Clerical Error Can't Sink Charity Application, ITAT Sides with Trust in Registration Row [Read Order]
During the proceedings, the departmental representative argued that the CIT(E) did not have the power to suo moto correct the section in the digital filing system and that the trust should have simply filed a new application
Charity Application
Charity Application
The Income Tax Appellate Tribunal (Agara Bench) held that a mere clerical error in quoting an incorrect section of the Income Tax Act cannot be grounds for the rejection of a trust’s application for registration. The Tribunal emphasized that a rightful claim cannot be denied due to a technical oversight, setting aside the order of the Commissioner of Income-Tax(Exemption).
Emergency Charitable Trust, located in Basant Vihar, Gwalior, which had filed an application for registration under Section 12AB of the Income Tax Act, 1961. The trust’s application was rejected by the CIT (Exemption), Bhopal, solely because it had inadvertently mentioned an incorrect legal provision; Section 12A(1)(ac)(vi) B; instead of the correct clause, Section 12A(1)(ac)(iii).
The trust had submitted a physical application and requested the authority to allow a correction of the error, but the CIT(E) declined and advised the assessee to file a fresh application digitally.
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During the proceedings, the departmental representative argued that the CIT(E) did not have the power to suo moto correct the section in the digital filing system and that the trust should have simply filed a new application.
However, the trust’s advocate, Alok Dhingra, countered that a fresh application would only grant registration prospectively, causing irreparable loss to the trust for the period covered by the original application.
The Tribunal, comprising Judicial Member Sunil Kumar Singh and Accountant Member Brajesh Kumar Singh, found merit in the trust’s arguments. The bench referred to settled law that a mistake in stating the correct legal position should not lead to the rejection of an application.
The Tribunal restored the matter to the file of the CIT(E), directing that the trust be permitted to rectify the clerical error by mentioning the correct provision in its original application. A fresh order is to be passed thereafter.
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