AASHRAY SEVA KENDRA ,MUMBAI V. CIT(EXEMPTION), MUMBAI

ITA 461/MUM/2025

AI Insights

The case involves Aashray Seva Kendra, which appealed against the order of the Commissioner of Income-tax (Exemptions) rejecting their application for final registration under section 80G of the Income-tax Act, 1961. The rejection was based on the assessee's inadvertent application under the wrong clause in Form 10AB, which was meant for provisional registration. The Tribunal noted that the assessee had previously been granted provisional registration and had mistakenly applied for final registration under the wrong clause. The Tribunal referenced a similar case, Rotary Charity Trust, where the matter was restored to the CIT(E) for reconsideration under the correct provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31951 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Other Referred Cases: Rotary Charity Trust in ITA No. 6133/Mum/2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K.R. SUBHASH
• Assessee Lawyers: SHASHANK MEHTA
• Keywords: Bonafide mistake
• Section: 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 461/MUM/2025 Assessment Year: 2025-26 Aashray Seva Kendra, 1, Prime Rose Chamber, J.D. Lane, Fort, Mumbai-400 001. Vs. CIT Exemption, 601, MTNL Building, Pedder Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026. PAN NO. AAETA 3245 P Appellant Respondent Assessee by : Mr. Shashank Mehta Revenue by : Dr. K.R. Subhash, CIT-DR Date of Hearing : 06/03/2025 Date of pronouncement : 07/03/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 09.11.2024 passed by the Ld. Commissioner of Income-tax (Exemptions), Mumbai [in short ‘the Ld. CIT(E)’], wherein the application of the assessee for registration u/s 80G of the Income- tax Act, 1961 (in short ‘the Act’) has been rejected. The grounds raised by the assessee are reproduced as under: 1. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final registration under section 80G o inadvertent and unintentional mistake in selecting clause (iv) of section 80G(5) in place of clause (iii) of the said section in Form 10AB. 2. In the facts and circumstances of the case and in law, the learned Commissioner of passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final registration under section 80G of the Act without providing any show cause notice in respect of the pr 3. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final registration under section 80G of the Act the factual matrix 2. We have heard rival submissions of the parties and perused the relevant materials on record provisional registration u/s 80G application seeking regular registration u/s 80G of the Act, however, inadvertently applied in Form No. 10AB in clause (iv the first proviso to section 80G(5) of the Act provisional registratio wrong form, the Ld. CIT(E) declined to grant registration to the assessee observing as under: ITA No. 461/MUM/2025 tax Act, 1961 (in short ‘the Act’) has been rejected. The grounds raised by the assessee are reproduced as under: ts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final registration under section 80G of the Act merely on account of inadvertent and unintentional mistake in selecting clause (iv) of section 80G(5) in place of clause (iii) of the said section in Form 2. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final registration under section 80G of the Act without providing any show cause notice in respect of the proposed rejection. 3. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final egistration under section 80G of the Act- in utter disregards to the factual matrix of the case. We have heard rival submissions of the parties and perused the relevant materials on record. The assessee had been granted provisional registration u/s 80G of the Act and thereafter application seeking regular registration u/s 80G of the Act, however, inadvertently applied in Form No. 10AB in clause (iv the first proviso to section 80G(5) of the Act, which was meant for provisional registration. Due to application by the assessee under wrong form, the Ld. CIT(E) declined to grant registration to the assessee observing as under: Aashray Seva Kendra 2 ITA No. 461/MUM/2025 tax Act, 1961 (in short ‘the Act’) has been rejected. The grounds ts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final f the Act merely on account of inadvertent and unintentional mistake in selecting clause (iv) of section 80G(5) in place of clause (iii) of the said section in Form 2. In the facts and circumstances of the case and in law, the Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD - rejecting the approval sought by the appellant for final registration under section 80G of the Act without providing any 3. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in passing the impugned order dated 09.11.2024 in Form 10AD rejecting the approval sought by the appellant for final in utter disregards to We have heard rival submissions of the parties and perused . The assessee had been granted thereafter filed an application seeking regular registration u/s 80G of the Act, however, inadvertently applied in Form No. 10AB in clause (iv)(B) of which was meant for n. Due to application by the assessee under wrong form, the Ld. CIT(E) declined to grant registration to the “3. On verification of the facts and circumstances found that the trust was the assessee has already claimed exemption by filing ITR before applying for approval in Form 10AB (Previous Years). 4. As per above mentioned provision of Income Tax Act, the assessee has to file Form 10AB u/s 80G(5)(iv)(B), if the has not claimed exemption in Previous years. Since the assessee has claimed exemption in Previous years, therefore this application u/s 80G is not allowable. Further, the assessee is not fulfilling the stipulated conditions prescribed for filing a for approval in Form 10AB. In view of the above this application Form is hereby 2.1 Before us, the Ld. counsel for the assessee referred to the decision of Co-ordinate Bench in the case of Rotary Charity Trust in ITA No. 6133/Mum/2024 circumstances restored the matter back to the Ld. CIT(E) for considering the application of the registration for regular approval. The relevant finding of the Tribunal is reproduced as under: “5. We have heard the parties record. Before we proceed to examine the facts in assessee's case, it is important to first look at the relevant provisions of first proviso to subsection (5) of section 80G which read as under Provided that the institution or make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval, (i) where the institution or fund is approved under clause (vi) (as it stood immediately Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the Ist day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to e of the said period; (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the ITA No. 461/MUM/2025 On verification of the facts and circumstances of the case, it is found that the trust was incorporated on 14.09.2015. Further, the assessee has already claimed exemption by filing ITR before applying for approval in Form 10AB (Previous Years). 4. As per above mentioned provision of Income Tax Act, the assessee has to file Form 10AB u/s 80G(5)(iv)(B), if the has not claimed exemption in Previous years. Since the assessee has claimed exemption in Previous years, therefore this application u/s 80G is not allowable. Further, the assessee is not fulfilling the stipulated conditions prescribed for filing a for approval in Form 10AB. In view of the above this application hereby rejected” Before us, the Ld. counsel for the assessee referred to the ordinate Bench in the case of Rotary Charity Trust in ITA No. 6133/Mum/2024 wherein the Tribunal in identical circumstances restored the matter back to the Ld. CIT(E) for considering the application of the registration for regular approval. The relevant finding of the Tribunal is reproduced as under: 5. We have heard the parties and perused the material on record. Before we proceed to examine the facts in assessee's case, it is important to first look at the relevant provisions of first proviso to subsection (5) of section 80G which read as under Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval, (i) where the institution or fund is approved under clause (vi) (as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the Ist day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the Aashray Seva Kendra 3 ITA No. 461/MUM/2025 of the case, it is 14.09.2015. Further, the assessee has already claimed exemption by filing ITR-7 before applying for approval in Form 10AB (Previous Years). 4. As per above mentioned provision of Income Tax Act, the assessee has to file Form 10AB u/s 80G(5)(iv)(B), if the assessee has not claimed exemption in Previous years. Since the assessee has claimed exemption in Previous years, therefore this application u/s 80G is not allowable. Further, the assessee is not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. In view of the above this application Before us, the Ld. counsel for the assessee referred to the ordinate Bench in the case of Rotary Charity Trust in wherein the Tribunal in identical circumstances restored the matter back to the Ld. CIT(E) for considering the application of the registration for regular approval. The relevant finding of the Tribunal is reproduced as under: and perused the material on record. Before we proceed to examine the facts in assessee's case, it is important to first look at the relevant provisions of first proviso to subsection (5) of section 80G which read as under - fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,- (i) where the institution or fund is approved under clause (vi) (as before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020], within three months from the Ist day of April, 2021; (ii) where the institution or fund is approved and the period of xpire, at least six months prior to expiry (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier: [or] [(iv) [*] where activities of the institution or fund have (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced [*** Jat any time after the commencement of such activities:] 6. Assessee, in terms of the above provisions, first applied for a provisional approval under sub proviso to subsection (5) of section 80G within (refer clause 2 in Form 10A) and was given the provisional registration up to AY 2024 for final approval in Form 10AB, it is noticed that assessee has once again mentioned same section i.e. sub (iv) of first proviso to subsection (5) of section SOG whereas the correct section code under which the assessee ought to have selected is clause (iii) of first proviso to subsection (5) of section 80G. We also noticed that ld. CIT(E) has trea as one filed under sub subsection (5) of section 80G and accordingly rejected the application for not fulfilling the stipulated conditions prescribed for filing application for approval in F 6.1. From the perusal of forms filed and the facts of the case, in our considered view, there is merit in claim of the ld. AR that assessee has selected the wrong section code inadvertently while filing the application for final registration in F Further, we notice that assessee did not have the opportunity of being heard before ld. CIT(E) due to incorrect course of action advised, which otherwise assessee might have explained the facts to avoid the impugned rejection. In view of these discussions and respectfully following the above decision of the Kolkata Bench in the case of North Eastern Social Research Centre (supra), we remit the issue back to the file of ld. CIT(E), with a direction to grant final approval to assessee under Clause (iii) to first proviso to section 80G(5) of the Act, if assessee is otherwise found eligible. We also direct ld. CIT(E) to decide the application of the assessee for final approval as quickly as possible before the expiry of the provisional approval granted order to enable the assessee to have the benefit of section 80G without any break. It is ordered ITA No. 461/MUM/2025 provisional approval or within six months of commencement of its tivities, whichever is earlier: [or] [(iv) [*] where activities of the institution or fund have-- (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; B) commenced [*** Jat any time after the commencement of such Assessee, in terms of the above provisions, first applied for a provisional approval under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G within and subsequently (refer clause 2 in Form 10A) and was given the provisional registration up to AY 2024-25 on 04.04.2022. In the application for final approval in Form 10AB, it is noticed that assessee has once again mentioned same section i.e. sub-clause (B) of clause (iv) of first proviso to subsection (5) of section SOG whereas the correct section code under which the assessee ought to have selected is clause (iii) of first proviso to subsection (5) of section 80G. We also noticed that ld. CIT(E) has treated the application as one filed under sub-clause (B) of clause (iv) of first proviso to subsection (5) of section 80G and accordingly rejected the application for not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. 6.1. From the perusal of forms filed and the facts of the case, in our considered view, there is merit in claim of the ld. AR that assessee has selected the wrong section code inadvertently while filing the application for final registration in F Further, we notice that assessee did not have the opportunity of being heard before ld. CIT(E) due to incorrect course of action advised, which otherwise assessee might have explained the facts to avoid the impugned rejection. In view of these scussions and respectfully following the above decision of the Kolkata Bench in the case of North Eastern Social Research Centre (supra), we remit the issue back to the file of ld. CIT(E), with a direction to grant final approval to assessee under Clause iii) to first proviso to section 80G(5) of the Act, if assessee is otherwise found eligible. We also direct ld. CIT(E) to decide the application of the assessee for final approval as quickly as possible before the expiry of the provisional approval granted order to enable the assessee to have the benefit of section 80G without any break. It is ordered accordingly.” Aashray Seva Kendra 4 ITA No. 461/MUM/2025 provisional approval or within six months of commencement of its (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment B) commenced [*** Jat any time after the commencement of such Assessee, in terms of the above provisions, first applied for a clause (B) of clause (iv) of first and subsequently (refer clause 2 in Form 10A) and was given the provisional 25 on 04.04.2022. In the application for final approval in Form 10AB, it is noticed that assessee has B) of clause (iv) of first proviso to subsection (5) of section SOG whereas the correct section code under which the assessee ought to have selected is clause (iii) of first proviso to subsection (5) of section ted the application clause (B) of clause (iv) of first proviso to subsection (5) of section 80G and accordingly rejected the application for not fulfilling the stipulated conditions prescribed 6.1. From the perusal of forms filed and the facts of the case, in our considered view, there is merit in claim of the ld. AR that assessee has selected the wrong section code inadvertently while filing the application for final registration in Form 10AB. Further, we notice that assessee did not have the opportunity of being heard before ld. CIT(E) due to incorrect course of action advised, which otherwise assessee might have explained the facts to avoid the impugned rejection. In view of these scussions and respectfully following the above decision of the Kolkata Bench in the case of North Eastern Social Research Centre (supra), we remit the issue back to the file of ld. CIT(E), with a direction to grant final approval to assessee under Clause iii) to first proviso to section 80G(5) of the Act, if assessee is otherwise found eligible. We also direct ld. CIT(E) to decide the application of the assessee for final approval as quickly as possible before the expiry of the provisional approval granted in order to enable the assessee to have the benefit of section 80G 2.2 Since in the instant case applied under the sub sub-section 5 of section 80G as against the clause relevant provision. Therefore, respectfully following the finding of the Tribunal (supra), we restore the matter back to the file of the Ld. CIT(E) directing to approval under relevant the Act, if otherwise the assessee approval. The grounds of appeal of the assessee are accordingly allowed. 3. In the result, the appeal of the assess statistical purposes. Order pronounced in the open Court on Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 07/03/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. 461/MUM/2025 Since in the instant case also, the assessee inadvertently applied under the sub-clause (B) of clause (iv) of first proviso to n 5 of section 80G as against the clause relevant provision. Therefore, respectfully following the finding of the Tribunal (supra), we restore the matter back to the file of the Ld. consider the application of the assessee relevant clause of first proviso to section 80G(5) of if otherwise the assessee meets conditions prescribed . The grounds of appeal of the assessee are accordingly In the result, the appeal of the assessee is allowed for statistical purposes. nounced in the open Court on 07/03/2025. Sd/- Sd/ (KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Aashray Seva Kendra 5 ITA No. 461/MUM/2025 , the assessee inadvertently clause (B) of clause (iv) of first proviso to n 5 of section 80G as against the clause (iii) of the relevant provision. Therefore, respectfully following the finding of the Tribunal (supra), we restore the matter back to the file of the Ld. consider the application of the assessee for first proviso to section 80G(5) of conditions prescribed for . The grounds of appeal of the assessee are accordingly ee is allowed for /03/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "