Public charitable trust registration cannot be refused for missing irrevocability or dissolution clauses when law supplies that effect.

A public charitable trust cannot be denied registration or renewal merely because the deed does not expressly state that it is irrevocable or provide for dissolution, where irrevocability arises by operation of law absent a reserved power of revocation. The absence of those clauses is not a statutory disqualification for registration under the charitable trust regime, and safeguards under the Maharashtra Public Trusts Act address concerns over trust property and dissolution. An entry in Form 10AB reflecting that legal position is not false or incorrect information and does not amount to a specified violation. As the denial of registration under section 12AB was unsustainable, the consequential refusal of approval under section 80G also could not stand.

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Issues: Whether rejection of registration/renewal under section 12AB of the Income-tax Act, 1961 and consequential approval under section 80G of the Income-tax Act, 1961 could be sustained on the grounds that the trust deed did not contain an express irrevocability or dissolution clause and that the answer given in Form 10AB was treated as false or incorrect information amounting to a specified violation.

Analysis: The dispute turned on the legal effect of the trust deed and the statutory regime governing charitable trusts. The decision proceeded on the basis that, for a public charitable trust, irrevocability may arise by operation of law unless the instrument expressly reserves a power of revocation. The absence of an express clause on irrevocability or dissolution was held not to be a statutory disqualification for registration or renewal under section 12AB. The reasoning also recognised that the public trust law framework, including the safeguards under the Maharashtra Public Trusts Act, 1950, addresses concerns regarding application of trust property and its treatment on dissolution. The answer entered in Form 10AB to the relevant query was held not to constitute false or incorrect information so as to attract specified violation under the Act. Once the denial of section 12AB relief was unsustainable, the consequential refusal under section 80G also could not stand.

Conclusion: The rejection of registration/renewal under section 12AB and the consequential denial of approval under section 80G were not justified and were set aside in favour of the assessee.

Final Conclusion: The appeals succeeded and the assessee was entitled to the claimed statutory benefits, with the revenue directed to grant the appropriate registration and approval.

Ratio Decidendi: A public charitable trust cannot be denied registration or renewal under section 12AB merely because its deed does not expressly recite irrevocability or dissolution terms, and an answering entry in Form 10AB cannot be treated as a specified violation when the legal status of irrevocability follows from law.

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