TaxTMI 
TaxTMI 
2026 (5) TMI 718
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.... and in facts in stating that the appellant has violated the provision as prescribed under explanation (g) of Section 12AB (4) of the Act. Your appellant submits that no such violation has been made and thus registration under section 12AB be approved. 3) Your appellants further reserve the rights to add, amend or alter the aforesaid grounds of appeal as they may think fit by themselves or by their representatives." B. ITA No.1263/Mum/2026 1) "The learned CIT (Exemptions) has erred in law and in facts in holding the approval under section 80G of the Act without appreciating the facts and circumstances of the case. 2) Your appellants further reserve the rights to add, amend or alter the aforesaid grounds of appeal as they may think fit by themselves or by their representatives." 3. The entire controversy in the present appeals before us is in respect of absence of explicit clause in the Trust Deed regarding irrevocability and dissolution which according to the ld. CIT(E) renders the assessee trust liable for rejection of its registration u/s 12AB of the Act. There are two appeals. Appeal vide ITA no.1262/Mum/2026 is in respect of rejection of r....
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....gularization of provisional registration filed in Form 10AB was rejected. Aggrieved, assessee is in appeal before the Tribunal. 4. Before us, ld. Counsel for the assessee referred to the paper book placed on record containing 73 pages to corroboratively demonstrate its case. Assessee trust was created vide Trust Deed dated 29.04.1987 with the charitable objects of relief of poor, education and medical relief. Assessee trust was granted registration u/s 12A vide Registration No. TR.25822 dated 12.08.1987, issued by the Commissioner of Income Tax, Bombay City - 4, Bombay. It was also granted certificate of registration/approval u/s 80G(5) vide certificate dated 15.10.1987 bearing Registration No. TC/80G/CH - 1104A (8). In order to comply with the new registration regime effective from 01.04.2021, assessee filed renewal application in terms of section 12AB, first by seeking provisional registration vide Form No.10AC which was granted vide registration dated 31.08.2021 for the period from A.Y.2022-23 to A.Y.2026-27. Thereafter, for the regularization of this provisional registration, assessee applied in Form 10AB whereby ld. CIT(E) rejected the said application for renewal of the re....
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....ion thereof to be applied by invoking the doctrine of cypres to any other charitable objects but the trust cannot be revoked or dissolved. He emphasized that under the Public Trust law, once property is dedicated to a public charitable purpose, the dedication is completed and settlor is divested of the property. The assets so settled in favour of public trust can never revert back to the settlor. Reference was also made to provisions of section 22(3A) and (3B) of the MPTA, according to which, for a trust to be a revocable trust, power to revoke the same is essential which must be explicitly expressed in the Trust Deed so as to enable the settlor to invoke the same and revoke the trust. In other words, in the absence of any revocability clause, a trust cannot be revoked. Hence, the interpretation adopted by ld. CIT(E) for explicit requirements of "irrevocability clause" is misplaced. 5.3. He strongly relied on the decision of Hon'ble Jurisdictional High Court of Bombay in the case of CIT (E) vs. Tara Educational and Charitable Trust in Income Tax Appeal No.247 of 2015, judgment dated 31.07.2017 wherein Hon'ble Court had held absence of dissolution clause in the Trust Deed is not ....
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.... being no specific requirement in the statute to have a clause on irrevocability, as already contended. According to him, Trust Deed of the assessee does not have revocability clause and, therefore, it always had a bona fide belief that the assessee trust was always irrevocable and, therefore, with this belief, the answer "Yes" given by the assessee to the question on the utility is correct and cannot be considered to be false or incorrect information as inferred by the ld. CIT(E) while rejecting the application. Such a procedural constraint imposed on the assessee by way of digital utility cannot be held against the assessee. Ld. Counsel thus strongly asserted that the order of ld. CIT(E) be set aside and direction be given for grant of registration u/s 12AB as well as u/s 80G which is consequent to grant of registration u/s 12AB. 6. Per contra, ld. CIT DR placed reliance on the order of ld. CIT(E) and asserted that provisions of section 12AB empowers the CIT(E) to examine the issue of revocability. According to him, irrevocability requirement is a condition precedent for grant of registration and exemption. 7. We have heard both the parties and perused the material on recor....
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.... "Yes" to row no. 6 of the Form 10AB as furnishing false or incorrect information which shall not be a ground to reject the application for registration u/s 12AB. It is also directed for the consequential order passed denying registration u/s 80G which are to be set aside and the registration be granted u/s 80G which is consequential to granting of registration u/s 12AB. In sub-para (vi), Hon'ble Court made specific mention that all such orders where renewal of registration u/s 12AB has been rejected on the grounds discussed in the said judgment are quashed and set aside. 7.2. Relevant para 45 and 46 of the judgment by the Hon'ble Court (supra) are reproduced for ready reference: "45. In summary, we hold that a public charitable trust is deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation. The absence of an explicit irrevocability clause is not a ground for rejecting an application for registration or renewal under section 12AB of the Act. Even if the Deed provides for any revocability clause, due to operation of sections 22(3A) and 22(3B) of the MPT Act, such trusts which are registered under the MPT Act, w....