SHYAM BABA SEVA TRUST,KOLKATA V. CIT (EXEMPTION), KOLKATA

ITA 1443/KOL/2024

AI Insights

The case involves the Shyam Baba Seva Trust appealing against the decision of the Commissioner of Income Tax (Exemptions), Kolkata, which had rejected their application for registration under section 80G of the Income Tax Act, 1961. The rejection was based on the incorrect selection of the section code in the application form, which the Trust later clarified was an inadvertent error. The Tribunal found that the Commissioner should have allowed the Trust an opportunity to correct the error rather than rejecting the application outright.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46791 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2025
• 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
• Keywords: Set aside; Opportunity of being heard
• Section: 80G

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री जॉजज माथान, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 1443/KOL/2024 Assessment Year: 2021-2025 Shyam Baba Seva Trust Vs. CIT (Exemption), Kolkata (Appellant) (Respondent) PAN: ABBTS8130K Appearances: Assessee represented by : None. Department represented by : Praveen Kishore, CIT (DR). Date of concluding the hearing : February 26th, 2025 Date of pronouncing the order : March 24th, 2025 ORDER PER BENCH: This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Exemptions)-Kolkata [hereinafter referred to as the “Ld. CIT (Exemption)”] passed in respect of registration u/s 80G of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2021-2025 dated 27.02.2024. 2. The assessee is in appeal raising the following grounds of appeal: Page | 2 I.T.A. No.: 1443/KOL/2024 Assessment Year: 2021-2025 Shyam Baba Seva Trust. “1. That the Ld. CIT(E) erred in failing to grant registration only on a mechanical ground that registration application was filed under clause ii of the first proviso to section 80G(5) instead of clause iii even when such inadvertent was already clarified by the assessee in subsequent clarifications. 2. That the appellant craves to add, delete or modify any grounds of appeal in the course of hearing.” 3. Brief facts of the case are that the assessee had filed an application for registration u/s 80G(5)(ii) of the Act in Form No. 10AB which was found to be prima facie non-maintainable and accordingly vide letter dated 03.01.2024, certain clarifications were sought from the assessee. The Ld. CIT (Exemption) has rejected the application by mentioning as under: “On 23.01.2024 the assessee submitted its reply. From the reply of the assessee it is evident that the assessee had selected the wrong section code while applying Form 10AB. Assessee can file afresh Form 10AB selecting the correct section code. Accordingly the application filed by the assessee is treated as non-maintainable and for statistical purpose the application filed by the assessee is treated as 'rejected'. However, no adverse inference is drawn against the assessee.” 4. The assessee contends that the Ld. CIT (Exemption) erred in failing to grant registration only on a mechanical ground that registration application was filed under clause (ii) of first proviso to section 80G(5) of the Act instead of under clause (iii), even though the assessee had clarified in subsequent clarifications. We observe from the order of the Ld. CIT (Exemption) that the application was rejected as the assessee had selected the wrong clause/section code and the same was treated as non-maintainable. However, no adverse inference was drawn against the assessee. The assessee has stated that this inadvertent error was already clarified by the assessee in subsequent clarifications. That being so, the Ld. CIT (Exemption) ought to have granted an opportunity Page | 3 I.T.A. No.: 1443/KOL/2024 Assessment Year: 2021-2025 Shyam Baba Seva Trust. for correction of the wrong section code which was an inadvertent and technical error and only on this ground the grant of approval ought not to have been rejected if the assessee were otherwise eligible. Accordingly, the order of the Ld. CIT (Exemption) is set aside with the direction that the application filed may be treated as filed under the correct section code after allowing an opportunity to the assessee to correct the wrong section code by mentioning of correct code in its place in the application, either by way of correction in the original application or by way of a separate application which shall be deemed to be filed as on the date of filing the original application. Thereafter, the Ld. CIT (Exemption) shall grant an opportunity of being heard to the assessee and the assessee shall file the required details without seeking unnecessary adjournments and the Ld. CIT (Exemption) shall pass an order in accordance with law, as no adverse inference had been drawn against the assessee but the application was rejected only on technical ground of wrong mentioning of section code. The Ld. DR did not object to setting aside the order of the Ld. CIT (Exemption) and granting another opportunity to the assessee. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 24th March, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 24.03.2025 Bidhan (P.S.) Page | 4 I.T.A. No.: 1443/KOL/2024 Assessment Year: 2021-2025 Shyam Baba Seva Trust. Copy of the order forwarded to: 1. Shyam Baba Seva Trust, 58, A Block, Lake Town, Bangur Avenue S.O, North 24 Parganas, Kolkata, West Bengal, 700055. 2. CIT (Exemption), Kolkata. 3. CIT(A)- 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "