Wrong Sub-Clause Selected in Form 10AB u/s 80G(5): ITAT Restores Matter to CIT(E) for Fresh Consideration [Read Order]
The ITAT held that selecting the wrong sub-clause in Form 10AB under section 80G(5) was a curable error and could not be the sole reason for rejecting an application.
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) restored matter to the Commissioner of Income Tax (Exemption)[CIT(E)] after finding that the rejection of a fund approval application under section 80G(5) of Income Tax Act,1961, was solely due to selection of the wrong sub-clause in Form 10AB.
Conwest and Manjula S Badani Jain,appellant-assessee,through their counsel, submitted that due to a bona fide error, the trust had selected the wrong sub-clause while applying for fund approval under section 80G(5). The CIT(E) rejected the application solely on this ground. The counsel stated that the assessee had met all conditions and provided the required details in Form 10AB.
They requested that the matter be restored to the CIT(E) for consideration on merit and approval of the fund. They also sought condonation of a 25-day delay in filing, as the application was filed on 25.10.2024 instead of 30.09.2024, citing past decisions allowing delays for bona fide reasons.
The departmental counsel submitted that since the CIT(E) had not ruled on the delay in filing, the assessee could not raise the issue at this stage. However, they noted that the assessee could file a fresh application selecting the correct sub-clause.
The assessee’s counsel replied that the trust ran a charitable institution, including a hospital, and if approval was not considered from the original filing date, it could face difficulties in issuing donation receipts. They requested that the matter be restored to the CIT(E) for fresh consideration.
The two member bench comprising Pawan Singh ( Judicial Member) and Arun Khodpia (Accountant Member) considered the submissions and the order of the CIT(E). It noted that the main issue was the assessee’s selection of sub-clause (ii) instead of sub-clause (iii) while filing Form 10AB under section 80G(5).
The tribunal observed that similar errors in selecting the sub-clause were curable and not fatal, and rejection solely on this ground was unjustified, as also held in Chamber of Small INDL Associations vs CIT(E) (ITA Nos. 4833 & 4835/Mum/2025 dated 15.09.2025).
The appellate tribunal restored the appeal to the CIT(E) for consideration on merit, directing that the assessee be given an opportunity of hearing. Regarding the request for condonation of delay, the bench noted no adverse finding at this stage but expected the CIT(E) to take a sympathetic view if the delay arose while deciding the application. The ground of appeal was allowed for statistical purposes.
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