SHREE DURGA PARAMESHWARI EDUCATIONAL TRUST,BANGALORE V. COMMISSIONER OF INCOME TAX (EXEMPTIONS), BENGALURU

ITA 120/BANG/2025

AI Insights

The case involves Shree Durga Parameshwari Educational Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Bengaluru, rejecting their application for re-registration under section 12AB of the Income Tax Act, 1961. The rejection was primarily due to the incorrect selection of a section code in the application form. The Tribunal found that the Commissioner had not provided an opportunity for rectification of this mistake nor a personal hearing, which are required by the statute. The Tribunal noted that the trust's eligibility for registration was not in doubt and that the activities of the trust aligned with its objectives.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716886 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 22-01-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G. VENKATESH
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Bonafide mistake; Charitable institution
• Section: 12A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No.120/Bang/2025 Assessment year : 2025-26 Shree Durga Parameshwari Educational Trust, 198, Balagangadhar Nagar, Kengunte, Mallathahalli, Bangalore – 560 056. PAN: AAYTS 0074L Vs. The Commissioner of Income Tax (Exemptions), Bengaluru. APPELLANT RESPONDENT Appellant by : Shri G. Venkatesh, CA Respondent by : Shri Muthu Shankar, CIT(DR)(ITAT), Bengaluru. Date of hearing : 05.08.2025 Date of Pronouncement : 20.08.2025 O R D E R Per Soundararajan K, Judicial Member This appeal filed by the assessee is challenging the order dated 28.11.2024 of the ld. CIT(Exemptions) in which the registration sought for u/s. 12AB of the Income Tax Act, 1961 was rejected on the following grounds:- “1. The impugned order of the Commissioner of Income Tax (Exemptions) Bengaluru in Form No. 10AD dated 28.11.2024 rejecting the application in Form 10AB dated 29.06.2024 is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. The learned Commissioner of Income Tax (Exemptions) is not justified in passing the impugned order in gross violation of principles of natural justice without affording the appellant-Trust opportunity of being heard and also in not affording the opportunity of rectifying the Bonafide defect / mistake in the e-filing of the application or for re-filing of the Printed from counselvise.com ITA No.120/Bang/2025 Page 2 of 4 application for re-registration on the facts and circumstances of the case. 3. The learned Commissioner of Income Tax (Exemptions) erred in arbitrarily rejecting of the application of the appellant Trust for re- registration/renewal u/s 12AB of the Act on the facts and circumstances of the case. 4. The learned Commissioner of Income Tax (Exemptions) failed to appreciate that the appellant-Trust being granted registration u/s 12A of the Act after the insertion of section 12AB w.e.f 01.06.2020, the appellant-Trust has bonafide entertained the belief that it is only required to apply for renewal on lapse of 5 years of its registration. 5. The learned Commissioner of Income Tax (Exemptions) has completely disregarded the fact that the appellant is eligible for automatic re-registration for five years u/s 12AB(1)(a) r.w.s 12A(1)(ac)(1) of the Act on the facts and circumstances of the case. 6. The learned Commissioner of Income Tax (Exemptions) ought to have appreciated that the appellant-Trust does not gain anything by making mistake in selecting the application or in filling the application. Thus, it is only a bonafide mistake and the application having been made by the appellant within the extended time for making applications by the Trusts for re-registration under the new regime, the same requires to be considered on merits on the facts and circumstances of the case. 7. That, seen from any angle, the appellant-Trust is entitled for grant of re-registration u/s 12AB(1)(a) r.w.s 12A(1)(ac)(i) of the Act which may kindly be granted to the appellant-Trust for advancement of substantial cause of justice on the facts and circumstances of the case. 8. The appellant craves leave of this Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 9. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity.” 2. The brief facts of the case are that assessee is an educational trust originally got its provisional registration and subsequently the assessee sought for permanent registration u/s. 12AB of the Income Tax Act, 1961 [the Act]. The assessee filed application in Form 10AB on 29.6.2024 in which in sl.no.2, Printed from counselvise.com ITA No.120/Bang/2025 Page 3 of 4 the assessee had mentioned the section code as 12A(1)(ac)(ii) of the Act instead of 12A(1)(ac)(iii). The ld. CIT(Exemptions) rejected such application by stating that assessee has selected a wrong section code while applying in Form 10AB for registration u/s. 12AB of the Act. As against this order, the assessee is in appeal before this Tribunal. 3. At the time of hearing, the ld. AR submitted that the wrong mentioning of the section code is a bonafide mistake and therefore prayed that the application may be considered by the ld. CIT(Exemptions) afresh after treating the said application filed under the correct provision of the Act. The ld. AR also further submitted that the assessee trust is otherwise entitled for the registration. 4. The ld. DR relied on the order of the ld. CIT(Exemptions) and prayed that the appeal may be dismissed. 5. We have considered the arguments of both the sides and perused the material available on record. We have perused the order of the ld. CIT(Exemptions) in which the only defect pointed out is that the assessee had selected the wrong section code. We have also considered the statement made by the ld. AR that it is a mistake and if the CIT(Exemptions) was of the view that the assessee had selected a wrong section code, he could have called the assessee for rectification of the said defect before rejecting the said application. Further, we have also seen that the ld. CIT(Exemptions) has not granted any personal hearing before rejecting the said application, even though the statute requires that personal hearing should be granted. 6. It is not the case of the Revenue that the assessee is not a charitable institution to get registration under the provisions of the Act. Further the activities of the trust are also towards achieving the objects of the trust. The genuineness of the trust are also not in doubt by the authorities. In such Printed from counselvise.com ITA No.120/Bang/2025 Page 4 of 4 circumstance, the wrong quoting of the section in the application in Form 10AB could not be a reason for rejection, when there is no violations pointed out by the authorities. Before rejecting, the ld. CIT(Exemptions) could have also granted an opportunity to rectify the said mistake. Admittedly no such opportunity was also granted to the assessee. In such circumstances, we set aside the order of the ld. CIT(Exemptions) with a direction to treat the application filed by the assessee on 29.6.2024 as one filed under the correct provision of the Act and thereafter decide the same on merits in accordance with law. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Pronounced in the open court on this 20th day of August, 2025. Sd/- Sd/- ( LAXMI PRASAD SAHU ) ( SOUNDARARAJAN K ) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore, Dated, the 20th August, 2025. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. Printed from counselvise.com "