Application seeking Approval under section 80G(5)(i) Rejected on technical ground without providing Time for Rectification: ITAT allows Rectification [Read Order]

Alumni Association, the assessee challenged the order dated 17/12/2024 of the Commissioner of Income Tax (Exemption) whereby the application of the assessee seeking approval under section 80G of the Act, 1961 was rejected.

The assessee has submitted that the Commissioner of Income Tax (Exemption) has rejected the application on technical ground for mentioning the section 80G(5)(i) in the application, instead of 80G(5)(iv). She has further submitted that the Commissioner of Income Tax (Exemption) has not pointed out this defect/mistake in the application before passing the impugned order and therefore, the assessee was not given an opportunity to rectify the mistake if any in the application filed by the assessee.

She has referred to the record filed by the assessee in response to the notice issued by the Commissioner of Income Tax (Exemption) and submitted that the assessee comply with the notices issued by the CIT(E) by filing the relevant record. However, the application was rejected on technical ground not deciding the same on merit. Thus, the AR has pleaded that an appropriate direction may be passed for deciding the application of the assessee for approval under section 80G of the Act, 1961 on merits.

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On the other hand, the DR has raised no objection if the matter is remanded to the record of the Commissioner of Income Tax (Exemption) for re-consideration and deciding the application on merits.

The tribunal found that earlier the assessee was having registration under section 80G of the Act, 1961 prior to 1/4/2021 and after the amendment, the assessee again filed the application for approval under section 80G which was rejected by the CIT (E) while passing the impugned order. The finding of the CIT (E) in para 3 of the impugned order is as under:

The application was rejected only on the ground that there is a mistake in section mentioned in the application as 80G(5)(i) instead of 80G(5)(iv). It is also apparent from the record that the assessee was also not given defect memo or show-cause notice for rectifying the mistake in the application. Therefore, rejection of the application on this technical ground without giving an opportunity to the assessee to rectify this typographical mistake in the application is not justified.

The two member bench of Shri Vijay Pal Rao, Vice-President and Shri Manjunatha, G. Accountant Member has set aside the impugned order and the matter is remanded to the record of the CIT (E) for reconsideration of the application on merits. The assessee is also directed to rectify the mistake in mentioning the wrong section in the application.

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