PV SHETTY FOUNDATION ,MUMBAI V. CIT(EXEMPTION), MUMBAI

ITA 1374/MUM/2025

AI Insights

The case involves the PVShetty Foundation appealing against the rejection of their application for registration under Section 80G of the Income Tax Act, 1961, by the Commissioner of Income Tax (Exemptions), Mumbai. The rejection was based on an alleged incorrect filing under the wrong sub-clause of the first proviso to Section 80G(5), which the Foundation argued was a clerical error. The Tribunal found that the Foundation was not given a fair opportunity to be heard, which is a violation of the principles of natural justice, and thus set aside the CIT(E)'s decision, restoring the application to its original number for reconsideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312773 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Bonafide mistake
• Section: 12; 80G

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 1374/MUM/2025 (Assessment Year: 2024-2025) PVShetty Foundation 3rd Floor, Plot -1/110, Anand Niwas, Dr. E. Moses Road, Worli, Mumbai – 400018. Maharashtra [PAN:AAMCP9296L] …………. Appellant Commissioner of Income Tax (Exemptions), Mumbai Room No.601, 6th Floor, MTNL Tel. Ex Building, Cumballa Hills, Peddar Road, Mumbai – 400026. Maharashtra. Vs …………. Respondent Appearance For the Appellant/Department For the Respondent/Assessee : : Miss Kinjal Bhuta Shri R. A. Dhyani Date Conclusion of hearing Pronouncement of order : : 08.04.2025 29.04.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 28/12/2024, passed by Commissioner of Income Tax (Exemption), Mumbai [hereinafter referred to as the ‘CIT(E)’] whereby the application filed by the Assessee in Form No.10AB seeking registration under Section 80G of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] was rejected. 2. The Assessee has raised following grounds of appeal : “1. The Learned CIT(E) erred in rejecting the application for final registration u/s.80G(5) of the Income Tax Act, 1961 without granting any opportunity to be heard in this matter as required under the second proviso to section 80G(5) of the ITA No. 1374/Mum/2025 Assessment Year: 2024-25 2 Act. That not giving opportunity is against the principle of natural justice and the order may be set aside. 2. The Ld. CIT(E) erred in rejecting the application relying on conditions specified in sub clause (B) of first proviso to section 80G(5), that the application can be made under this clause only if the trust has not claimed any exemption u/s. 11, 12 or 10(23C) before the date of application. The Ld. CIT(E) erred in not appreciating that the said condition has been deleted from sub-clause B with effect from 01 October, 2024 and rejection owing to non-compliance to such condition is invalid and illegal. 3. The Ld. CIT(E) erred in rejecting the registration u/s. 80G merely on an inadvertent error in selecting the correct sub- section while filing the application for final registration in Form 10AB leaving the appellant remedy less. That rejecting the application based on an error/technical irregularity is unjustified. 3. We have heard both the sides and have perused the material on record. 4. The grievance of the Assessee is that the application filed by the Assessee for seeking approval under Section 80G of the Act was rejected without taking into consideration the documents and details filed along with the application which would should show that the Application was intended to be made under Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act. It was submitted that since the Assessee was not granted opportunity, the Assessee was not able to explain before the Learned CIT(E) that an unintentional mistake had occurred while filing the application form as the Assessee had incorrectly stated in the application form that the application was being filed under Clause (iv)(B) of 1st Proviso to 80G(5) of the Act [instead of Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act]. For the aforesaid reason alone the application filed by the Assessee was rejected. Per contra, it was submitted by the Learned Departmental Representative that admittedly the Assessee had committed a mistake while filling up ITA No. 1374/Mum/2025 Assessment Year: 2024-25 3 the form and therefore, the application was rightly rejected. 5. Taking into consideration overall facts and circumstances of the present case we deem it appropriate and in the interest of justice to grant another opportunity to the Assessee to make out a case for grant of approval in terms of Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act. Accordingly, we set aside the Order, dated 28/12/2024, passed by the Learned CIT(E) and restore the application filed by the Assessee to its original number. The Learned CIT(E) is directed to either treat the application filed by the Assessee as application filed under Sub-Clause (iii) of First Proviso to Section 80G(5) of the Act or grant opportunity to the Appellant to file rectified application. It is clarified that the Learned CIT(E) would be at liberty to decide upon the merits of the application as per law after granting the Assessee an opportunity to make submission and file documents/details in support of the application. The Assessee is directed to file all documents and details along with rectified application before the Learned CIT(E) forthwith. 6. In terms of paragraph 5 above, the appeal preferred by the Assessee is allowed for statistical purposes. Order pronounced on 29.04.2025. Sd/- Sd/- (Om Prakash Kant) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंकDated :29.04.2025 Milan, LDC ITA No. 1374/Mum/2025 Assessment Year: 2024-25 4 आदेशकीप्रतितितिअग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी/ The Appellant 2. प्रत्यर्थी/ The Respondent. 3. आयकरआय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीयप्रदिदनदध ,आयकरअपीलीयअदधकरण ,म ुंबई/ DR, ITAT, Mumbai 6. ग र्डफ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपिप्रदि //True Copy// उप/सह यकपुंजीक र /(Dy./Asstt.Registrar) आयकरअपीलीयअदधकरण, म ुंबई / ITAT, Mumbai "