2024 (11) TMI 1064 - AT - Income Tax

Error in selection of section code in application for registration u/s 12AB - assessee was granted provisional registration u/s 12A(1)(ac)(vi) - assessee made an application under section 12A(1)(ac) of the Act by selecting the code (vi) instead of (i) - CIT(E) noticed that on an earlier occasion, the assessee applied under 12A(1)(ac)(vi) of the Act instead of 12A(1)(ac)(i) HELD THAT - The assessee did not avail the opportunity of extension of time for filing application in Form 10A, if really its intention is to apply for 02-Sub clause (i) of clause (ac) of sub--section (1) of section 12A of the Act, by bringing the mistake to the notice of the authorities, since the assessee holds the registration under section 12A of the Act. When the CBDT took cognizance of the matter and by way of circulars extended the due date for filing Form 10A, it cannot be said that the learned CIT(E) can exercise jurisdiction to condone the delay in applying the Form 10A on the ground of mistake, because the time extended for such purpose by the CBDT expired by 30/06/2024. In these circumstances, we do not find anything illegality or irregularity in the rejection of application by the learned CIT(E). The fact remains that finally vide Circular No.7/2024 dated 25/04/2024, CBDT extended the date up to 30/06/2024, whereas the assessee filed Form 10A by 13/06/2023. Assessee filed another application on 30/06/2024 in Form 10AB by that date. Though in a wrong Form, the request of the assessee was pending before the due date. In this peculiarity of the circumstances, we deem it just and proper to condone the mistake committed by the assessee while applying registration by making a selection of wrong section code, namely, 02-Sub clause (vi) of clause (ac) of sub--section (1) of section 12A of the Act instead of 02-Sub clause (i) of clause (ac) of sub--section (1) of section 12A of the Act. We accordingly condone such a mistake. Learned CIT(E) will proceed to hear and dispose the request of the assessee by allowing it to apply now under Form 10A. Appeal of the assessee is allowed.

Summary

Issues:
1. Incorrect selection of section code in application for registration under section 12AB of the Income Tax Act.
2. Rejection of application by the Commissioner of Income Tax (Exemptions) due to the wrong section code selected.
3. Jurisdiction of the Commissioner to condone the delay in filing the correct application.
4. Consideration of bonafide mistake by the assessee.
5. Extension of due date for filing Form 10A by the CBDT.
6. Decision on whether to condone the mistake and allow the assessee to apply under the correct section code.

Analysis:
The judgment pertains to an appeal against the rejection of an application for registration under section 12AB of the Income Tax Act due to the assessee selecting the wrong section code. The assessee, a trust, had initially obtained registration under section 12A of the Act. Subsequently, when applying for regular registration under section 12AB, the assessee mistakenly chose the wrong code. The Commissioner of Income Tax (Exemptions) rejected the application as infructuous and barred by limitation, leading to the appeal.

The learned Authorized Representative (AR) argued that the mistake was inadvertent and should be condoned, emphasizing that the assessee did not stand to gain from the error. On the other hand, the Departmental Representative (DR) contended that the Commissioner lacked the jurisdiction to condone the delay, especially considering the extended deadline for filing Form 10A by the CBDT. The DR also questioned the bonafides of the mistake, highlighting the delay in rectifying it.

Upon review, the Tribunal noted that the assessee had indeed erred in selecting the incorrect section code and failed to respond to notices regarding the mistake. The Tribunal acknowledged the extension of the due date for filing Form 10A by the CBDT, which the assessee had missed. However, considering the peculiar circumstances and the pending application, the Tribunal deemed it just to condone the mistake. It directed the Commissioner to allow the assessee to apply under the correct section code, Form 10A, thereby granting the appeal.

In conclusion, the Tribunal allowed the appeal, emphasizing the condonation of the assessee's mistake in selecting the wrong section code. The judgment underscores the importance of procedural compliance in tax matters and the significance of timely rectification of errors to avoid adverse consequences.