Case Law Details
Shri Meghji Ravji & Hansbai Meghji Rambhiya Public Charitable Trust Vs CIT (ITAT Mumbai)
Mumbai ITAT: Absence of Irrevocability Clause in Trust Deed Alone Cannot Justify Rejection of U/s 12AB Registration
The Mumbai ITAT held that registration under section 12AB cannot be denied merely because the trust deed does not contain an irrevocability or dissolution clause. The Commissioner (Exemptions) had rejected the trust’s application under section 12AB(4) solely on the ground that the trust deed lacked an irrevocability clause. The Tribunal observed that the issue was squarely covered by the Bombay High Court’s decision in Chamber of Tax Consultants and Others v. CIT (184 taxmann.com 374), which held that the absence of such a clause is not a valid ground for refusing registration under section 12AB. Following the binding jurisdictional High Court precedent, the Tribunal set aside the CIT(E)’s order and restored the matter for fresh consideration in accordance with the law laid down by the High Court. The assessee’s appeal was accordingly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Exemption), Mumbai, [“Ld. CIT(E)”] dated 14.02.2026 in denying registration under section 12AB(4) on the ground that the assessee did not include irrevocable clause or dissolution clause in the trust deed.
2. Inspite of issue of notice, none appeared on behalf of the assessee, nor any adjournment was sought. Since the issue involved in the appeal is covered by the decision of the Hon’ble Jurisdictional High Court, we dispose of this appeal after hearing the Ld. DR.
3. In this appeal, the assessee has raised the following grounds of appeal.
“1. The Learned Commissioner of Income Tax (The CIT(E)) erred in rejecting the application for granting registration U/s 12A of the Act on the Ground of Noninclusion of irrevocability or dissolution clause in Trust Deed/ MOA and specified violation as per explanation (g) to the Section 12AB (4) of the Income Tax Act, 1961.
2. The learned CIT(E) erred in rejecting the application for Registration without giving adequate opportunity of being heard or submit required explanation and without giving any Show Cause or specific opportunity as required by law before rejection, violating the principles of natural justice and hence, it is bad in law and lacs legal infirmity.
3. The learned CIT(E) erred in rejecting the application for registration stating specified violation as per explanation (g) to the Section 12AB (4) of the Income Tax Act, ,1961in mentioning YES in the application in Form 10AB for the question Whether the trust deed contains clause that the trust is irrevocable particularly without there been any reference in Income tax Act/ Rules for application of registration u/s 12A of Income tax Act, 1961 in respect of the same and hence making it is bad in law and lacks legal infirmity.”
4. On perusal of the order passed by the Ld. CIT(E), it is noticed that registration to the assessee was denied on the ground that the trust deed of the assessee did not specify the irrevocable nature of the trust. It is observed that an identical issue came up for consideration before the Hon’ble Jurisdictional High Court in the case of Chamber of Tax Consultants and Others vs. CIT reported in 184 taxmann.com 374, wherein the Hon’ble Jurisdictional High Court held that registration u/s12AB cannot be denied in the absence of an irrevocable clause in the trust deed. Therefore this appeal is restored to the file of the Ld. CIT(E) to reconsider the application of the assessee for registration u/s 12AB in the light of the decision of the Hon’ble Jurisdictional High Court in the case of Chamber of Tax Consultants and Others vs. CIT (supra).
5. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21/07/2026
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