No Irrevocability Clause Alone Cannot Defeat Section 80G Approval: ITAT Mumbai

Bombay Patel Welfare Society Vs CIT (Exemptions) (ITAT Mumbai)

Summary: The assessee, a charitable society registered under the Bombay Public Trusts Act, 1950, appealed against the order dated 31.12.2025 passed by the Commissioner of Income Tax (Exemptions), Mumbai, rejecting its application in Form No. 10AB under clause (iii) of the first proviso to section 80G(5) of the Income-tax Act, 1961, seeking regular approval under section 80G.

The assessee had received provisional approval under section 80G(5) in Form No. 10AC on 08.03.2023, valid up to assessment year 2025-26. It subsequently filed Form No. 10AB on 10.06.2025. The CIT(E) considered the application delayed by 21 months and also noted that the trust deed or memorandum of association did not contain an express irrevocability or dissolution clause. The answer “Yes” furnished by the assessee in point No. 6 of Form No. 10AB was consequently treated as false or incorrect information constituting a specified violation under Explanation (g) to section 12AB(4).

The assessee contended that the delay was procedural, that it already held provisional approval, and that there was no adverse finding regarding its charitable objects or genuineness of activities. It also submitted that the alleged deficiency concerning irrevocability or dissolution was curable and that an opportunity should have been granted to rectify it. The Departmental Representative relied on the impugned order but fairly stated that there was no objection to restoring the matter for fresh adjudication after giving the assessee a reasonable opportunity.

The Tribunal noted that the CIT(E) had rejected the application principally on three grounds: the 21-month delay in filing Form No. 10AB, absence of an express irrevocability or dissolution clause, and the alleged false or incorrect information in point No. 6 of Form No. 10AB. It further noted that no independent adverse finding had been recorded concerning the charitable nature of the assessee’s objects or genuineness of its activities.

On the irrevocability issue, the Tribunal relied upon the jurisdictional Bombay High Court decision in The Chamber of Tax Consultants & Ors. v. Commissioner of Income Tax (Exemptions) & Ors., which held, as recorded in the supplied order, that absence of an explicit irrevocability clause is not a ground for rejection where the constitutional document does not expressly reserve a power of revocation.

The Tribunal also held that the answer “Yes” in point No. 6 of Form No. 10AB could not, merely because the constitutional document lacked an express irrevocability clause, be treated as false or incorrect information or as a specified violation under Explanation (g) to section 12AB(4).

Considering that the application had not been examined on merits, the Tribunal set aside the impugned order and restored the application to the CIT(E). It directed that the delay in filing Form No. 10AB be treated as condoned and that the application be examined afresh on merits. The CIT(E) was directed to verify the charitable objects, genuineness of activities and compliance with the statutory conditions under section 80G(5) and the applicable Rules, while providing the assessee a reasonable and effective opportunity of being heard and furnishing documents and explanations. The appeal was accordingly allowed for statistical purposes.

Background and Procedural History

The assessee was stated to be a charitable society registered under the Bombay Public Trusts Act, 1950 and engaged in charitable activities in accordance with its stated objects.

Provisional approval under section 80G(5) was granted to the assessee in Form No. 10AC vide order dated 08.03.2023. The approval was valid up to assessment year 2025-26. Thereafter, the assessee filed Form No. 10AB on 10.06.2025 under clause (iii) of the first proviso to section 80G(5), seeking regular approval.

The CIT(E) initially found the Form No. 10AB application incomplete and issued a notice dated 22.09.2025 seeking prescribed documents and information. The assessee furnished its online response on 01.12.2025.

The CIT(E), however, treated the application as delayed by 21 months and observed that the assessee had not availed the extended period granted under CBDT Circular No. 07/2024 dated 25.04.2024. The CIT(E) further relied upon the absence of an express irrevocability or dissolution clause and treated the declaration in point No. 6 of Form No. 10AB as false or incorrect information.

Grounds Raised by the Assessee

The assessee challenged the rejection on the grounds that it was based on technical and procedural considerations, including the alleged absence of an irrevocability or dissolution clause and delay in filing Form No. 10AB.

The assessee also contended that any deficiency in the trust deed was curable and that it should have been granted an opportunity to amend or rectify the alleged defect. It further alleged that the rejection was mechanical and that a reasonable opportunity to cure the procedural deficiencies had not been provided.

Submissions Before the Tribunal

Assessee’s Submissions

The learned Authorised Representative submitted that the assessee was carrying out charitable activities in accordance with its objects and already held provisional approval under section 80G(5).

It was submitted that the delay in filing Form No. 10AB was procedural and that rejection at the threshold was unwarranted, particularly in the absence of any adverse finding regarding the charitable objects or genuineness of the assessee’s activities.

Regarding the constitutional document, the learned AR submitted that the absence of an express irrevocability or dissolution clause could not constitute a valid ground for rejection. Alternatively, it was submitted that the alleged deficiency was curable and that an opportunity should have been provided to rectify it.

The assessee therefore sought setting aside of the impugned order and restoration of the matter to the CIT(E) for fresh adjudication on merits.

Departmental Representative’s Submissions

The learned Departmental Representative relied upon the impugned order passed by the CIT(E). However, he fairly stated that he had no objection if the matter was restored to the file of the CIT(E) for fresh adjudication in accordance with law after affording the assessee a reasonable opportunity of being heard.

Tribunal’s Observations and Findings

Delay in Filing Form No. 10AB

The Tribunal recorded that the assessee had been granted provisional approval under section 80G(5) in Form No. 10AC dated 08.03.2023, valid up to assessment year 2025-26, and had subsequently filed Form No. 10AB on 10.06.2025.

The Tribunal observed that the revised registration and approval regime for charitable institutions introduced multiple forms, statutory timelines and approvals having different periods of validity. It noted that successive extensions granted by the Board indicated practical difficulties faced by charitable institutions in complying with transitional requirements.

The Tribunal further observed that there was nothing in the impugned order indicating deliberate suppression, contumacious conduct or an attempt by the assessee to obtain an unintended benefit. In the circumstances, rejection without examination of substantive eligibility would result in the charitable institution being denied adjudication on merits solely on account of a procedural lapse.

The Tribunal accordingly held that the delay in filing Form No. 10AB deserved to be condoned and that the application required examination on merits in accordance with the statutory conditions governing approval under section 80G.

Absence of Express Irrevocability or Dissolution Clause

The second principal ground for rejection was the absence of an express irrevocability or dissolution clause in the trust deed or memorandum of association.

The Tribunal considered the Bombay High Court judgment in The Chamber of Tax Consultants & Ors. v. Commissioner of Income Tax (Exemptions) & Ors.. As recorded in the supplied order, the High Court held that a public charitable trust is deemed to be irrevocable by operation of law unless the instrument expressly reserves a power of revocation.

The Tribunal noted that the relevant consideration was whether the constitutional document contained a positive clause enabling revocation or re-transfer of income or assets to the settlor. Mere absence of an express declaration that the trust was irrevocable did not, by itself, render it revocable.

The Tribunal therefore held that absence of an express irrevocability or dissolution clause, without a finding that the constitutional document contained an express power of revocation, re-transfer of assets or re-assumption of control by the settlor, could not be sustained as an independent ground for rejecting the application.

Answer in Point No. 6 of Form No. 10AB

The CIT(E) had also treated the assessee’s answer “Yes” in point No. 6 of Form No. 10AB as false or incorrect information and as a specified violation under Explanation (g) to section 12AB(4).

The Tribunal, relying on the principle recorded from the jurisdictional High Court decision, held that the assessee could not be treated as having furnished false or incorrect information merely because it answered “Yes” to point No. 6 in the absence of an express irrevocability clause. The Tribunal also noted the observation that the online utility itself required the applicant to answer the question in that manner for the form to be uploaded.

Accordingly, the answer “Yes” furnished in point No. 6 could not, merely due to the absence of an express irrevocability clause, be treated as false or incorrect information or as a specified violation under Explanation (g) to section 12AB(4).

Restoration of 80G Approval Application

Since the CIT(E) had not examined the application on merits and the Departmental Representative had no objection to restoration, the Tribunal considered it appropriate in the interests of justice to set aside the impugned order and restore the application to the file of the CIT(E) for fresh adjudication.

The Tribunal specifically directed that the delay in filing Form No. 10AB be treated as condoned and that the application for regular approval under section 80G be examined on merits and in accordance with law.

The CIT(E) was directed not to reject the application merely because the trust deed or memorandum of association lacked an express irrevocability or dissolution clause. At the same time, the CIT(E) could verify whether the constitutional document contained any express provision permitting revocation, re-transfer of income or assets, or re-assumption of control by the settlor or any other person.

The Tribunal further directed verification of the charitable objects, genuineness of activities and compliance with the statutory conditions prescribed under section 80G(5) and the applicable Rules.

Directions of the Tribunal

1. The delay in filing Form No. 10AB shall be treated as condoned.

2. The CIT(E) shall examine the application for regular approval under section 80G on merits and in accordance with law.

3. The application shall not be rejected merely because the trust deed or memorandum of association does not contain an express irrevocability or dissolution clause.

4. The CIT(E) may verify whether the constitutional document contains any express provision permitting revocation, re-transfer of income or assets, or re-assumption of control by the settlor or any other person.

5. The answer “Yes” furnished in point No. 6 of Form No. 10AB shall not, merely in the absence of an express irrevocability clause, be treated as false or incorrect information or as a specified violation under Explanation (g) to section 12AB(4).

6. The CIT(E) shall verify the charitable objects, genuineness of the activities and compliance with the statutory conditions prescribed under section 80G(5) and the applicable Rules.

7. The assessee shall be afforded a reasonable and effective opportunity of being heard and of furnishing the requisite documents and explanations.

8. The CIT(E) shall thereafter pass a reasoned and speaking order in accordance with law, with all issues relating to substantive eligibility for approval under section 80G left open for adjudication.

Final Decision

The Tribunal set aside the impugned order dated 31.12.2025 and restored the assessee’s application to the file of the CIT(E) for fresh adjudication. The delay in filing Form No. 10AB was directed to be treated as condoned. The Tribunal further held that the absence of an express irrevocability or dissolution clause, by itself, could not justify rejection, nor could the answer “Yes” in point No. 6 of Form No. 10AB be treated as false or incorrect information merely for that reason.

The CIT(E) was directed to examine the application on merits after providing a reasonable and effective opportunity to the assessee. The appeal was allowed for statistical purposes. The order was pronounced in the open court on 03.07.2026.

Cases Discussed

• The Chamber of Tax Consultants & Ors. v. Commissioner of Income Tax (Exemptions) & Ors., Writ Petition (L) No. 7587 of 2026, judgment dated 09.03.2026, neutral citation 2026:BHC-OS:6814-DB.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

This appeal has been preferred by the assessee against the order dated 31.12.2025 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as “the learned CIT(E)”], in Form No. 10AD. By the impugned order, the learned CIT(E) rejected the application filed by the assessee in Form No. 10AB under clause (iii) of the first proviso to section 80G(5) of the Income-tax Act, 1961[hereinafter referred to as “the Act”], seeking regular approval under section 80G of the Act.

2. The assessee has raised the following grounds of appeal:

1. The learned CIT (Exemptions) has erred in law and on facts in rejecting the application for registration solely on technical and procedural grounds.

2. The rejection on the ground that the trust deed does not expressly contain an irrevocability or dissolution clause.

3. The learned CIT (Exemptions) has erred in ignoring the settled legal principle that curable defects in the Trust Deed cannot be a valid ground for rejection of registration when the Trust objects are charitable and genuine.

4. The learned CIT (Exemptions) has erred in not granting an opportunity to cure the defect by amendment of trust deed, which is well recognized and judicially accepted practice.

5. The Learned CIT (Exemptions) erred in rejecting the application merely on the ground that Form 10AB was filed beyond the alleged time limit, without appreciating that the Appellant already held a valid provisional approval and the delay was procedural in nature.

6. The impugned order is passed in a mechanical manner without proper appreciation of submissions and without granting reasonable opportunity to rectify defects, thereby violating principles of natural justice.

7. The appellant craves leave to add, amend, alter or delete any of the above grounds at the time of hearing.

3. The assessee is stated to be a charitable society registered under the Bombay Public Trusts Act, 1950 and engaged in carrying out charitable activities in accordance with its stated objects.

4. The assessee was granted provisional approval under section 80G(5) of the Act in Form No. 10AC vide order dated 08.03.2023. The provisional approval was valid up to the assessment year 2025-26. The assessee thereafter filed an application in Form No. 10AB on 10.06.2025 under clause (iii) of the first proviso to section 80G(5), seeking regular approval under section 80G of the Act.

5. The learned CIT(E) observed that the assessee’s application in Form No. 10AB was initially incomplete and, therefore, issued a notice dated 22.09.2025 calling for the prescribed documents and information. The assessee furnished its online response on 01.12.2025. Upon consideration thereof, the learned CIT(E) held that, having obtained provisional approval on 08.03.2023, the assessee was required to file the application for regular approval within the period prescribed under clause (iii) of the first proviso to section 80G(5). Since Form No. 10AB was filed only on 10.06.2025, the learned CIT(E) treated the application as delayed by 21 months and beyond the permissible time limit. It was also observed that the assessee had not availed the benefit of the extended period granted under CBDT Circular No. 07/2024 dated 25.04.2024.

6. The learned CIT(E) further noted that, although the assessee had stated in Form No. 10AB that the trust was irrevocable, the trust deed or memorandum of association did not contain an express irrevocability or dissolution clause. The said declaration was, therefore, treated as false or incorrect information and as a specified violation under Explanation (g) to section 12AB(4). On these grounds, namely, belated filing of Form No. 10AB, absence of an irrevocability or dissolution clause, and the alleged specified violation, the application for regular approval under section 80G was rejected. Aggrieved, the assessee preferred the present appeal before the Tribunal.

7. The learned Authorised Representative (AR) submitted that the assessee has been carrying out charitable activities in accordance with its objects. He submitted that the assessee was granted provisional approval under section 80G(5) in Form No. 10AC dated 08.03.2023, which remained valid up to the assessment year 2025-26. The assessee thereafter filed its application in Form No. 10AB on 10.06.2025 seeki ng regular approval under section 80G.

8. The learned AR submitted that the assessee duly responded to the notice dated 22.09.2025 and furnished its online submissions on 01.12.2025. Notwithstanding the compliance made by the assessee, the learned CIT(E) rejected the application on technical and procedural grounds without examining the charitable character of the assessee or the genuineness of its activities.

9. It was submitted that the assessee was already holding provisional approval under section 80G(5) and that the delay in filing Form No. 10AB was procedural in nature. According to the learned AR, the application ought not to have been rejected at the threshold merely on account of the delay, particularly when no adverse finding had been recorded regarding the charitable objects or activities of the assessee.

10. As regards the absence of an express irrevocability or dissolution clause, the learned AR submitted that such absence could not constitute a valid ground for rejection of the application. Without prejudice, it was submitted that the alleged deficiency was curable and the learned CIT(E) ought to have afforded a reasonable opportunity to the assessee to rectify the same instead of rejecting the application.

11. The learned AR further submitted that the impugned order had been passed without proper appreciation of the facts and without granting an effective opportunity to cure the alleged procedural deficiencies. He, therefore, prayed that the impugned order be set aside and the matter be restored to the file of the learned CIT(E) for fresh adjudication on merits.

12. The learned Departmental Representative relied upon the impugned order passed by the learned CIT(E). However, he fairly stated that he had no objection if the matter was restored to the file of the learned CIT(E) for fresh adjudication in accordance with law after affording a reasonable opportunity of being heard to the assessee.

13. We have considered the rival submissions and perused the material available on record. The material facts are not in dispute. The assessee was granted provisional approval under section 80G(5) in Form No. 10AC dated 08.03.2023, valid up to the assessment year 2025-26. The assessee filed Form No. 10AB on 10.06.2025 seeking regular approval under section 80G. The learned CIT(E) rejected the application on the following three grounds:

i. delay of 21 months in filing Form No. 10AB;

ii. absence of an express irrevocability or dissolution clause in the trust deed or memorandum of association; and

iii. furnishing of allegedly false or incorrect information in point No. 6 of Form No. 10AB, which was treated as a specified violation under Explanation (g) to section 12AB(4).

14. It is also evident from the impugned order that the learned CIT(E) has not recorded any independent adverse finding regarding the charitable nature of the objects of the assessee or the genuineness of its activities. The application has substantially been rejected at the threshold on limitation and on the alleged defect in the constitutional document.

15. The revised registration and approval regime for charitable institutions introduced multiple forms, separate statutory timelines and approvals having different periods of validity. The successive extensions granted by the Board themselves indicate that charitable institutions faced practical difficulty in complying with the transitional requirements. Though such extensions cannot automatically be applied beyond the period prescribed therein, the circumstances which necessitated the extensions remain relevant while examining whether a procedural delay deserves to extinguish the assessee’s claim without any examination on merits.

16. In the present case, the assessee was already holding provisional approval under section 80G(5), and there is nothing in the impugned order to indicate that the delayed filing was accompanied by any deliberate suppression, contumacious conduct or attempt to obtain an unintended benefit. The rejection of the application without examination of the assessee’s substantive eligibility would, in the circumstances, result in the charitable institution being denied an adjudication on merits solely on account of a procedural lapse.

17. We are, therefore, of the considered view that the delay in filing Form No. 10AB deserves to be condoned and the application requires examination on merits in accordance with the statutory conditions governing approval under section 80G.

18. The other principal ground for rejection is that the trust deed or memorandum of association does not contain an express irrevocability or dissolution clause. The learned CIT(E) further treated the answer “Yes” furnished by the assessee in point No. 6 of Form No. 10AB as false or incorrect information constituting a specified violation under Explanation (g) to section 12AB(4).This issue now stands authoritatively considered by the Hon’ble jurisdictional High Court in The Chamber of Tax Consultants & Ors. v. Commissioner of Income Tax (Exemptions) & Ors., Writ Petition (L) No. 7587 of 2026, judgment dated 09.03.2026, neutral citation 2026:BHC-OS:6814-DB. The Hon’ble High Court has held as under that 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. The Hon’ble jurisdictional High Court has explained that a public charitable trust is deemed to be irrevocable by operation of law unless the instrument expressly reserves a power of revocation. The relevant test is, therefore, whether the constitutional document contains a positive clause enabling revocation or re- transfer of the income or assets to the settlor. Mere absence of an express declaration that the trust is irrevocable does not render it revocable.

19. The Hon’ble High Court has also held that an assessee cannot be treated as having furnished false or incorrect information merely because it answered “Yes” to point No. 6 of Form No. 10AB in the absence of an express irrevocability clause. The online utility itself required the applicant to answer the question in that manner for the form to be uploaded. Consequently, such an answer cannot, by itself, constitute a specified violation under Explanation (g) to section 12AB(4).Although the judgment of the Hon’ble jurisdictional High Court arose in the context of registration under section 12AB, the principle laid down therein directly applies to the objection raised in the present proceedings. The impugned order itself invokes Explanation (g) to section 12AB(4) and treats the answer furnished in the same Form No. 10AB as a specified violation. Further, the legal character of a public charitable trust registered under the Maharashtra Public Trusts Act, 1950 does not vary merely because the application under consideration is for approval under section 80G.

20. Therefore, the absence of an express irrevocability or dissolution clause, without any finding that the constitutional document contains an express power of revocation, re-transfer of assets or re-assumption of control by the settlor, cannot be sustained as an independent ground for rejecting the assessee’s application. Similarly, the answer “Yes” furnished in point No. 6 of Form No. 10AB cannot be treated as false or incorrect information merely because the deed does not contain an express clause declaring the assessee to be irrevocable.

21. Since the learned CIT(E) has not examined the application on merits and the learned Departmental Representative has also expressed no objection to restoration of the matter, we consider it appropriate, in the interests of justice, to set aside the impugned order and restore the application to the file of the learned CIT(E) for fresh adjudication.

22. Accordingly, the impugned order dated 31.12.2025 is set aside and the matter is restored to the file of the learned CIT(E) with the following directions:

i. The delay in filing Form No. 10AB shall be treated as condoned.

ii. The learned CIT(E) shall examine the application for regular approval under section 80G on merits and in accordance with law.

iii. The application shall not be rejected merely because the trust deed or memorandum of association does not contain an express irrevocability or dissolution clause. The learned CIT(E) may, however, verify whether the constitutional document contains any express provision permitting revocation, re-transfer of the income or assets, or re- assumption of control by the settlor or any other person.

iv. The answer “Yes” furnished by the assessee in point No. 6 of Form No. 10AB shall not, merely in the absence of an express irrevocability clause, be treated as false or incorrect information or as a specified violation under Explanation (g) to section 12AB(4).

v. The learned CIT(E) shall verify the charitable objects, genuineness of the activities and compliance with the statutory conditions prescribed under section 80G(5) and the applicable Rules.

vi. The assessee shall be afforded a reasonable and effective opportunity of being heard and of furnishing the requisite documents and explanations.

vii. The learned CIT(E) shall thereafter pass a reasoned and speaking order in accordance with law. All issues relating to the assessee’s substantive eligibility for approval under section 80G are left open for adjudication.

23. In view of the above directions, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 03.07.2026.