2023 (10) TMI 1238 - AT - Income Tax

Rectification of mistake - Rectification application rejected as assessee making fresh claim of benefit u/s 12AA - Benefit of exemption u/s 12A/12AA rejected - Claim denied as assessee inadvertently omitted to show in the return that 12A registration had been obtained by it - assessee mistakenly mentioned No in the column of the ITR asking whether registered under section 12A/12AA - HELD THAT - It is now well established that mistake apparent from the record may be one that can be gathered from the entire record of the case provided it does not call for evidence extraneous to the record. As stated earlier the assessee is a charitable trust registered under section 12A long ago and has all along been enjoying the benefits arising there-from in past years as also in the subsequent year. The case of the assessee before the AO/CIT(A) has been that it was inadvertently by clerical mistake that an incorrect fact was mentioned in the ITR at the time of online filing for which the assessee sought rectification. The assessee did not seek registration under section 12A/12AA in its rectification application under section 154. It was the request of assessee to rectify the inadvertent mistake which has crept in the ITR filed by it online. The Ld. AO/CIT(A) misread the assessee s request and proceeded with the erroneous impression that the assessee is seeking the fresh claim of benefit of exemption under section 12A/12AA in its rectificatory application. The assessee s claim of exemption under section 11 coupled with the ITR furnished under section 139(4A) of the Act clearly establishes that in its rectificatory application under section 154, the assessee was not making any fresh claim of benefit under section 12AA of the Act as alleged by the Ld. AO/CIT(A). Thus set aside the order of the Ld. CIT(A) and direct the Ld. AO to allow the benefit of registration under section 12A to the assessee in accordance with law - Assessee appeal allowed for statistical purposes.

Summary

Issues Involved:
- Rejection of assessee's claim under section 12A/12AA of the Income Tax Act, 1961 for Assessment Year 2013-14.

Summary:
In this case, the appeal was filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) pertaining to AY 2013-14. The grounds of appeal primarily revolved around the addition of Rs. 54,03,420 by the Assessing Officer and the resultant demand raised. The issue stemmed from the inadvertent omission by the assessee to show in the return that 12A registration had been obtained. The rectification application under section 154 of the Act was rejected by the AO, stating that the benefit of exemption under section 12A/12AA cannot be allowed as there was no claim for the same in the return of income. The CIT(A) also dismissed the appeal of the assessee based on similar grounds, citing a case precedent from ITAT Chandigarh. The main contention was whether the mistake was apparent from the record and fell within the scope of rectification under section 154 of the Act.

The Tribunal carefully considered the submissions of both parties and the record. It was undisputed that the assessee was a charitable trust registered under section 12A since 1993 and had consistently enjoyed the benefits of registration in previous and subsequent AY(s). The mistake in the return for AY 2013-14, where the assessee erroneously mentioned "No" regarding registration under section 12A/12AA, was deemed a procedural error rather than a substantive denial of the benefit. The Tribunal emphasized that a mistake apparent from the record should be discernible without the need for extraneous evidence. The assessee's request for rectification was based on correcting a clerical error in the online filing of the ITR, not on seeking a fresh claim of benefit under section 12A/12AA. Drawing a distinction from a previous case, the Tribunal concluded that the assessee's rectificatory application did not constitute a new claim but a correction of an inadvertent mistake.

Ultimately, the Tribunal set aside the order of the CIT(A) and directed the AO to allow the benefit of registration under section 12A to the assessee in accordance with the law. The appeal of the assessee was treated as allowed for statistical purposes.