Incorrect Clause in Form 10AB Amounts to a Curable Defect: ITAT Pune Orders Fresh Adjudication of Section 12AB and 80G Applications Filed by Educational Society
Overview of the Dispute
In a significant ruling that offers relief to charitable and educational institutions navigating the technical complexities of the online registration process, the Income Tax Appellate Tribunal, Pune Bench, has held that the inadvertent selection of a wrong clause while filing Form 10AB cannot, on its own, serve as a valid ground for rejection of a registration application. The Tribunal, in the matter of Colours Educational Society Vs CIT (ITAT Pune), treated such an error as a curable defect and directed the CIT (Exemptions) to re-examine the matter on its merits.
The decision carries considerable practical significance for trusts and societies—particularly those filing applications without professional guidance—who may inadvertently select an incorrect sub-clause in the online form while seeking registration under the Income Tax Act, 1961.
Background and Facts of the Case
The assessee in the present case is an educational society that had earlier obtained provisional registration under Section 12AB of the Income Tax Act, 1961, as per the applicable procedure under Section 12A(1)(ac)(vi). After securing such provisional registration, the assessee became eligible to apply for regular registration by filing Form 10AB.
However, at the time of filing the application for regular registration on 31.03.2025, the assessee mistakenly selected Section 12A(1)(ac)(ii) instead of the correct provision, i.e., Section 12A(1)(ac)(iii). This inadvertent selection proved to be consequential, as the two clauses serve entirely distinct purposes:
Section 12A(1)(ac)(ii)applies to institutions that already hold a regular registration underSection 12ABand are applying for its renewal before expiry.Section 12A(1)(ac)(iii)applies to institutions that hold a provisional registration and are now applying for regular registration upon commencement of activities.
Since the assessee only had a provisional registration certificate and not a regular one, it was clearly not eligible to apply under clause (ii). The assessee acknowledged this error in its reply and requested that the application be treated as one filed under clause (iii). However, the CIT (Exemptions), Pune refused to accept this request.
Order Passed by CIT (Exemptions)
The CIT (Exemptions), Pune issued notices to the assessee pointing out that the application filed under Section 12A(1)(ac)(ii) was deficient, as it required the submission of a copy of regular registration in Form 10AC. The assessee, instead, had produced its provisional registration certificate under Section 12AB read with Section 12A(1)(ac)(vi).
Despite the assessee's clarification—that the filing was made under the wrong clause due to an inadvertent error and without the assistance of any tax professional—the CIT (Exemptions) declined to treat the application as one filed under a different clause. The authority reasoned that an application filed under one clause of Section 12A(1)(ac) cannot be read as an application under another clause of the same provision.
On this basis, the application was declared non-maintainable and was rejected for statistical purposes, without any examination of the merits of the case and without drawing any adverse inference against the assessee. Consequently, the assessee's application for approval under Section 80G(5) of the Income Tax Act, 1961, which was filed simultaneously in Form 10AB, was also denied.