Parmatma Devi Trust vs Income Tax Officer

Per Raj Kumar Chauhan, Judicial Member:

The appeal by the assessee is directed against the order of ld. CIT( Exemptions), Delhi dated 19.03.2026 wherein the application of the assessee in Form 10AB for registration under Section 12A of the Inco me-tax Act, 1961 (hereinafter referred to as ‘the Act’) was rejected.

At the outset, the learned Counse l for the assessee stated that the asse ssee’s application in Form No.1 0AB seeking registration under Section 12A was re jected by the learned CIT(Exemptio n) for the reaso n that in the trust deed, there is no provision that the trust is revocable or irrevocable and how the asse ts of the trust are to be transferred in case of dissolution of the trust. The learned Counsel stated that Hon'ble Bombay High Court in the case of T he Chamber of Tax Consultants Vs. CIT( Exemption) & Ors. in Writ Petition (L) No.7587 of 2026, judgement dated 9^th March, 20 26, has held that a public charitable tr ust is deemed ir revocable by operation of law unless the trust deed expressly provides otherwise, and that absence of an explicit irrevocability clause cannot be ground for rejectio n of registration or renewal under Section 12AB. It was fur ther directed by the Hon’ble High Cour t that applications for registratio n under Section 12AB shall not be re jected solely on the ground of absence of an irrevocab ility clause and that answering “Yes” in Form 10AB in such circumstances cannot be treated as furnishing false or incorrect information.

When these facts were confronted to the learned CIT-DR, he could not controvert the above fact situat ion.

After going through the argume nts of both the sides as well as the case law o f Hon'ble Bombay High Court cited by the learned Counse l for the assessee in the case of The Chamber of Tax Consultants (supra) and also the order of learned CIT(Exemptio n), we noted that apart fro m irrevocability clause, learned CIT(Exemption) has not examined and has not carried out necessary verification in support of the genuineness of the activities, charitable obje cts and commencement o f its activities. Hence, we set aside the order of learned CIT(Exemptio n) with a direction that he will not deny registration on the issue of irrevocability clause but, he can examine other aspects like genuineness of the activities, char itable objects and commencement of the activ ities, etc. In terms of the above, the order of learned CIT(Exe mption) is set aside and the matter is restored back to the file of learned CIT(Exemptio n) for deciding the same de-novo after providing sufficient opportunity of being heard to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.