Bhaichand Mehta Charitable Trust Vs CIT (Exemption) (ITAT Mumbai)
No Irrevocability Clause? No Problem: Trust Wins U/s 12AB & 80G Battle After Bombay HC Ruling
The Mumbai ITAT dismissed as infructuous the appeals of Bhaichand Mehta Charitable Trust after noting that the trust had subsequently been granted renewal of registration under Section 12AB and approval under Section 80G, following the landmark Bombay High Court ruling in The Chamber of Tax Consultants & Ors. v. CIT(E).
The CIT(E) had originally rejected the trust’s applications on the ground that the trust deed did not contain an express irrevocability and dissolution clause. The CIT(E) further alleged that the trust had furnished incorrect information in Form 10AB by stating that the trust was irrevocable and treated the same as a specified violation under Section 12AB. Consequently, both the 12AB registration and 80G approval were denied.
During the pendency of the appeal, the Bombay High Court held that a public charitable trust is deemed to be irrevocable by operation of law unless the trust deed specifically provides a power of revocation, and directed the Department not to reject registration applications merely because the trust deed lacks an express irrevocability clause. Pursuant to this judgment, the CIT(E) himself granted registration under Section 12AB and approval under Section 80G to the trust.
Since the substantive relief sought by the assessee had already been granted, the Tribunal held that nothing survived for adjudication and dismissed the appeals as infructuous. However, it clarified that if the assessee wished to challenge any conditions imposed in the subsequent registration orders, it would be free to pursue appropriate remedies separately.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
