Facts of the Case

The assessee, St. Thomas Syro Malabar Catholic Church, is a charitable institution engaged in religious and charitable activities. It was originally registered under Section 12AA with effect from Assessment Year 2020-21. Pursuant to amendments introduced by the Taxation and Other Laws Act, 2020, the assessee applied in Form 10A and was granted provisional registration under Section 12A from Assessment Years 2021-22 to 2023-24. Thereafter, the assessee filed an application in Form 10AB on 29.11.2024 seeking registration for Assessment Year 2025-26. The CIT (Exemption) rejected the application on the ground that incorrect and contradictory information had been furnished, particularly relating to claim of exemption under Section 11 in earlier years. Aggrieved by the rejection order passed in Form 10AD, the assessee preferred an appeal before the Tribunal.

Issues Involved

Whether rejection of Form 10AB for registration under Section 12A was justified when the assessee was already holding valid provisional registration, whether an inadvertent error in filing Form 10AB or in furnishing information could justify denial of registration, and whether the order of the CIT (Exemption) was contrary to principles of natural justice.

Petitioner’s Arguments

The assessee contended that it was a bona fide charitable institution duly registered under Section 12AA and later under Section 12A on a provisional basis, and that exemption under Sections 11 and 12 had been rightly claimed during the period of valid registration. It was submitted that the filing of Form 10AB involved inadvertent errors, including selection of assessment year, and that such procedural mistakes could not defeat substantive statutory rights. It was further argued that the CIT (Exemption) had not raised any objection regarding genuineness of objects or activities of the trust and therefore rejection of registration was unjustified.

Respondent’s Arguments

The Revenue supported the order of the CIT (Exemption) and contended that the assessee had furnished incorrect information in Form 10AB and the accompanying undertaking, justifying rejection of the application for registration under Section 12A.

Court Order / Findings

The ITAT Kolkata held that the issue involved in the present appeal was squarely covered by the decision of the coordinate bench in the assessee’s own case for an earlier year. The Tribunal observed that the assessee was already registered prior to the amendments introduced in 2020 and was entitled to registration for a block of five years. It was further held that the filing of Form 10AB for an incorrect assessment year was an inadvertent procedural error and that the assessee was entitled to seek withdrawal of such form. The Tribunal held that denial of registration on account of such mistake would result in grave injustice and defeat the beneficial provisions applicable to genuine charitable institutions. Relying on settled judicial principles permitting raising of pure legal grounds at the appellate stage, the Tribunal set aside the order of the CIT (Exemption).

Important Clarification

The Tribunal clarified that procedural lapses or inadvertent mistakes in filing electronic forms cannot override substantive rights of charitable institutions where genuineness of objects and activities is not in dispute. Registration under Section 12A is a beneficial provision and must be administered in a manner that advances the object of the law rather than defeating it on technical grounds.

Final Outcome

The appeal filed by the assessee was allowed. The order passed by the CIT (Exemption) rejecting the application in Form 10AB was set aside, and the assessee was directed to be granted registration under Section 12A in accordance with law.

Source Link- https://itat.gov.in/public/files/upload/1768297867-k8XAaW-1-TO.pdf

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