Bangalore ITAT: CIT(E) Cannot Deny Section 12AB Registration to Religious Trust on Basis of Clerical Error in Form 10AB — Dharmaram College Case

Background and Context

A significant ruling has emerged from the Income Tax Appellate Tribunal, Bangalore, in the case of Dharmaram College Vs ITO (ITAT Bangalore), which addresses a critical question: can the Commissioner of Income Tax (Exemptions) reject an application for registration under Section 12AB of the Income Tax Act, 1961, merely because the assessee inadvertently described itself as a charitable institution instead of a religious one in Form 10AB?

The answer, as per the Bangalore ITAT, is a clear no — especially when the Commissioner himself acknowledges the religious character of the institution.

About the Assessee — Dharmaram College

Dharmaram College is a well-established religious seminary operating under the Carmelites of Mary Immaculate (CMI) congregation, a religious order of the Christian Roman Catholic denomination. The institution functions as a residential seminary imparting theological and religious training to individuals aspiring to enter the priesthood of the CMI congregation.

The society was registered under the Karnataka Societies Registration Act, 1960, bearing registration No. 09/78-79. Key registration milestones include:

  • Initial registration under Section 12A of the Income Tax Act, 1961, granted vide registration number PRO.718/10A/Vol.AI/D.145 by the Commissioner of Income Tax, Karnataka-II, Bangalore, dated 22.05.1980.
  • Subsequent registration under sub-clause (i) of clause (ac) of sub-section (1) of Section 12A, bearing Unique Registration Number (URN): AAATD1013AE19801, dated 07/04/2022, effective from AY 2022-23 to AY 2026-27.
  • Registration under the Foreign Contribution (Regulation) Act, 2010, vide Registration Number 094420284, explicitly recognizing the society as a Religious Association.

The college offers structured religious and philosophical courses including Bachelor of Theology, Bachelor of Philosophy, Diploma in Philosophy, and Master in Philosophy, catering exclusively to members of religious orders.

The Trigger — Inadvertent Error in Form 10AB

On 16.06.2025, Dharmaram College filed an application in Form 10AB seeking renewal of registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961. However, in this application, the nature of the objects of the applicant was inadvertently described as "Relief of the Poor, Education, Medical relief & Advancement of any other objects of general public utility" — the standard description applicable to charitable institutions — instead of selecting "Religious" as the appropriate category.

This clerical oversight set the stage for the dispute that followed.

Proceedings Before the CIT(E)

Following the submission of Form 10AB, the CIT(E), Bengaluru issued a notice dated 04.10.2025 seeking various documents and details. The Authorized Representative of the assessee appeared and filed detailed submissions on 15.10.2025.

Subsequently, a Show Cause Notice (SCN) dated 27.10.2025 was issued, calling upon the assessee to explain why the registration should not be rejected. The assessee filed a comprehensive response on 23.12.2025, accompanied by extensive documentary evidence.

What the Assessee Submitted

The response filed on 23.12.2025 clearly established the following:

  • The society has functioned exclusively as a Religious Seminary for the Carmelites of Mary Immaculate from its very inception and has not altered its activities at any point.
  • Appointment letters of the Rector, Administrator, and other officials — issued by the Prior General, Carmelites of Mary Immaculate — were submitted as evidence.
  • A complete list of students enrolled in religious courses was provided.
  • Income and expenditure accounts demonstrated expenditures of an overtly religious nature — including upkeep of priests and students, chapel maintenance, and contributions to other religious institutes.
  • The FCRA registration as a Religious Association was cited as further corroboration.

The CIT(E)'s Rejection Order — 31.12.2025

Despite these elaborate submissions, the CIT(E) passed an order dated 31.12.2025 in Form No. 10AD, rejecting the application. The key observations from the rejection order read as follows: