Bai Nemtullabai A Maskati Trust Vs CIT (ITAT Mumbai)
The ITAT Mumbai considered two appeals filed by the assessee trust against orders 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 trust had initially applied for renewal of registration under Section 12AB and approval under Section 80G. By separate orders dated 15 April 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 the absence of such a clause to mean that the statutory requirements contemplated under Section 332(2)(v) of the Income Tax Act, 2025 were not satisfied.
During the pendency of the appeal against the rejection, the Bombay High Court considered the issue in Chamber of Tax Consultants & Others vs. CIT (Exemption) in Writ Petition (L) No. 7587 of 2026. The High Court held that a public charitable trust is presumed to be irrevocable by operation of law unless its instrument contains a specific provision permitting revocation. It also directed that applications for registration, renewal or approval should not be rejected merely because the trust deed lacked an explicit irrevocability clause.
