The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Commissioner of Income Tax ( Exemption ) [CIT(E)] to reconsider the 80G registration application under Income Tax Act,1961 of the assessee, on merits despite a clerical error and delay in filing the appeal. Sauhard,appellant-assessee,filed an appeal against the order passed by the CIT(E) on March 17, 2023, under section 80G of the Act, which rejected its application for final registration. The rejection was based on a clerical error in categorizing the trust’s expenses as religious rather than charitable, despite the assessee clarifying that its activities were entirely charitable in nature. Know Practical Aspects of Tax Planning, Click Here

The assessee had been granted provisional registration under section 80G(5)(iv) for the period from 2021-22 to 2024-25. After filing Form 10AB for final registration, the CIT(E) raised a questionnaire regarding discrepancies in the details provided. The assessee responded to the queries but was not given an opportunity to clarify the discrepancies before the final rejection was issued on March 17, 2023. After the initial rejection, the assessee re-applied for final registration on March 29, 2023. However, this second application was rejected on August 8, 2023, due to the application being filed under the wrong sub-section (80G(5)(ii) instead of 80G(5)(iii)). The system did not allow the assessee to refile under the correct section, resulting in the rejection being treated as non-maintainable. The appeal was delayed by 193 days, which the assessee explained was due to a misunderstanding that it could reapply after the rejection of the initial application. The Tribunal condoned the delay after considering the explanation provided in the affidavit and determined that the delay was not intentional. Know Practical Aspects of Tax Planning, Click Here

The assessee also referred to a similar case ( Uttar Gujarat Shikshan Seva Trust ) where the ITAT had condoned the delay and remanded the matter for fresh adjudication on merits. The tribunal, after reviewing the facts, found that the rejection was primarily due to a clerical mistake and decided that no prejudice would be caused to the Revenue by allowing the appeal. The two member bench comprising T.R. Senthil Kumar ( Judicial Member ) and Dr.BRR Kumar ( Accountant Member ) set aside the CIT(E)’s order and directed the CIT(E) to reconsider the application on merits, granting the assessee a reasonable opportunity to represent its case. In conclusion ,the appeal was allowed for statistical purposes.