Trust registration cannot be refused for lack of a formal deed where oral creation and statutory conditions are shown.

Rule 17A(a) of the Income-tax Rules recognises that a trust may be created otherwise than by a formal instrument, and the document evidencing such creation is sufficient for a section 12AA registration application. A written trust deed is therefore not mandatory, and registration cannot be refused merely because the trust was created orally, if evidence of creation is produced and the statutory conditions are otherwise met. The charitable nature of the objects and questions about application of income do not defeat registration at the threshold stage. Refusal of registration solely for absence of an instrument was not justified, and reconsideration in accordance with law was upheld.

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Issues: Whether registration under section 12AA could be refused on the ground that the trust was not created under a formal instrument and whether the requirement of a written deed was mandatory for grant of registration.

Analysis: Rule 17A(a) of the Income-tax Rules, 1962 expressly contemplates a trust being created otherwise than under an instrument, in which event the document evidencing creation of the trust is sufficient for the registration application. The rule does not make a formal deed indispensable. The Court accepted the view that a trust may be created orally and that, if evidence of such creation is produced and the statutory conditions are otherwise satisfied, registration cannot be denied merely for want of a formal trust deed. The Court also accepted that the charitable nature of the objects and the question of application of income are matters that do not defeat registration at the threshold stage.

Conclusion: Refusal of registration on the sole ground that the trust was not established under an instrument was not justified, and the Tribunal's order restoring the matter for reconsideration in accordance with law was upheld.

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