Charitable organization wins appeal after registration rejected for wrong section code despite filing revised form

ITAT Kolkata allowed the appeal filed by a charitable organization working for animal relief. The CIT (E) had rejected the final registration application under Section 12A due to wrong section code selection on Form 10AB, despite the assessee filing a revised form with correct details. The CIT (E) also rejected the Section 80G(5)(iii) application as belated. ITAT found the CIT (E) failed to consider the revised application and erred in determining the time limit, as the application filed on 27.05.2023 was within the extended deadline of 30.09.2023. The matter was restored to CIT (E) with directions to consider the revised application and restore the provisional certificate.

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Issues:
1. Rejection of application for final registration under Section 12A of the Income Tax Act due to selecting the wrong Section code.
2. Dismissal of application under Section 80G(5)(iii) of the Act as belated and non-maintainable.

Issue 1: Rejection of Application for Final Registration under Section 12A:
The appeal concerned the rejection of the assessee's application for final registration under Section 12A of the Income Tax Act due to selecting the wrong Section code. The assessee initially applied under Section 12A(1)(ac)(iv) but later realized the correct code should have been 12A(1)(ac)(iii). The Tribunal found that the correct Section code applicable to the assessee was indeed 12A(1)(ac)(iii) and that the mistake was inadvertent. Despite the assessee filing a revised Form 10AB with the correct Section code and providing relevant documents, the application was rejected without considering the revised application. The Tribunal, in the interest of justice, directed the matter to be restored to the Commissioner for reconsideration based on the revised application with the correct Section code, ensuring the assessee is given a proper opportunity to be heard.

Issue 2: Dismissal of Application under Section 80G(5)(iii) as Belated:
The second appeal addressed the dismissal of the assessee's application under Section 80G(5)(iii) of the Act as belated and non-maintainable. The assessee argued that as per a CBDT Circular, the application was filed within the prescribed timeline. The Tribunal noted that Section 80G(5)(iii) relates to charitable organizations maintaining regular accounts, closely linked to Section 12A. Referring to the CBDT circular, it was established that the application deadline was extended to 30.09.2023. As the assessee submitted the application on 27.05.2023, within the extended timeframe, the rejection was deemed erroneous. The Tribunal directed the restoration of the provisional certificate and consideration of the application on its merits. All grounds of appeal were allowed for statistical purposes in this regard.

In conclusion, both appeals filed by the assessee were allowed for statistical purposes, with directions issued to rectify the errors in the application processes under Section 12A and Section 80G(5)(iii) of the Income Tax Act.

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