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Judgment
ORDER
Per Renu Jauhri, Accountant Member:
This appeal by the assessee is directed against the order dated 15.12.2025 of the Commissioner of Income Tax (Exemption), Delhi [hereinafter referred to as the ‘Ld. CIT(E)], rejecting the application filed by the assessee for registration under section 80G of the Income-tax Act, 1961, (hereinafter referred to as the ‘Act’) and for grant of approval under clause (ii)(b)(B) of Second proviso to section 80G(5) of the Act (hereinafter referred to as the ‘Act’).
The assessee has raised the following grounds of appeal:
“ 1. That the learned CIT (Exemption), Delhi erred in law and on facts in rejecting the appellant’s application for approval under section 80G(5) of the Income-tax Act, 1961.
2.That the learned authority erred in holding that the appellant is engaged in religious activities, merely on the basis of an inadvertent and erroneous classification of expenditure in Form 10AB, ignoring the actual nature of activities carried out by the appellant.
3.That the appellant does not carry out any religious activity whatsoever, and the expenditure wrongly shown as religious expenditure is, in fact, purely charitable in nature, incurred in furtherance of the appellant’s objects.
4.That the learned CIT (Exemption) failed to appreciate that clerical or reporting mistakes cannot determine the real character of an institution, particularly when the trust deed, objects clause, and actual activities clearly establish charitable purpose.
5.That the rejection of approval under section 80G solely on the basis of a reporting error is arbitrary, mechanical, and contrary to the settled legal principle that substance must prevail over form.
6.That the learned authority violated the principles of natural justice by not granting the appellant a proper opportunity to clarify or rectify the bona fide mistake before passing the impugned order.
7.That section 80G(5B) has been wrongly applied, as the appellant has not incurred any expenditure of religious nature, and therefore the statutory limit of 5% is not attracted at all.
8.That the cancellation of provisional registration consequential to rejection of Form 10AB is illegal, unjustified, and unsustainable in law.
That the impugned order dated 15.12.2025 is bad in law, based on incorrect facts, and liable to be set aside. 10.That the appellant craves leave to add, amend, alter, or withdraw any ground of appeal at or before the time of hearing.”
At the outset, Ld. AR has submitted that the assessee’s application for approval u/s 80G was wrongly rejected holding the trust to be engaged in religious activities, merely on the basis of inadvertent and erroneous classification of expenditure in Form 10AB, without actually considering the nature of its activities. Further, no proper opportunity of being heard was granted to the assessee before rejecting the application.
After hearing both the parties and in the interest of justice, we deem it appropriate to restore the matter to the CIT(E) for fresh consideration after giving reasonable opportunity of being heard to the assessee.
In the result, appeal of the assessee is allowed for statistical purposes.