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
