Please Help: Defective Return

A group of person formed a Trust for Religious purpose during the Previous year 2016-17. The trust is not registered under 12AA of Income Tax Act. They Simply made a trust deed and applied for PAN. During the previous year they, as a trustee, deposited donation amount in the bank account of trust and invested it as Fixed Deposits. TDS was duely deducted by bank on FD interest and same has been reflected in 26AS.

Now, on the basis of the above ITR-7 was filed. After processing of the return by CPC, it was found to be defective with error description as "Assessee has filed ITR-7, and has not claimed any deduction/ exemptions U/s 11 or clauses of Sec. 10 or Sec. 13A or Sec. 13B in schedule Part B-TI of the return".

The communication Letter also provides with the probable solution as "if eligible for exem. / deductions under the above mentioned section, the same needs to be claimed. Incase the assessee is not an institution req. to file return U/s 139 (4A) or (4B) or (4C) or (4D) or 139(4E) or 139(4F) the return should be filed in prescribed ITR 1 to 6, as applicable"

My query is whether the assessee is wrong in filing ITR-7, if yes, then which form should be filed.

Kindly help with the solution.

Thanking you in anticipation.

Regards.