Technical mistake in Form 10A selection could not justify cancellation of registration; matter remanded for fresh adjudication.

Technical error in selecting the wrong clause while filing Form 10A/Form 10AB did not, on these facts, justify cancellation of registration granted in Form 10AC. The assessee had chosen section 12A(1)(ac)(i) instead of section 12A(1)(ac)(iv), and the cancellation was based on the view that the resulting registration was erroneous under Rule 17A(6) of the Income-tax Rules, 1962. The ITAT treated the mistake as technical and held that the matter required reconsideration by the registration authority. The rejection was set aside and the matter was remanded to the CIT(E) for fresh adjudication in accordance with law.

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Issues: Whether rejection of the application for registration and cancellation of the registration granted in Form 10AC, on the ground of a technical mistake in choosing the incorrect clause while filing Form 10A / Form 10AB, was sustainable.

Analysis: The assessee had mistakenly selected section 12A(1)(ac)(i) instead of section 12A(1)(ac)(iv) while preparing the application. The order of rejection proceeded on the basis that the registration obtained in Form 10AC was erroneous and liable to be cancelled under Rule 17A(6) of the Income-tax Rules, 1962. On the facts, the mistake was treated as technical in nature and required reconsideration by the registration authority.

Conclusion: The rejection order was set aside and the matter was remanded to the CIT(E) for fresh adjudication in accordance with law.

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