The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that selecting an incorrect clause in Form No. 10AB is a curable procedural defect and cannot, by itself, justify rejection of an application for renewal of approval under Section 80G of the Income-tax Act, 1961.
The Bench of Siddhartha Nautiyal (Judicial Member) and Om Prakash Kant (Accountant Member) directed the Commissioner of Income Tax (Exemptions), Mumbai, to treat the institution’s application as a renewal request under the correct provision and examine its eligibility on merits.
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The Tribunal further directed that any necessary correction in the electronic form should be permitted. It allowed the appeal for statistical purposes and restored the application to the Commissioner for fresh consideration.
Anjumane Hooshami Society, a charitable institution, had already been granted regular approval under Section 80G through Form No. 10AC dated October 15, 2021. The approval covered five assessment years, from AY 2022–23 to AY 2026–27.
Since the existing approval was approaching expiry, the society filed Form No. 10AB on August 8, 2025, seeking its continuation.
While completing the electronic form, however, the society selected clause (iii) of the first proviso to Section 80G(5), instead of clause (ii).
The Commissioner observed that clause (iii) applies to institutions holding provisional approval that subsequently seek regular approval.
Since the society already held regular approval for five years, the Commissioner considered clause (ii)—which concerns an existing approval due to expire—to be the appropriate provision.
The application was rejected solely because the society had selected the wrong clause.
At the same time, the Commissioner expressly clarified that the approval granted on October 15, 2021, would continue to remain valid for AY 2022–23 to AY 2026–27.
The Tribunal noted that the rejection order contained no adverse finding regarding the society’s charitable objects, the genuineness of its activities, or its substantive eligibility for approval under Section 80G.
The society challenged the rejection before the ITAT, also raising a ground alleging violation of the principles of natural justice.
The Tribunal found that the mistake was procedural. The society had submitted the prescribed Form No. 10AB before the competent authority, and its intention to seek continuation of the existing approval was clear from the record.
The Commissioner had himself verified the departmental portal and confirmed that regular approval had already been granted for five years. Consequently, there was no uncertainty about either the existing approval or the nature of the application the society intended to make.
The Bench held that selecting an incorrect clause in an electronic form should not result in rejection without permitting the applicant to correct the mistake.
According to the Tribunal, the Commissioner could have allowed the society to apply under the proper clause or treated the application already filed as one made under the correct provision.
The Tribunal relied on several decisions dealing with incorrect section codes or clause selections in Form No. 10AB.
In Rotary Charity Trust v. CIT (Exemptions), [2025] 170 taxmann.com 797 (Mumbai–Trib.) / [2025] 211 ITD 297, the Mumbai Bench had restored an application rejected for an incorrect section code. It directed consideration under the correct provision and grant of approval if the institution was eligible.
In Subharma Charitable Trust v. CIT (Exemptions), [2025] 172 taxmann.com 431 (Mumbai–Trib.), the applicant had selected clause (ii) instead of clause (iii). The error was treated as inadvertent and clerical, and the matter was restored to enable an application under the appropriate clause.
The Bench also drew support from Aatman Foundation v. CIT (Exemptions), [2025] 174 taxmann.com 1109 (Ahmedabad–Trib.) / [2025] 213 ITD 8. That decision recognised that an incorrect selection in Form No. 10AB should not prevent examination of the claim under the correct provision.
In Gandhinagar Ayyapa Pooja Samiti v. CIT (Exemptions), [2025] 174 taxmann.com 901 (Ahmedabad–Trib.), the Tribunal had similarly held that an application should not be rejected merely for selecting an incorrect clause when the relevant approval and facts were already available to the authority.
The Bench further referred to Modasa Ekda Visha Khadayata Kovadia Kelavani Mandal v. CIT (Exemptions), [2025] 176 taxmann.com 569 (Ahmedabad–Trib.), where a wrong clause selection was held to be curable and the application was restored for determination on merits.
Drawing from these authorities, the Tribunal held that the consistent approach was to treat such mistakes as curable procedural defects where the nature of the relief sought was clear.
Applying these principles, the Tribunal directed the Commissioner to treat Form No. 10AB filed on August 8, 2025, as an application for renewal under clause (ii) of the first proviso to Section 80G(5).
If any procedural correction in the electronic form was required, the society had to be permitted to make it.
The Commissioner was directed to examine the application on merits and grant approval in accordance with law if the society satisfied the prescribed conditions. The application could not be rejected merely because the wrong clause had been selected in the original form.
The Tribunal also directed that the society be given a reasonable opportunity of hearing.
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