropdown menu while e-filing Form 10AB. Despite the assessee's explanation and request for correction, CIT(E) held he lacked power to amend the form. ITAT ruled the mistake was inadvertent and non-fatal, directing CIT(E) to treat the application under correct sub-clause 12A(1)(ac)(iii) instead of 12A(1)(ac)(iv) and decide on merits. The tribunal also noted CBDT Circular 7/2024 extended the deadline for 80G(5) applications, benefiting the assessee.

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Issues Involved:
The judgment involves challenges to the rejection of registration under Section 12A/12AB of the Income Tax Act and rejection of approval under Section 80G(5) of the Act.

Issue 1: Registration under Section 12A/12AB
The appellant challenged the rejection of registration under Section 12A(1) of the Act, citing a clerical error in the application process. The appellant argued that the error was inadvertent and should not lead to denial of registration, as all conditions under Section 12A were met. The appellant sought a correction to the application under the appropriate sub-clause.

The Tribunal considered the submissions and found that the mistake in the application was not fatal and could be rectified. The Tribunal accepted the appellant's plea for correction and directed the authorities to treat the application under the correct sub-clause of Section 12A(1). The Tribunal emphasized the need for the authorities to consider the case on merit and granted the appellant an opportunity to provide necessary details and comply with requirements.

Issue 2: Approval under Section 80G(5)
The appellant also challenged the rejection of approval under Section 80G(5) of the Act, due to an error in selecting the appropriate clause in the application. The appellant requested a similar correction to the application under the correct clause.

The Tribunal, noting its decision in a similar case regarding registration under Section 12A, set aside the rejection of the approval under Section 80G(5). The Tribunal directed the authorities to reconsider the application on merit, granting the appellant a fair opportunity to present their case. The Tribunal highlighted the importance of timely submission and adherence to requirements, while also acknowledging the benefit of an extended filing period granted by the CBDT.

Conclusion:
The Tribunal allowed both appeals for statistical purposes, directing the authorities to reevaluate the applications for registration under Section 12A/12AB and approval under Section 80G(5) with a focus on merit. The Tribunal emphasized the need for proper consideration of the cases, granting the appellants opportunities to rectify errors and provide necessary details. The Tribunal also highlighted the importance of timely compliance with filing requirements and extended periods granted by the CBDT.

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