St. Ignatius Church Vs CIT (Exemptions) (ITAT Mumbai)
Summary: The assessee, St. Ignatius Church, a religious-cum-charitable institution registered as a public trust under the Maharashtra Public Trusts Act, 1950 since 20/06/1955, filed Form No. 10AB on 02/09/2025 under section 12A(1)(ac)(ii) seeking renewal of its regular registration under section 12AB for Assessment Year 2026-27. The CIT(E), Mumbai rejected the application on the ground that the assessee had not furnished a formal trust deed/Memorandum of Association or a scheme settled by the Charity Commissioner or a competent Court, and held that the documents furnished did not constitute an instrument or document evidencing its creation or establishment.
Before the Tribunal, the assessee submitted that Rule 17A(2)(b) expressly recognises applicants created or established otherwise than under an instrument and permits them to furnish a document evidencing creation or establishment. It relied upon its application before the Charity Commissioner, the registration certificate issued after statutory enquiry and its longstanding income-tax registration, including Form No. 10AC dated 23/09/2021.
The Tribunal noted that Rule 17A(2)(a) applies where an applicant is established under an instrument, whereas Rule 17A(2)(b) specifically applies where it is established otherwise than under an instrument. Consequently, insisting upon a formal trust deed in every case would render the distinction between the two clauses otiose. The Tribunal found that the assessee’s statutory registration under the Maharashtra Public Trusts Act, original application before the Charity Commissioner, previous registration under the Income-tax Act, substituted-regime registration and other documents constituted relevant evidentiary material regarding its creation, establishment and continued existence.
It also held that the absence of a formal trust deed could not by itself justify rejection of renewal under section 12AB. The Tribunal relied upon Laxminarayan Maharaj and Another v. CIT and Others, Merciful Jesus Church v. CIT(E), Tsurphu Labrang v. DIT(E) and the Coordinate Bench decision in St. Joseph’s High School v. CIT(E). The Tribunal further observed that the CIT(E)’s stated purpose of securing a formal governing instrument was an advisory administrative consideration that could not enlarge the statutory requirements under section 12AB read with Rule 17A(2). It held the approach of the CIT(E) to be unduly restrictive and set aside the impugned order dated 29/03/2026. The CIT(E) was directed to grant renewal of registration under section 12AB in accordance with law and to dispose of the application expeditiously. The appeal filed by the assessee was accordingly allowed.
Cases Discussed
- St. Joseph’s High School v. CIT(E), ITA Nos. 5646 and 5849/Mum/2026, order dated 05/08/2026.
- Laxminarayan Maharaj and Another v. CIT and Others, (1984) 150 ITR 465.
- Merciful Jesus Church v. CIT(E), (2016) 72 taxmann.com 206.
- Tsurphu Labrang v. DIT(E), ITA Nos. 4941 and 3061/Del/2011, order dated 08/09/2015.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT MUMBAI
The present appeal filed by the assessee arises out of the order dated 29/03/2026 passed by the Ld. Commissioner of Income-tax (Exemptions), Mumbai [“Ld. CIT(E)”], rejecting the assessee’s application for renewal of registration u/s. 12AB of the Income-tax Act, 1961 (“the Act”) for Assessment Year 2026-27.
2. Brief facts of the case are as under:-
Assessee, St.Ignatius Church, is a religious-cum-charitable institution registered as a public trust under the Maharashtra Public Trusts Act, 1950 since 20/06/1955. It filed an application in Form No.10AB on 02/09/2025 under sub-clause (ii) of section 12A(1)(ac) seeking renewal of its regular registration. During the proceedings, the Ld.CIT(E) called upon the assessee to furnish, inter alia, a self-certified copy of the instrument of trust/Memorandum of Association. In response, the assessee furnished the application made before the Registrar of Public Trusts, the certificate of registration issued by the Charity Commissioner and other supporting documents.
2.1. The Ld.CIT(E), however, observed that these documents merely evidenced the registration of the public trust and did not constitute an instrument or document evidencing its creation or establishment. He further observed that, in the absence of a trust deed/MOA or a scheme settled by the Charity Commissioner or a competent Court, the requisite satisfaction regarding the objects, intended beneficiaries, administration and genuineness of the activities could not be arrived at.
2.2. The Ld.CIT(E) thus rejected the application for non-compliance with section 12AB(1)(b) read with Rule 17A(2) of the Income-tax Rules, 1962 (“the Rules”).
Aggrieved by the impugned order, the assessee is in appeal before this Tribunal.
3. The Ld. AR submitted that the assessee is an old religious and charitable institution registered as a public trust since 20/06/1955 and has enjoyed registration under the Act for several decades. It was submitted that the assessee was granted registration under the substituted regime vide Form No.10AC dated 23/09/2021 and that neither its objects nor the nature of its activities has undergone any change. The Ld.AR contended that Rule 17A(2)(b) specifically recognises an applicant created or established otherwise than under an instrument and permits such applicant to furnish any document evidencing its creation or establishment. The application made before the Charity Commissioner and the registration certificate issued after the statutory enquiry conducted under the Maharashtra Public Trusts Act, 1950 sufficiently evidence the creation, establishment and continued existence of the assessee.
3.1. Reliance was placed on the decision of Coordinate Bench of this Tribunal in case of St. Joseph’s High School v. CIT(E), ITA Nos.5646 and 5849/Mum/2026, order dated 05/08/2026.
3.2. The Ld.DR relied upon the impugned order and submitted that, in the absence of a constitutive instrument, the Ld.CIT(E) could not have examined the objects, administration and activities of the assessee as required u/s.12AB of the Act.
We have perused the submissions advanced by both sides in light of the record placed before us.
4. The controversy before us is narrow. The assessee’s application for renewal of registration u/s.12AB was rejected essentially because it does not possess a separate written instrument of trust/MOA and, despite requisition, could not furnish the same. It is not in dispute that the assessee is an old religious and charitable institution registered as a public trust under the Maharashtra Public Trusts Act, 1950 since 20/06/1955. It has enjoyed recognition under the Act for several decades and was granted registration under the substituted regime vide Form No.10AC dated 23/09/2021. No adverse finding regarding its religious or charitable objects or the genuineness of its activities has been recorded in the impugned order.
4.1. In the present case, the assessee furnished the application made before the Charity Commissioner (page13 to 17), the statutory registration certificate issued under the Maharashtra Public Trusts Act, 1950 (page 20), its previous registration under the Act (page 27), including the registration granted under the substituted regime, and other documents evidencing its continued existence and activities. The registration granted by the Charity Commissioner follows statutory enquiry into the existence and nature of a public trust. The assessee’s recognition by the competent statutory authority as a public trust for more than seven decades constitutes relevant evidentiary material for the purpose of Rule 17A(2)(b) and cannot be discarded merely because it is not a formal trust deed.
4.2. The principal question is whether the absence of a formal written trust deed, by itself, constitutes a valid ground for rejection of an application for renewal of registration u/s.12AB where the applicant asserts that it was established otherwise than under an instrument and furnishes other documents evidencing its creation and continued existence. In this regard, Rule 17A(2)(a) applies where the applicant is created or established under an instrument, whereas Rule 17A(2)(b) specifically applies where the applicant is created or established otherwise than under an instrument and requires a self-certified copy of the document evidencing its creation or establishment. Thus, the Rule itself recognises that a religious or charitable institution may be created or established otherwise than under a formal instrument. If a formal trust deed were an indispensable requirement in every case, the distinction consciously maintained between clauses (a) and (b) would be rendered otiose.
4.3. The Hon’ble Madhya Pradesh High Court in Laxminarayan Maharaj and Another v. CIT and Others reported in (1984) 150 ITR 465 held that, where a trust was not created under a formal instrument, the expression “document evidencing the creation of the trust” could not be restricted to a document directly or contemporaneously creating the trust. It includes all evidentiary documents affording a logical basis for inferring the creation and existence of the trust.
4.4. Similar view was taken by the Tribunal in Merciful Jesus Church v. CIT(E) reported in (2016) 72 taxmann.com 206 and Tsurphu Labrang v. DIT(E) in ITA Nos.4941 and 3061/Del/2011, order dated 08/09/2015, wherein it was held that Rule 17A itself recognises institutions established otherwise than under a formal instrument and that the execution of a formal trust deed is not, by itself, indispensable where other documentary evidence establishes the institution’s creation and existence.
4.5. We also find that the observations of the Ld.CIT(E) on page 8 of the impugned order are significant. The Ld.CIT(E) has recorded that the assessee’s existing regular registration would continue to remain valid till Assessment Year 2026-27 and that the purpose of the rejection was not to cause inconvenience or disruption in its day-to-day management and functioning. He further characterised the rejection as a “gentle reminder” to formulate a suitable instrument or to obtain a scheme for its management from the Charity Commissioner or a competent Court. These observations demonstrate that the rejection was not founded upon any adverse conclusion regarding the assessee’s objects or the genuineness of its activities, but was essentially intended to secure the execution of a formal governing instrument.
4.6. Such an advisory consideration, however desirable it may be from an administrative perspective, cannot substitute or enlarge the statutory requirements prescribed under section 12AB read with Rule 17A(2). The statutory distinction between an institution established under an instrument and one established otherwise than under an instrument must be given full effect.
4.7. This controversy is also subsequently covered by the decision of the Coordinate Bench in St. Joseph’s High School v. CIT(E), ITA Nos.5646 and 5849/Mum/2026, order dated 05/08/2026, wherein, in analogous circumstances involving a public charitable institution registered under the Maharashtra Public Trusts Act and continuously recognised under the Act, it was held that the absence of a formal written trust deed or MOA could not, by itself, constitute a valid ground for refusing renewal u/s.12AB where cogent documentary evidence regarding the creation, establishment and continued existence of the institution had been furnished.
4.8. In view of the above, we hold that the approach adopted by the Ld.CIT(E) is unduly restrictive. Where Rule 17A(2)(b) expressly recognises institutions established otherwise than under an instrument, the enquiry cannot conclude merely upon finding that no formal trust deed exists. The alternative documentary evidence furnished by the applicant deserves consideration based on continued existence of the institution. In the present case, the statutory registration under the Maharashtra Public Trusts Act, the original application filed before the Charity Commissioner, the assessee’s long-standing registration under the Act, the registration granted under the substituted regime and the material evidencing its continued existence could not be disregarded merely because they did not constitute a formal trust deed. It is aalso noted that the Ld.CIT(E) has not recorded any adverse finding regarding the religious or charitable objects of the assessee, the genuineness of its activities or non-compliance with any other law material for achieving its objects.
4.9. Accordingly, the impugned order dated 29/03/2026 is set aside. Considering that the assessee has been continuously recognised as a religious-cum-charitable institution, is registered under the Maharashtra Public Trusts Act since 20/06/1955, has enjoyed registration under the Act for several decades and has been granted registration under the substituted regime vide Form No.10AC dated 23/09/2021, we direct the Ld.CIT(E) to grant renewal of registration u/s.12AB to the assessee in accordance with law.
4.10. Since the assessee is an old and continuously recognised religious-cum-charitable institution and the issue involved is essentially one relating to the documentary requirement for renewal of registration, we direct the Ld.CIT(E) to dispose of the assessee’s application as expeditiously as possible and, preferably, within a reasonable time from the date of receipt of this order, in accordance with the directions contained herein. The Registry is further directed to issue a certified copy of this order forthwith upon an application being made by the Ld.AR on behalf of the assessee, to facilitate compliance with the aforesaid directions.
Accordingly, the grounds raised by the assessee are accordingly allowed.
In the result, the appeal filed by the assessee stands allowed.
Order pronounced in the open court on 31-08-2026
