ITAT Restores Trust’s 12AB Registration Application: Finds Rejection Based Solely on Procedural...

The Income Tax Appellate Tribunal (ITAT) has restored the registration application of a trust under Section 12AB of the Income Tax Act. The tribunal found that the application was rejected by the tax authorities solely on the grounds of a procedural lapse, which it deemed to be a violation of the principles of natural justice. The trust had failed to respond to a notice due to some inadvertent error. The ITAT held that a minor procedural mistake should not lead to the rejection of an application without giving the applicant a fair chance to rectify the error or present their case. By restoring the application, the tribunal has given the trust another opportunity to complete the registration process. This decision emphasizes that the focus of the authorities should be on substantive compliance rather than on minor procedural technicalities, especially for charitable institutions.