Bonafide Mistake Committed By Assessee While Applying For Registration In Form 10AB Instead Of Form 10A, Merits To Be Condoned: Hyderabad ITAT

The Bench of the ITAT comprising of Rama Kanta Panda (Vice President) and K.Narasimha Chary (Judicial Member) observed that “Be that as it may, the fact remains that the assessee did not avail the opportunity of extension of time for filing application in Form 10A, if really its intention is to apply for 02-Sub clause (i) of clause (ac) of sub-section (1) of section 12A of the Act, by bringing the mistake to the notice of the authorities, since the assessee holds the registration under section 12A of the Act. When the CBDT took cognizance of the matter and by way of circulars extended the due date for filing Form 10A, it cannot be said that the learned CIT(E) can exercise jurisdiction to condone the delay in applying the Form 10A on the ground of mistake, because the time extended for such purpose by the CBDT expired by 30/09/2023.” (Para 12)

The Bench further added that “Though the assessee did not plead before the Revenue authorities by that day about the mistake of selection of wrong section code while applying in Form 10AB and seek rectification, the request of the assessee for regular registration is pending by that date. Though in a wrong Form, the request of the assessee was pending before the due date. In this peculiarity of the circumstances, we deem it just and proper to condone the mistake committed by the assessee while applying registration in Form 10AB instead of Form 10A and also by making a selection of wrong section code, namely, 02-Sub clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act instead of 02-Sub clause (i) of clause (ac) of sub-section (1) of section 12A of the Act.” (Para 13)

As per the brief facts of the case, the assessee trust obtained registration u/s 12A(a) by order u/s 12AA(1)(b)(i). Subsequently, the assessee sought and granted provisional registration under 12A(1)(ac)(vi) in form No. 10AC. Again, the assessee applied in Form 10AB u/s 12A(1)(ac)(iii). The CIT(E) observed that the assessee applied under 12A(1)(ac)(vi) instead of 12A(1)(ac)(i), since the assessee holds registration u/s 12A. Assessee submitted that by mistake, on an earlier occasion, the wrong code u/s 12A(1)(ac)(iv) was selected instead of 12A(1)(ac)(i), therefore, the mistake may be excused and registration may be done.

The CIT(E) rejected the application filed in Form 10AB for regular registration u/s 12AB, holding it to be infructuous and barred by limitation. Hence, the assessee filed this appeal.

The Bench noted that it is an undisputed fact that, having possessed the registration u/s 12A, the assessee was supposed to make an application u/s 12A(1)(ac)(i) in which event, the assessee had to submit the application in Form 10A vide Rule 17A.

The Bench observed that if the assessee applying by selecting the wrong section code as 02-Sub clause (vi) of clause (ac) of sub-section (1) of section 12A was a mistake, still, it is a mistake also by applying for registration in Form 10AB.

The Bench stated that if the assessee wanted to apply under 02-Sub clause (i) of clause (ac) of sub-section (1) of section 12A on any occasion, the proper form was not Form 10AB, but it should be Form 10A only.

Therefore, on finding a scope to condone the mistake of the assessee, ITAT allowed the assessee's appeal.

Counsel for Appellant/Taxpayer: A.V. Raghuram

Counsel for Respondent/Department: K. Madhusudan

Case Title: Mandava Foundation verses Income Tax Officer

Case Number: ITA No. 47/Hyd/2024

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