ITAT Chennai Treats Wrong Form 10AB Filing as Curable Defect in Trust Registration Under Section 12AB and Section 80G

Background of the Dispute

The Income Tax Appellate Tribunal, Chennai Bench, dealt with a batch of six appeals in the case of charitable trusts challenging orders passed by the Commissioner of Income Tax (Exemptions), Chennai. These orders were dated 04.03.2023, 06.03.2023 and 30.03.2023 and concerned applications for:

  • Fresh registration under Section 12AB of the Income Tax Act 1961; and
  • Concurrent approval under Section 80G(5) for donations.

All the appeals raised a common legal issue: whether an assessee-trust that mistakenly filed Form 10AB instead of Form 10A for migration to the new registration regime could be denied registration solely on that technical ground.

The Tribunal chose to analyse the facts in ITA No. 577/CHNY/2023 relating to Arudhra Charitable Trust as the lead case, since the other appeals involved identical facts and issues.

Facts in Lead Case: Arudhra Charitable Trust

Existing Registration Under the Old Regime

  • The assessee, Arudhra Charitable Trust, is a registered charitable trust.
  • It already had registration under Section 12AA vide order dated 05.12.1996.
  • It also had approval under Section 80G granted earlier.

Following the introduction of the new registration framework under Section 12AB with effect from 01.04.2021, existing trusts like this assessee were required to re-apply under the new regime.

Statutory Requirement to Apply in Form 10A

The assessee submitted that:

  • Under Section 12A(1)(ac)(i), existing charitable entities were obliged to seek registration under Section 12AB.
  • The provision mandated that the application be filed on or before 30.06.2021.
  • A similar requirement was incorporated in clause (i) of the first proviso to Section 80G(5) regarding revalidation of approval under Section 80G(5).
  • For both purposes, the prescribed application format was Form 10A.

Inadvertent Filing of Form 10AB

Instead of using Form 10A, the assessee:

  • Filed Form 10AB on 22.09.2022;
  • Used that form to seek:
    • Registration under Section 12A(1)(ac)(i); and
    • Approval under clause (i) of the first proviso to Section 80G(5).

The assessee argued that this was an inadvertent and bona fide error in choosing the wrong electronic form. It was submitted that:

  • Both Form 10A and Form 10AB broadly require similar information from the assessee;
  • Form 10AB in fact asks for some additional particulars; and
  • All relevant details had been correctly furnished in the filed Form 10AB.

Reliance on CBDT Circulars Extending Due Date

To support its plea that technical lapses should not defeat genuine claims, the assessee relied on:

  • CBDT Circular No. 22/2022 dated 01.11.2022, which condoned delay in filing Form 10A up to 25.11.2022; and
  • CBDT Circular No. 6/2023 dated 24.05.2023, granting a further extension of time for Form 10A.

The assessee contended that, in light of these circulars aimed at reducing hardship, a mere error in selecting the form (10AB instead of 10A) should not lead to outright rejection.

Portal Restriction on Filing Correct Form 10A

The assessee further explained practical difficulties with the income-tax e-filing portal:

  • As on 30.09.2022, Form 10A on the portal was enabled only for cases covered by Section 12A(1)(ac)(vi);
  • The assessee’s case, however, fell under Section 12A(1)(ac)(i);
  • Due to this mismatch, the portal did not allow a fresh Form 10A filing under the correct category.

Even after CBDT Circular No. 22/2022 and Circular No. 6/2023, the assessee claimed it attempted to file a fresh Form 10A, but the system did not permit such filing.

Order of the CIT(E) and Grounds for Rejection

Reasoning Adopted by CIT(E)

The CIT(E) examined the application made in Form 10AB and rejected it on the following basis (as reflected in the impugned order):