Keshavlal Vajechand Kapadia Charity Trust Vs CIT (ITAT Mumbai)
Material Facts: The assessee trust filed four appeals against separate orders of the Commissioner of Income Tax (Exemption) concerning renewal of registration under section 12AB and approval under section 80G of the Income-tax Act, 1961. Since the appeals arose from the same proceedings and involved common facts relating to renewal of registration and approval, they were heard together.
The assessee had applied for renewal of registration under section 12AB and approval under section 80G. By orders dated 14.02.2026, the CIT (Exemption) rejected both applications on the ground that the trust deed did not contain an express clause declaring the trust irrevocable or stating that the trust property was irrevocably dedicated for charitable purposes. According to the CIT (Exemption), the absence of such a clause meant that the statutory requirement under section 332(2)(v) of the Income Tax Act, 2025, was not satisfied.
During the pendency of the appeals, the Bombay High Court, 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 the trust deed specifically permits revocation, and directed that applications should not be rejected merely because the trust deed lacked an express irrevocability clause. Pursuant to that judgment, the CIT (Exemption) granted registration under section 12AB and approval under section 80G. However, while granting the registration and approval, the CIT (Exemption) inserted observations stating that the Revenue proposed to challenge the Bombay High Court judgment before the Supreme Court and that the registration, approval and consequential benefits would remain subject to the outcome of such proceedings.
