Substantial compliance in 80G approval restored where wrong Form 10AB clause was a bona fide technical error.

Rejection of approval under section 80G(5) for selecting the wrong clause in Form 10AB was held unsustainable where the assessee already had prior 80G approval, had obtained provisional registration, and the mistake was inadvertent, typographical and bona fide. The technical defect was treated as a procedural lapse rather than a substantive non-compliance, and the principle of substantial compliance was applied. The matter was restored for fresh consideration on merits, with the application to be treated as filed under the correct clause and the assessee given a reasonable opportunity to produce supporting material.

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Issues: Whether the rejection of approval under section 80G(5) of the Income-tax Act, 1961, for selecting the wrong clause in Form 10AB should be sustained when the mistake was inadvertent and the assessee had earlier 80G approval.

Analysis: The assessee had already been enjoying 80G approval and had also obtained provisional registration under the new regime. The only defect found in the application was that the wrong clause was selected in Form 10AB after the provisional period had expired. The mistake was held to be inadvertent, typographical and bona fide, and the rejection on that technical ground was found unsustainable. The reasoning was supported by coordinate bench decisions recognising correction of such technical errors and by the principle of substantial compliance, particularly where the lapse is procedural rather than substantive. The matter was therefore required to be reconsidered on merits after giving the assessee a reasonable opportunity to present supporting material.

Conclusion: The rejection of the application could not be upheld merely for the technical error, and the matter was restored to the tax authority for fresh adjudication after treating the application as one filed under the correct clause and after granting reasonable opportunity to the assessee.

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