ITAT directs Matter to CIT(E) citing Form No.10AB Application should be Construed u/s 12A(1)(ac)(i) of Income Tax Act [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) directed the matter to Commissioner of Income Tax (Exemption), emphasizing that the application in Form No.10AB should be construed under Section 12A (1)(ac)(i) of the Income Tax Act, 1961.

The assessees applied for registration, which applications were allowed by the Department and copy of the order is available in Form No. 10AC. The Registrations were granted provisionally from 23rd September, 2021. Meanwhile the assessees have filed one more application in Form No. 10AB.

The Commissioner formed an opinion that this clause was meant for grant of provisional registration. In these cases, provisional registration has already been granted. The assessees are required to file an application within six months prior to expiry of period of the provisional registration or within six months from the commencement of activity, whichever event occurs first.

The two-member bench of the tribunal, comprised of Sanjay Garg (Judicial member) and Girish Agarwal (Accountant member), meticulously reviewed the records. It became apparent that the assessee’s application should have been made under section 12A, sub-clause (1)(ac)(i), entitling them to regular registration for a period of five years. Dismissal of the applications occurred solely due to the erroneous mention of the clause in the application form. Given the opportunity within the system, the assessees could have rectified this mistake and correctly referenced Section 12A(1)(ac)(i) of the Income Tax Act.

ITAT deemed it appropriate to relegate this issue to the file of CIT(Exemption) with a direction that application in Form No. 10AB should be construed as if filed under clause 12A(1)(ac), sub-clause (i). The applications were to be considered on merit for grant of registration for a fixed period, not to be treated to grant a provisional registration. Accordingly, the appeal was allowed.

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