ITAT Nagpur: Incorrect Section Code in Form 10AB Is a Curable Clerical Error, Not a Fatal Defect for Section 12AB Registration

Background and Overview

A significant ruling has emerged from the Income Tax Appellate Tribunal (ITAT), Nagpur, holding that a charitable trust cannot be denied registration under Section 12AB of the Income-tax Act, 1961, merely because the wrong section code was selected in Form 10AB at the time of filing the online application. The Tribunal set aside the rejection order passed by the Commissioner of Income Tax (Exemption), Pune, and directed that registration be granted to the assessee-trust.

This decision carries important practical implications for charitable institutions navigating the online registration process under the Income-tax Act, 1961, where inadvertent clerical errors during form submission have increasingly become grounds for rejection by the lower authorities.

Identity of the Parties and Nature of the Dispute

The assessee in this case is Shyam Mitra, a charitable institution incorporated on 31.03.1983 and registered under the Bombay Public Trust Act, 1950 bearing registration number F-3566 (Nagpur). The institution has been engaged in charitable activities since the date of its inception, encompassing relief to the poor, medical assistance, and upliftment of economically weaker and socially backward sections of society.

The assessee filed Form 10AB on 06.03.2025 seeking registration under Section 12AB of the Income-tax Act, 1961. However, while submitting the online application, the section code selected was Section 12A(1)(ac)(ii) instead of the correct and applicable provision, namely Section 12A(1)(ac)(vi)(B). The Commissioner of Income Tax (Exemption), Pune, treated this error as rendering the application non-maintainable and rejected it vide order in Form 10AD dated 30.08.2025.

Grounds of Appeal Raised Before the Tribunal

The assessee challenged the rejection order before the ITAT Nagpur on the following grounds:

  1. The CIT (Exemption), Pune erred in rejecting the application filed for grant of registration under Section 12AB of the Income Tax Act, 1961.
  2. The order passed by the CIT (Exemption), Pune, rejecting the application for registration under Section 12AB without considering the compliances made in response to the notice issued by e-mail on 23.07.2025 is illegal, invalid and bad in law.
  3. The CIT (Exemption) ought to have granted registration under Section 12AB of the Income Tax Act, 1961 on the basis of facts and evidence on record.
  4. The order passed by the CIT (Exemption) rejecting the registration under Section 12AB of the Income Tax Act, 1961 without considering the reply of the assessee is in violation of principles of natural justice and is not in accordance with law.
  5. Any other ground shall be prayed at the time of hearing.

Submissions Advanced on Behalf of the Assessee

The learned Counsel appearing for the assessee placed the following facts and arguments on record before the Tribunal:

Nature and History of the Trust

  • The assessee-trust was incorporated on 31.03.1983 and has been consistently engaged in charitable activities ever since.
  • It is registered under the Bombay Public Trust Act, 1950 and has clear charitable objects including relief to the poor, medical relief, and welfare of downtrodden and backward communities.
  • Crucially, the trust had never previously been granted registration under Section 12A or Section 12AA of the Income-tax Act, 1961.

Nature of the Error in Form 10AB