IMC Ramakrishna Bajaj National Quality Award Trust Vs CIT (Exemptions) (ITAT Mumbai)
The appeal was filed by IMC Ramakrishna Bajaj National Quality Award Trust against the order of the CIT (Exemption) concerning its registration under Section 12AB of the Income-tax Act, 1961.
The assessee had initially applied for registration under Section 12AB. By order dated 28.03.2026, the CIT (Exemption) rejected the application primarily because the trust deed did not contain an express clause declaring the trust irrevocable or stating that its property had been irrevocably dedicated to charitable purposes. The rejection was based on the stated statutory requirements under section 332(2)(v) of the Income Tax Act, 2025.
During the pendency of the appeal, the Bombay High Court, in Chamber of Tax Consultants & Others vs. CIT (Exemption), considered the issue of rejection of registration applications solely because of the absence of an express irrevocability clause. The High Court held that a public charitable trust is presumed to be irrevocable by operation of law unless the trust instrument contains a provision permitting revocation. It directed authorities not to reject registration applications merely because the trust deed lacked an explicit irrevocability clause.
Following the High Court judgment, the CIT (Exemption) granted Section 12AB registration to the assessee. However, the registration order contained observations stating that the Revenue was contemplating challenging the High Court judgment before the Supreme Court. The order therefore indicated that the registration and consequential benefits would remain subject to the ultimate outcome of such proceedings.
