Application for Permanent Registration Cannot be Rejected for Selecting Wrong Form while Filling Application: ITAT Restores Matter to CIT (E) [Read Order]

The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) held that on account of the mistake committed by the assessee, while filing the application i.e.  error in submitting the correct application cannot be the reason to reject permanent registration under Section 80G(5) of the Income Tax Act, 1961.

The assessee Telangana State Chapter Indian Radiological & Imaging Association is a society affiliated to Indian Radiologican and Imaging Association. The assessee had filed e-application for grant of approval under Section 80G (5) of the Income tax Act in form 10A. At the time of filing the application, the assessee at Serial No. 2 of the application had selected the option ‘section code-11’ instead of ‘section code-12’ in form 10A.

The Commissioner of Income Tax (Exemption) [CIT (E)] has issued the letter calling for various documents from the assessee including the Memorandum of Association/Trust Deed. The assessee had submitted the response to the said letter along with the Memorandum of Association/Trust Deed.

The application of the assessee has been rejected by the CIT(E) on the pretext that the assessee was having registration upto assessment year 2024-25. And further the assessee have not submitted the document for verification, aggrieved by the order passed by the CIT(E), the assessee is in appeal before ITAT.

The Authorised Representative (AR) T. Rajendra Prasad, had submitted that there was lack of clarity at the time of filing the application by the assessee, as on account of newly introduced forms, required the assessee to apply for grant of provisional/final approvals. Further it was submitted that selection of wrong column/form by the assessee was unintentional and the assessee was willing to file all the details as may be required for grant of final approval.

The Departmental Representative (DR) K. Madhusudan, relied upon the order passed by the lower authorities.

The Bench comprising of Rama Kanta Panda (Accountant Member) and Laliet Kumar (Judicial Member) observed that though the assessee had committed a mistake in selecting the wrong section code 11 while making an application at the first instance, however, for such a mistake, the permanent registration cannot be denied.

Further it noted that the respondent is also duty bound to cross-verify the details, submitted by the assessee at the time of issuance of provisional certificate and should have issued a notice at that time by pointing out the wrong selection of section code by the assessee. Thus, the assessees as well as Revenue both are at fault.

Hence, the Tribunal remand back the matter to the file of the CIT(E) with a direction to permit the assessee to rectify the mistake in submitting the application form and with a further direction to consider the application of assessee for grant of permanent registration.

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To Read the full text of the Order CLICK HERE

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