Muslim Majlis Vs CIT(Exmeption) (ITAT Mumbai Bench)
Portal Cannot First Force a Trust to Say “Yes” & Then Punish It for Saying “Yes”: ITAT Restores 12AB Renewal Rejected for Absence of Irrevocability Clause
Summary: The assessee, Muslim Majlis, was a charitable trust enjoying registration u/s 12 since the year 1973. It had also been granted registration under the amended regime for AYs 2022-23 to 2026-27. When the trust applied for renewal of its registration u/s 12AB, the CIT(E) rejected the application on the ground that its trust deed did not contain an express clause declaring that the trust was irrevocable, nor did it contain a specific clause dealing with dissolution or winding up.
The CIT(E) went a step further. In Form No. 10AB, Row No. 6 required the applicant to answer whether the trust deed contained a clause declaring the trust to be irrevocable. The income-tax portal practically compelled the applicant to select “Yes”, because selection of “No” prevented the form from being uploaded. The CIT(E), however, treated the very answer of “Yes” as furnishing false or incorrect information, since the trust deed did not contain an express irrevocability clause. According to the CIT(E), this amounted to a “specified violation” under Explanation (g) to section 12AB(4).
