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2025 Supreme(Online)(ITAT) 8235
INCOME TAX APPELLATE TRIBUNAL (CHANDIGARH BENCH)
Shri Krinwant Sahay, AM, Shri Laliet Kumar, JM
Indian Institute of Management Sirmaur – Appellant
Versus
Commissioner of Income Tax (Exemptions), Chandigarh – Respondent
Income Tax Appeal|ITA No. 1122/Chd/2024
For the Appellant:Shri Sudhir Sehgal, Advocate
For the Respondent: Shri Rohit Sharma, CIT DR
Technical mistakes in application should not bar legitimate claims for tax exemptions.
Headnote:(A) Income Tax Act, 1961 - Section 10(23C)(iii) - Provisional registration application rejected by CIT (Exemptions) on technical grounds - Appellant, a Centrally Funded Institution, applied for registration after commencing activities, leading to denial of registration - Court emphasized that mistakes made in applying for registration should not penalize the assessee, directing approval under the correct clause. (Paras 1, 14, 18)
(B) Legal Principles - The court held that an inadvertent mistake by the counsel in choosing the wrong sub-section for registration should not affect the legitimate claims of the assessee. (Paras 9, 14)
Facts of the case:
The appellant is a premier management education institute established in 2015, which applied for registration under the Income Tax Act after commencing its activities. The CIT (Exemptions) denied the application based on a technicality related to the timing of the application.
Findings of Court:
The court found that the refusal of registration was due to a technical mistake and directed that the CIT (Exemptions) grant the approval to the assessee as if it was an old Institute.
Issues: The main issues included whether the technical error in applying for registration should disqualify the appellant from receiving approval under the correct section.
Ratio Decidendi: The court ruled that technical mistakes should not prevent the assessee from obtaining legitimate deductions or exemptions, emphasizing the need for fairness in tax administration.
Result: Assessee’s appeal allowed.
| Table of Content |
|---|
| 1. establishment and registration of the appellant institution. (Para 3 , 4) |
| 2. technical grounds for denial of registration. (Para 6 , 8 , 10) |
| 3. court's directive on correcting technical mistakes. (Para 14 , 18) |
| 4. outcome of the appeal. (Para 19) |
आदेश Order
PER KRINWANT SAHAY, AM:
This is an appeal filed by the Assessee against the order of the Ld. CIT(Exemptions), Chandigarh dt. 08/10/2024 vide which the registration application u/s 10(23C)(iii) of the Act was denied to the assessee.
2. In the present appeal Assessee has raised the following grounds:
"1. That the Ld. CIT (Exemptions) has erred in rejecting the application for granting approval u/s 10(23C)(iii) of the Income Tax Act.
2. That the rejection of application u/s 10(23C)(iii) is against the facts and circumstances of the case.
3. That the replies as filed during the course of proceedings before the CIT(Exemptions) have not been considered properly.
4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or deposed off."
3. Briefly, the facts of the case are that the Indian Institute of Management Sirmaur is a Centrally Funded Institution of National Importance set up by the Government of India in 2015. IIM Sirmaur is one of the newer institutions of the IIM family in the country. As a premier institution, under aegis of Ministry of Education, Government of India, it aims to provide Management Education of high quality and promotes allied areas of knowledge and inter-disciplinary studies. The appellant was earlier registered as Society on 11-08-2015 which later became an Institute by the Act of Parliament on 31-12-2017 and is now governed by the Indian Institutes of Management Act, 2017.
4. The accounts of the Institution are audited by C&AG. The IIM mainly offer undergraduate/ postgraduate, postgraduate, doctoral, and executive education programs. The Appellant institute is the institution of excellence, established with the objectives of imparting high quality management education and training, conducting research and providing consultancy services in the field of management to various sectors of the Indian economy. 5. The issue in the present appeal is that appellant applied for provisional registration in Form 10A on 16.03.2024 and the said provisional registration was granted in Form 10AC vide order, dated 23.03.2024 under sub-clause (A) of clause (iv) of first proviso to clause (23C) of section 10.
6. The sub-clause (A) of clause (iv) of first proviso to clause (23C) of section 10 of the Income Tax Act, 1961 ('the Act') is applicable to assessee, who applied for registration before commencement of activities of Trust but since the appellant was in existence before making the application, so, the same was not applicable to the Assessee.
7. Thereafter, the appellant applied to Commissioner of Income Tax (Exemptions), Chandigarh for final registration under clause (iii) of first proviso to clause (23C) of section 10 of the Act in Form 10AB dated 17.04.2024.
8. The CIT (Exemptions) called for detailed information, which was complied and no objection was raised to the activities carried out by the Trust. The CIT (Exemptions) refused to grant the registration, since it was noticed that the provisional approval could not have been granted to the assessee as the appellant has already commenced its activities in 2015 and, thus, it was stated by the CIT (Exemptions) that provisional approval being bad in law and, thus, rejected the application of the assessee.
9. It was argued by the Ld. Counsel that the assessee is engaged in providing activities of imparting high quality management education and training conducted research and providing the consultation services in the field of management. The provisional registration was applied by the then Counsel, who inadvertently applied in sub- clause (A) of clause (iv) of first proviso to clause (23C) of section 10 of the Act. The said registration was granted by the departme
