Section 80G Rejection Set Aside – Absence of Irrevocability Clause Not a Valid Ground

Lila Hira Charitable Foundation Vs CIT (Exemptions) (ITAT Mumbai)

Mumbai ITAT set aside rejection of 80G approval by CIT(E), holding that non-inclusion of an irrevocability/dissolution clause in trust deed cannot be a ground for denial.

The Tribunal noted:

• CIT(E) rejected application citing:
  • Absence of irrevocability/dissolution clause
  • Alleged “specified violation” u/s 12AB(4)
• The issue is now squarely covered by Bombay High Court ruling in Chamber of Tax Consultants

The High Court clarified:

• Charitable trusts are inherently irrevocable in law unless expressly stated otherwise
• Absence of such clause cannot justify rejection of registration or approval
• Authorities must adopt a reasonable and fair approach

Following this binding precedent, the ITAT held:

• The very basis of rejection is legally unsustainable

Accordingly, the Tribunal:

• Set aside the CIT(E)’s order
• Restored the matter for fresh adjudication in line with High Court directions
• Directed passing of a speaking order

The appeal was allowed for statistical purposes, reinforcing that technical defects in trust deed cannot defeat substantive charitable status.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The instant appeal of the assessee filed against the order of the Ld. Commissioner of Income Tax (Exemptions), Mumbai [for brevity the “Ld. CIT(E)”], order passed under section 80G (5) of the Act (for brevity ‘the Act’) for Assessment Year 2025-26, date of order 29.12.2025.