ITAT Hyderabad Sends Back 10(23C) Exemption Matter Over Typographical Error in Approval Order

The assessee, Shri M. Bagareddy Educational Society, filed its return for AY 2023-24, declaring NIL income and claiming exemption under Section 10(23C)(vi). The CPC, while processing the return under Section 143(1), denied the exemption, citing a mismatch in registration details. The assessee had earlier received a provisional 12A registration via Form 10AC, but later applied for regular approval under Section 10(23C)(vi) through Form 10AB.

The CIT (Exemptions) disposed of this application on 31.03.2023; however, due to a typographical error, the approval was wrongly shown as granted under Section 10(23C)(ii), a clause meant for political parties. The CIT(A) allowed the exemption, treating the mismatch as a mere error.

Issue Raised: Whether the assessee’s exemption claim under Section 10(23C)(vi) could be allowed when the approval order in Form 10AB mistakenly mentioned Section 10(23C)(ii) due to a typographical error.

Tribunal Ruled: The Tribunal observed that although the assessee had applied for approval under Section 10(23C)(vi), the order issued in Form 10AB mistakenly reflected approval under Section 10(23C)(ii). Since Section 10(23C)(ii) applies to political parties, the mismatch was material and not limited to the URN alone. The Tribunal noted that the assessee had already filed a rectification application before the CIT(E), and until this mistake was corrected, technical discrepancies would continue to affect the exemption claim.

The Tribunal set aside the CIT(A)’s order and remanded the matter to the Assessing Officer. The AO was instructed to verify the correct approval details upon rectification by the CIT(E) and then decide the exemption claim in accordance with the law. The revenue’s appeal was thus allowed for statistical purposes.

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