Ram Bhakt Sewa Nyas Vs CIT (ITAT Delhi)
Delhi ITAT: U/s 12AB & 80G Registration Cannot Be Denied Merely Because Trust Deed Lacks an Irrevocability Clause
The Delhi ITAT set aside the CIT(E)’s orders rejecting the trust’s applications for registration under section 12AB and approval under section 80G(5) merely because its trust deed did not expressly state whether the trust was revocable or irrevocable and did not specify how its assets would be transferred upon dissolution.
The Tribunal followed the Bombay High Court’s recent judgment in The Chamber of Tax Consultants v. CIT(E) & Ors., W.P.(L) No. 7587 of 2026, dated 09.03.2026, which held that a public charitable trust is deemed irrevocable by operation of law unless its trust deed expressly provides otherwise. Consequently, absence of an express irrevocability clause cannot by itself justify rejection or non-renewal of section 12AB registration or section 80G approval.
Importantly, the Bombay High Court had also held that where the trust is irrevocable by operation of law, answering “Yes” to the relevant question in Form 10AB cannot be regarded as furnishing false or incorrect information merely because the trust deed contains no express irrevocability clause.
The ITAT therefore directed that the CIT(E) shall not deny registration on the issue of absence of an irrevocability clause. However, since the CIT(E) had not examined the other statutory requirements, he was permitted to examine the genuineness of the trust’s activities, its charitable objects, commencement of activities and other relevant aspects.
Accordingly, both rejection orders were set aside and the applications restored to the CIT(E) for de novo adjudication, after giving the assessee sufficient opportunity of hearing.
Cases Discussed
- The Chamber of Tax Consultants Vs. CIT(Exemption) & Ors. (Bombay HC), Writ Petition (L) No.7587 of 2026, judgement dated 9th March, 2026
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeals are filed by assessee against the separate orders dated 19.03.2026 passed by Ld. Commissioner of Income Tax (Exemption), Delhi [“Ld. CIT(E)”] rejecting the application for registration u/s12AB(1)(b)(ii)(B) and 80G(5) of the Income Tax Act, 1961 [“the Act”].
2. Since both the appeals are against the rejection of applications filed u/s 12AB and 80G(5) of the act, thus they are taken together and decided by a common order.
3. At the outset, the learned Counsel for the assessee stated that the assessee’s application in Form No.10AB seeking registration under Section 12AB was rejected by the learned CIT(Exemption) for the reason that in the trust deed, there is no provision that the trust is revocable or irrevocable and how the assets of the trust are to be transferred in case of dissolution of the trust. Similarly the application in Form 10A for registration u/s 80G(5) was rejected. The learned Counsel stated that Hon’ble Bombay High Court in the case of The Chamber of Tax Consultants Vs. CIT(Exemption) & Ors. in Writ Petition (L) No.7587 of 2026, judgement dated 9 th March, 2026, has held that a public charitable trust is deemed irrevocable by operation of law unless the trust deed expressly provides otherwise, and that absence of an explicit irrevocability clause cannot be ground for rejection of registration or renewal under Section 12AB and 80G(5) of the Act. It was further directed by the Hon’ble High Court that applications for registration under Section 12AB and u/s 80G(5) shall not be rejected solely on the ground of absence of an irrevocability clause and that answering “Yes” in Form 10AB in such circumstances cannot be treated as furnishing false or incorrect information.
4. When these facts were confronted to the learned CIT-DR, he could not controvert the above factual aspect.
5. Heard the contentions of both the parties and perused the material available on record. After going through the arguments of both the sides as well as the case law of Hon’ble Bombay High Court cited by the learned Counsel for the assessee in the case of The Chamber of Tax Consultants (supra) and also the order of learned CIT(Exemption), we noted that apart from irrevocability clause, learned CIT(Exemption) has not examined and has not carried out necessary verification in support of the genuineness of the activities, charitable objects and commencement of its activities. Hence, we set aside both the orders of learned CIT(Exemption) with a direction that hewill not deny registration on the issue of irrevocability clause but, he can examine other aspects like genuineness of the activities, charitable objects and commencement of the activities, etc. In terms of the above, the orders of learned CIT(Exemption) are set aside and the matter are restored back to the file of learned CIT(Exemption) for deciding the same denovo after providing sufficient opportunity of being heard to the assessee. Accordingly, all Grounds of appeal raised by the assessee in both the appeals are allowed for statistical purposes.
6. In the final result, both captioned appeals of the assessee in ITA Nos. 3240 & 3241/Del/2026 for Assessment year 2025-26 are allowed for statistical purposes.
Order pronounced in the open court on 07.08.2026.
