SANTOSH FOUNDATION,RAMPURA PHUL V. CIT(EXEMPTIONS), CHANDIGARH

ITA 505/ASR/2024

AI Insights

The case involves M/s Santosh Foundation appealing against the decision of the Commissioner of Income Tax (Exemptions), Chandigarh, which denied their application for registration under section 80G(5) of the Income Tax Act on a technical ground. The foundation had mistakenly mentioned the wrong clause in their application form, which led to the rejection. The tribunal considered various precedents and decided that such a clerical mistake should not lead to the denial of registration, emphasizing the principles of natural justice and the intent of the law.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31750 (ITAT-AMRITSAR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2024-2025
• Other Referred Cases: Harbol Cooperative Agricultural Service Society Limited, Kangra vs. ITO, Shree Swaminarayan Gadi Trust vs. CIT (Exemptions)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAM KANT GARG
• Assessee Lawyers: SUDHIR SEHGAL
• Keywords: Bonafide belief; Principle of natural justice
• Section: 12A; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, AMRITSAR BEFORE SHRI UDAYAN DAS GUPTA, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 505/ASR/2024 Ǔनधा[रण वष[ / Assessment Year : 2024-25 M/s Santosh Foundation, # 2, Friends Enclave, Near Star Resorts, Bye Pass Road, Rampura Phul, Amritsar 151003 Vs. बनाम The CIT (Exemption), Chandigarh èथायी लेखा सं./PAN NO: AAQTS1243M अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( Hybrid Hearing ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Sudhir Sehgal, Advocate राजèव कȧ ओर से/ Revenue by : Shri Anupam Kant Garg, CIT DR सुनवाई कȧ तारȣख/Date of Hearing : 19.12.2024 उदघोषणा कȧ तारȣख/Date of Pronouncement : 31.12.2024 आदेश/Order Per Krinwant Sahay, AM: Appeal in this case has been filed by the Assessee against the order dated 21.08.2024 passed by Commissioner of Income Tax (Exemptions), Chandigarh, [herein referred to as CIT (E)’] for A.Y. 2024-25. 508-Amritsar--2024 Santosh Foundation, Amritsar 2 2. Grounds of appeal are as under:- 1. On the facts and circumstances of the case as well as in law, the Learned Commissioner of Income Tax (Exemptions) has erred in cancelling application in Form No I0AB being not maintainable as tiled under wrong clause without considering explanation furnished on 16-07-2024. As such, registration disallowed under section 80G (5) of the Act on technical ground is unjustified and uncalled for. The same be allowed. 2. On the facts and circumstances of the case as well as in law, the Learned Commissioner of Income Tax (Exemptions) has erred in rejecting the application for approval under section 80G(5) of the Act without considering the same on merits as the trust fulfils all the conditions laid down in the Act and eligible for approval under section 80G(5) of the Act. Therefore, approval under sub-section (5) of section 80G be granted. 3. That the appellant craves leave to add or amend any grounds of appeal before the appeal is finally heard or disposed of. 2. During the proceedings before us, ld. Counsel for the Assessee explained that the ld. CIT(E) has disallowed registration u/s 80G(5) of the technical ground by rejecting the application in Form No. 10AB for the reason that the exemption was sought under wrong clause. In this regard, the ld. Counsel has filed his written submissions, which is as under:- 508-Amritsar--2024 Santosh Foundation, Amritsar 3 “1…….It is respectfully submitted that in this case provisional registration's been granted under section 12A and 80G of the Income Tax Act to the institution/fund upto assessment year 2024-25. 2. That the assessee was under the bonafide belief that fresh application has to be filed on or before 31-03-2024, accordingly application under both the section has been filed on 30-03-2024. However, at the time of filing of application, section code has been mentioned but the section code under section 12A ha been correctly mentioned but section of 80G has been mentioned as clause (ii) instead of clause (iii) by typing mistake. Relevant section codes are reproduced here as under for both the applications: - Under section 12A 02-Sub clause (iii) of clause (ac) of sub- section (1) of section 12A Under section 80G 13-Clause (ii) of first proviso to sub- section (5) of section 80G In view of the above facts, it is, therefore, requested that if is a clerical mistake, the same may kindly be ignored and the registration to the institution may kindly be granted as para (4) of the Circular dated 25-04-2024 by treating it as valid application.” 3. The ld. DR relied on the order of the CIT(E), Chandigarh 4. The ld. Counsel for the Assessee has further argued that there are a number of case laws based on the orders decided by various Tribunals 508-Amritsar--2024 Santosh Foundation, Amritsar 4 which categorically bring out that the Assessee should not be penalized and the application / registration should not be denied because of the wrong mentioning of the clause / section by the Assessee. In this regard, the ld. Counsel has brought on record various case laws some of which are as under: - 1. The Harbol Cooperative Agricultural Service Society Limited, Kangra vs. ITO, ITA No.158/Chd/2024 order dated 26.9.2024. 2. Shree Swaminarayan Gadi Trust vs. CIT (Exemptions) [2024] 162 taxmann.com 772 (Surat-Trib.) 5. We have considered the findings of the ld. CIT(E) and the submissions made by the Counsel of the Assessee during the proceedings before us. We find that the CIT(A) has denied registration on technical ground that the Assessee has sought it under wrong clause. We have also considered various decisions of the Coordinate Benches of the Tribunal on the issue of technicality of mentioning wrong clause for claiming registration / exemption and we find that there is a plethora of judgements which clearly bring out that an Assessee should not be penalized or its registration should not be denied for the simple reason that the registration sought was under wrong clause, therefore, we are of this view that natural justice the registration should not be denied to the Assessee. 508-Amritsar--2024 Santosh Foundation, Amritsar 5 Accordingly, the case is remanded back to the CIT(E) for fresh adjudication on this issue after giving reasonable opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(E). All pleas available under the law shall remain so available to the assessee. Ordered accordingly. 6. In the result, the appeal stands allowed for statistical purposes. Order pronounced on 31.12.2024. Sd/- Sd/- ( UDAYAN DAS GUPTA ) ( KRINWANT SAHAY ) Judicial Member Accountant Member “आर.क े.” आदेशकȧĤǓतͧलͪपअĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकरआयुÈत/ CIT 4. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयआͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[फाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar "