Rejection of 80G(5) registration over wrong Form 10AB clause held invalid; application to be treated under clause (iii)

ITAT, Ahmedabad held that rejection of an application for registration under s.80G(5) due to inadvertent wrong clause selection in Form 10AB was not maintainable. The Bench remitted the matter to the file of the CIT(E) with a direction to treat the application as if filed under clause (iii) to the second proviso to s.80G(5) and to grant approval if the applicant is otherwise eligible. Appeal allowed for statistical purposes.

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ISSUES PRESENTED AND CONSIDERED

1. Whether an application filed in Form No.10AB with an incorrect clause reference to the second proviso to section 80G(5) (i.e., clause (ii) instead of clause (iii)) constitutes a curable defect permitting the Commissioner to treat the application as if made under the correct clause.

2. Whether the Commissioner (CIT(E)) has power or duty to correct/rectify the wrongly quoted clause in Form No.10AB and proceed to grant approval under section 80G(5) where the substantive facts show eligibility under a different proviso clause.

ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Curability of mistake in clause selection in Form No.10AB

Legal framework: The second proviso to section 80G(5) prescribes time-based categories for making applications for approval under section 80G(5)(vi): (i) where previously approved, within three months from 1-4-2021; (ii) where approval is nearing expiry, at least six months prior; (iii) where provisionally approved, at least six months prior to expiry of provisional approval or within six months of commencement of activities, whichever earlier; and (iv) for institutions whose activities have not commenced or have commenced after a certain date, with subclauses (A)/(B). Form No.10AB requires the applicant to indicate the relevant clause of the proviso under which application is made.

Precedent treatment: Co-ordinate Bench and other Tribunal decisions (including the Kolkata Bench in Nitdaa Foundation and an Ahmedabad Coordinate Bench in Modasa Ekda Visha Khadayata Kovadia Kelvani Mandal) have held that incorrect mention of the proviso clause in Form No.10AB may be a curable/innocuous error where the substantive facts establish applicability of a different clause; such decisions directed consideration of the application under the correct clause.

Interpretation and reasoning: The Court examined the substantive facts: the trust was long-existing (activities commenced in 1974) and held provisional registration in Form 10AC for the period covering assessment years 2022-23 to 2025-26. Those facts squarely fit clause (iii) (provisionally approved entities). The filing of Form 10AB on 28-09-2024 incorrectly invoked clause (ii). The Tribunal treated the misdescription as an inadvertent, curable defect rather than a jurisdictional infirmity because the form error did not alter the factual basis for relief and the statutory scheme aims to determine eligibility on substantive criteria rather than on a clerical mis-reference. The Tribunal relied on prior coordinate decisions to support this approach.

Ratio vs. Obiter: The holding that a wrong clause selection in Form 10AB is a curable defect and that the application should be treated under the clause applicable on facts is ratio of the decision as applied to the facts of an entity with provisional approval and long-standing activities; reliance on coordinate bench precedent was decisive.

Conclusions: The mistake in clause selection was curable; the application should be considered under clause (iii) of the second proviso to section 80G(5) where factual circumstances (provisional approval and commencement history) satisfy that clause.

Issue 2 - Power of the Commissioner to amend/rectify the wrongly quoted clause in Form No.10AB and the remedy

Legal framework: The statute prescribes form-based filing (Form 10AB) but does not expressly provide an express mechanical power in the Commissioner to "amend" the clause code entered by the applicant; however, the statutory objective is to examine eligibility for approval under section 80G(5) guided by the proviso categories.

Precedent treatment: Tribunal precedents (including Nitdaa Foundation and Ahmedabad decisions) have directed Commissioners to consider misfiled applications under the correct clause when the error is inadvertent and the substantive facts demonstrate eligibility. These decisions treat the Commissioner's role as evaluative of substance and permit remittal for consideration as if filed under the correct clause.

Interpretation and reasoning: The Tribunal found that a strict refusal on the ground that the Commissioner lacks "power and facility under the Act to amend the section code" would frustrate substantive rights where the applicant has otherwise timely and eligible status. The remedial approach is remittal: direct the Commissioner to treat the application as made under the correct clause (here clause (iii)) and proceed to grant approval if the applicant is otherwise eligible. This approach harmonizes form requirements with the underlying statutory purpose of determining eligibility for approval, avoids undue forfeiture for clerical mistakes, and is consistent with prior Tribunal rulings.

Ratio vs. Obiter: The direction to remit the matter to the Commissioner with instructions to consider the application under the correct clause and grant approval if otherwise eligible is ratio and operative; the broader observation that the Commissioner has no power to amend per se is rejected in effect by the remedial direction and thus the remedial principle (remit and treat as correct clause) is the binding part of the decision at the Tribunal level.

Conclusions: The appropriate remedy for an inadvertent mis-selection of the proviso clause in Form 10AB is remittal to the Commissioner with a direction to consider the application as filed under the correct clause (clause (iii) on the facts), and to grant approval under section 80G(5) if the applicant is otherwise eligible. A mechanical rejection solely for incorrect clause coding is not justified where the substantive factual matrix meets another clause of the proviso.

Cross-reference

The conclusions on curability (Issue 1) and on remedial power/direction to the Commissioner (Issue 2) are interdependent: curability of the form error justifies the remedial direction to treat the application under the correct clause and remit for fresh consideration; Tribunal precedents form the basis for both holdings and were followed rather than distinguished.

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