ITAT Remands Rejection of Final Registration Application for Charitable Society Due to Clerical Error

The assessee, Muktisar Welfare Club, a charitable society, obtained the provisional registration under section 12A(1)(ac)(vi)(A) for AY 2024-25 to AY 2026-27. When the society filed an application for the final registration in Form 10AB, the CIT(Exemption) rejected it because the registration was wrongly filed under 12A(1)(ac)(iii) instead of Section 12A(1)(ac)(vi)(B), as the society had already started its activities before the date of registration.

The assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT), Amritsar, against the rejection of the application and the rejection of the assessee’s application for approval under section 80G of the Income-tax Act, 1961.

The assessee submitted that the error was a typographical mistake, and the rejection based solely on a clerical error is bad in law. The assessee argued that the genuineness of their activities was not disputed by the CIT(E). It was claimed that the society’s expenses were consistent with the aim and objectives of the society. The assessee further argued that CIT(E) violated natural justice by not allowing them to rectify the mistake.

The ITAT observed that the rejection was based solely on a procedural defect without pointing out any other deficiency about the genuineness of the activities, which is unjustified. The tribunal agreed that the society should have been allowed to correct the mistake. Therefore, the tribunal remanded the matter back to the CIT(E) for fresh consideration, directing the application to be treated under the correct provision. The matter regarding the approval under Section 80G was also remanded for fresh consideration.