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Judgment
Per Renu Jauhri, Accountant Member:
This appeal by the assessee is directed against the order the Ld. Commissioner of Income Tax (Exemption), Delhi [hereinafter referred to as the ‘Ld. CIT(E)] order dated 16.03.2026 passed u/s 12AB(1)(ac)(ii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) rejecting the application of the assessee filed in Form 10AB for grant of approval u/s 12A(1)(ac)(ii) of the Act.
The assessee has raised the following grounds of appeal:-
“1.1That on the facts and circumstances of the case, the CIT(Exemption) has erred in rejecting the application for registration u/s 12AB of the Income-tax Act, 1961 without properly appreciating the documents already on record.
1.2That there being no adverse finding or allegation regarding the genuineness of the activities/objects of the Appellant Trust, thus, the action of the CIT(E) in rejecting the registration for want of documents already on record is arbitrary and not sustainable in law.
2.1That in any case, the absence of an irrevocability clause in the trust deed has been incorrectly treated as a ground for rejection of registration, without properly appreciating that in the case of a public charitable trust, irrevocability is presumed in law and need not be expressly provided in the trust deed and therefore the basis of rejection is unsustainable
2.2That absence of an irrevocability clause cannot be a basis for denial of registration, as held in The Chamber of Tax Consultants & Ors. v. Commissioner of Income Tax (Exemptions) (Bombay High Court) and as such the action of the CIT(E) reflects a mechanical approach without proper application of mind.
3 That the order passed by the CIT(E) is illegal and not sustainable in law.
4 That the Appellant carves leave to add, amend, alter or forego any of the grounds raised in the memo of appeal.”
Brief facts are that the assessee filed an application in Form 10AB for registration u/s 12A(1)(ac)(ii) of the Act before CIT(E) on 24.09.2025. Vide notice dated 05.03.2026, the CIT(E) pointed out the following deficiencies:
(i)Absence of Irrevocable / Dissolution Clause in the trust deed.
(ii)Copy of old 12A registration issued prior to 1.4.2021. Vide reply submitted on 12.03.2026 the assessee submitted a copy of the registration dated 29.01.2002 and explained that the incorporation of irrevocability and dissolution clauses by way of a supplementary trust deed is underway.
However, vide order dated 16.03.2025, the application of the assessee was rejected on the ground that copy of registration u/s 12A prior to 1.4.2021, and financial statement for F.Y. 2024-25 were not submitted and trust deed did not contain the dissolution and irrevocability clause.
Aggrieved, the assessee has filed appeal before the Tribunal.
Before us, Ld. AR has submitted a copy of the Supplementary Trust Deed executed on 16.03.2026 and has further argued that there was no such mandatory requirement for registration. He has relied on the decision of the Hon’ble High Court of Bombay in the case of Chamber of Tax Consultants v. CIT(Exemption) [2026] 184 taxmann.com 374(Bombay), wherein it has been held as under:
“Further, section 12AB did not contain any condition that trust deed must have an explicit clause stating that it was irrevocable before registration was granted - It was also noted that under MPT Act, even if a public trust was revoked, then assets/ properties of trust would never go back to settlor and would be disposed of and sale proceeds of same would be deposited in Public Trusts Administration Fund - Whether a public charitable trust was deemed irrevocable by operation of law unless instrument of trust expressly provided a power of revocation Held, yes Whether thus, absence of an explicit irrevocability clause would not be a ground for rejecting an application for registration or renewal under section 12AB Held, yes Whether thus, impugned order passed rejecting applications for registration under section 12AB was to be quashed and set aside - Held, yes”
He has further stated that a copy of registration issued in 2002 was filed, which was not considered by Ld. CIT(E)
On the other hand, the Ld. DR, strongly relied upon the order of CIT(E).
We have heard the rival submissions and perused the material available on record. We note that the amended trust deed has been filed by the assessee incorporating the dissolution and irrevocability clause even though, there is no such requirement as held by the Hon’ble Bombay High Court in the case of Chamber of Tax Consultants vs. CIT(E) (supra). After considering the facts and circumstances, we deem it appropriate to restore the matter for fresh consideration on merits to the CIT(E), who will provide reasonable opportunity to the assessee to furnish requisite details.
In the result, appeal of the assessee is allowed for statistical purposes.