National Library Vs CIT (Exemptions) (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal considered two appeals filed by the assessee trust against orders of the CIT (Exemption) concerning registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The appeals arose from the same proceedings and were heard together.
The assessee had applied for renewal of registration under Section 12AB and approval under Section 80G. By separate orders dated 28.03.2026, the CIT (Exemption) rejected both applications primarily because the trust deed did not contain an express clause declaring the trust irrevocable or providing for irrevocable dedication of trust property for charitable purposes. The CIT (Exemption) considered that the absence of such a clause meant the statutory requirements under Section 332(2)(v) of the Income Tax Act, 2025, were not satisfied.
During the pendency of the appeal, the Bombay High Court, in Writ Petition (L) No. 7587 of 2026 in Chamber of Tax Consultants & Others vs. CIT (Exemption), held that a public charitable trust is presumed to be irrevocable by operation of law unless its trust instrument contains a specific provision permitting revocation. The High Court directed that applications for registration, renewal or approval should not be rejected merely because the trust deed lacks an explicit irrevocability clause.
