2024 (6) TMI 1400 - AT - Income Tax

Rejection of application for registration the trust in form no.10AB u/s 12A(1)(ac)(ii) - assessee ought to have application u/s 12A(1)ac(iii) of the Act instead of 12A(1)(ac) (ii) of the Act - HELD THAT - From the perusal of the record it is evident that the appellant has made an application form 10AB for registration of trust u/s 12A(1)(ac)(ii) - appellant has filed the duly rectified application on the prescribed form 10AB. CIT(E) without considering the revised application of the appellant rejected it on the technical ground. Appellant also stated that Ld. ITAT has considered the similar issue in which the Ld. CIT (E) order was set aside by the ITAT Chennai Bench. As contended the appellant has committed a technical mistake in making the application u/s 12A(1)(ac)(ii) instead of clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act. As pointed out the appellant has filed revised form 10AB for seeking registration under the correct provision i.e. Section 12A(1)(ac)(iii) which can also be considered. In consonance with the decision rendered by the co-ordinate Bench, the typographical error deserves to be corrected. Accordingly, the appeal deserves to be allowed and impugned order dated 15.03.2024 of CIT (E) is liable to be set aside. Hence, the appeal is allowed and we set aside the order of Ld. CIT(E) dated 15-03-2024 and remand the matter back to the file of the CIT(E) for fresh adjudication by considering amended application of the appellant u/s 12A(1)(ac)(iii) of the Act, or he can call for amended application from the appellant. Appeal filed by the assessee is allowed for statistical purpose.

Summary

Issues:
Application for registration under the wrong section - Typographical error in the application form - Rejection of application by CIT(Exemption) - Appeal against rejection - Correcting the typographical error in the revised form - Comparison with similar cases where errors were condoned - Decision of the ITAT Chennai Bench - Appeal allowed by ITAT Delhi.

Analysis:
The judgment deals with an appeal against the rejection of a charitable trust's application for registration under Section 12A of the Income Tax Act due to a typographical error in the application form. The trust had mistakenly applied under Section 12A(1)(ac)(ii) instead of the correct provision, Section 12A(1)(ac)(iii). The CIT(Exemption) rejected the application based on this technical ground, despite the trust rectifying the error and submitting a revised form. The appellant contended that the rejection was unwarranted as the trust had fulfilled all conditions for registration under Section 12A. The appellant also argued that similar errors in other cases were condoned, highlighting arbitrariness in the decision. The ITAT Delhi considered the case law from the ITAT Chennai Bench, where a similar technical mistake was rectified, leading to the order being set aside for fresh adjudication.

The ITAT Delhi noted that the trust had rectified the typographical error by submitting a revised form for registration under the correct provision. The tribunal agreed with the appellant's argument that the technical mistake deserved correction, especially considering the precedent set by the ITAT Chennai Bench. The ITAT Delhi allowed the appeal, setting aside the CIT(Exemption)'s order and remanding the matter for fresh adjudication by considering the amended application under Section 12A(1)(ac)(iii) or requesting an amended application from the trust. The decision emphasized the importance of correcting technical errors to ensure fair treatment and adherence to legal provisions.

In conclusion, the ITAT Delhi allowed the appeal for statistical purposes, highlighting the significance of rectifying typographical errors in legal applications to prevent unjust rejections based on technical grounds. The judgment underscored the need for consistency in decision-making and the importance of following legal procedures accurately to avoid unnecessary complications in the registration process for charitable trusts under the Income Tax Act.