Sardar Manmohan Singh Charitable Trust vs CIT(Exemption)

1.

That the impugned order dated 19.03.2026 vide which the application dated 30.09.2025 of the Appellant u/s 12A(1)(ac)(ii) of the Income Tax Act, 1961 (IT Act) was rejected, solely on the ground that the Trust Deed does not contain a clause stipulating that the Trust is irrevocable, is erroneous, unsustainable and liable to be set aside on account of being contrary to the settled principles of law.

2.

That the learned CIT (Exemption) has grossly erred in rejecting the application of the Appellant Trust on the ground that for a public Trust seeking the benefit of tax-exemption u/s 12A, the instrument of Trust must have an irrevocability clause. The said observations of the learned CIT (Exemption) are completely erroneous, unsustainable and contrary to law.

3.

That section 12AB (1) (b) of the IT Act, 1961 mandates that while hearing an application under 12A (1) (ac)(ii), the Principal Commissioner OR Commissioner has to be satisfied as to the objects of the trust, the genuineness of its activities, and compliance with other material laws. This Section does not contain any stipulation that the Trust Deed must have an explicit clause stating that it is irrevocable, before registration is granted.

4.

That it is the settled principle of law that a Trust is implied / deemed to be irrevocable, unless it is expressly made to be revocable. The impugned order has wrongly understood the absence of an explicit clause of irrevocability to mean that the Deed was revocable, despite there not being any clause of making the Deed revocable. The absence of an explicit clause of irrevocability OR revocability, would lead to only one conclusion in law, that the Trust is irrevocable.

5.

That the Honourable Supreme Court in Shiromani Gurudwara Prabandhak Committee v. Som Nath Dass, (2000) 4 SCC 146 has held that once an endowment is made and property is parted with for its use for public purpose, it is final and irrevocable.

6.

That the law on this aspect has been succinctly reiterated by the Ld. Division bench of the Honourable Bombay High Court in The Chamber of Tax Consultants and Ors. v. The Commissioner of Income Tax (Exemptions) and Ors. MANU/MH/2679/2026 wherein it has inter alia been held that silence in the Trust Deed implies irrevocability, not revocability, and that the application for registration cannot be rejected on the ground of absence of a clause of irrevocability in the Trust Deed.

7.

That the Honourable ITAT Mumbai in Amita Memorial Trust v. CIT (Exemption), ITA No. 1262 and 1263/MUM/2026, vide judgement dated 30.03.2026, while relying on the decision in The Chamber of Tax Consultants (Supra), set aside the order of the CIT(E) rejecting the renewal application on the ground that the Trust Deed does not contain an explicit clause in respect of trust being irrevocable and does not provide for the manner of its dissolution.

8.

That this Honourable Tribunal in Batta Education Foundation v. CIT (Exemptions), in ITA No. 867/Del/2016 vide judgement dated 08.06.2018 has held that at the time of processing application for registration under section 12AA of the IT Act, the powers of the Ld. CIT are limited, and that rejecting the application on the ground that the deed does not have an Irrevocability Clause is erroneous and impermissible.

9.

That this Honourable Tribunal in Radisson India Charitable Foundation Vs. ITO, in ITA No. 3976 and 39787/Del/2024, vide judgment dated 22.01.2025, held that keeping in view Section 115TD of the IT Act, the relevance of having dissolution clause and the apprehension on the transfer of net asset to any other entity has been taken care of and non-mention of the same cannot be a ground to deny the registration u/s 12AB of the IT Act. In the present case, the Appellant Trust stands on a better footing, since Clause 26 of the Trust Deed contains the Dissolution Clause which further establishes that the Trust Deed is irrevocable.

10.

That the reliance placed in the impugned orders on the Income Tax Act, 2025 (ITA 2025) is entirely misplaced. There is no condition in Section 332 of the 2025 Act that there should be an irrevocability clause in the Trust Deed. In fact, it is reiterated that absence of a specific clause of revocability makes the Trust irrevocable, and consequently, eligible for registration. There is no condition in Section 332 (2) of the ITA 2025 which would not be satisfied on account of absence of an irrevocability clause in the Trust Deed.

11.

That the Appellant Trust had been previously granted registration under Section 12A read with Section 12AA and approval under Section 80G of the IT Act w.e.f. A.Y. 2013-14 onwards. The Appellant Trust was also previously granted registration under Section 12A (1) (ac) (i) of the IT Act, 1961 on 29.03.2022 for the period of Assessment Year (A.Y.) 2022-23 to A.Y. 2026-2027. That the statutory parameters for assessment of the eligibility of the Appellant Trust have not undergone any material change and the Ld. CIT has arbitrarily, and without any statutory basis, introduced an extra stipulation for the Appellant Trust to meet, which is not permissible in law.

“…3. The entire controversy in the present appeals before us is in respect of absence of explicit clause in the Trust Deed regarding irrevocability and dissolution which according to the ld. CIT(E) renders the assessee trust liable for rejection of its registration u/s 12AB of the Act. There are two appeals. Appeal vide ITA no.1262/Mum/2026 is in respect of rejection of renewal of registration u/s 12AB sought by the assessee by filing an application in Form 10AB u/s 12A(1)(ac)(ii) of the Act. The other appeal in ITA no.1263/Mum/2026 is in respect of seeking approval u/s 80G (5)(ii) for which also, assessee had filed its Form 10AB.

3.1.

In the proceedings conducted by the ld. CIT(E), assessee was required to demonstrate if its Trust Deed contains clause regarding irrevocability and dissolution for which it is contended that assessee trust is intended to exist permanently and will continue perpetually, therefore, no separate clause on irrevocability or dissolution is required in the Trust Deed. Ld. CIT(E) thus, observed that Trust Deed of the assessee does not contain clause regarding irrevocability and dissolution which does not give statutory safeguard to the Revenue to ensure that the assets of the assessee shall be applied solely towards charitable purposes and upon its dissolution, shall be transferred to another trust or institution having similar charitable objects as mandated under the provisions of the Act. According to him, it is explicitly mentioned in the statute itself that the benefit of tax exemption u/s 11 is restricted only to public charitable trusts or public religious trusts which are not revocable in nature. For this, he referred to the words "subject to provisions of section 60 to 63" in section 11. He also took note of the reply given by the assessee in point no.6 of Form 10AB where the question mentioned is "whether the Trust Deed contains clause that the trust is irrevocable?" to which the assessee had furnished its answer as "Yes". On this answer of the assessee in Form 10AB, he observed that since there is no specific clause regarding irrevocability or dissolution of the assessee trust mandatorily required under the provisions of the Act, furnishing of such answer tantamount to furnishing of false or incorrect information falling within the ambit of "specified violation" as defined under Explanation (g) to section 12AB(4) of the Act. He thus, held that the application filed by the assessee in Form 10AB for regularization of provisional registration is not allowable on the grounds of non-inclusion of irrevocability or dissolution clause in the Trust Deed and specified violation incurred by the assessee under Explanation (g) to section 12AB (4) of the Act. Thus, the application of the assessee for regularization of provisional registration filed in Form 10AB was rejected. Aggrieved, assessee is in appeal before the Tribunal.

4.

Before us, ld. Counsel for the assessee referred to the paper book placed on record containing 73 pages to corroboratively demonstrate its case. Assessee trust was created vide Trust Deed dated 29.04.1987 with the charitable objects of relief of poor, education and medical relief. Assessee trust was granted registration u/s 12A vide Registration No. TR.25822 dated 12.08.1987, issued by the Commissioner of Income Tax, Bombay City - 4, Bombay. It was also granted certificate of registration/approval u/s 80G(5) vide certificate dated 15.10.1987 bearing Registration No. TC/80G/CH - 1104A (8). In order to comply with the new registration regime effective from 01.04.2021, assessee filed renewal application in terms of section 12AB, first by seeking provisional registration vide Form No.10AC which was granted vide registration dated 31.08.2021 for the period from A.Y.2022-23 to A.Y.2026-27. Thereafter, for the regularization of this provisional registration, assessee applied in Form 10AB whereby ld. CIT(E) rejected the said application for renewal of the registration. Similar course of action was undertaken by the assessee for complying with the requirements in respect of registration u/s 80G.

5.

According to the ld. Counsel of the assessee, the rejection done by Ld. CIT(E) is on two grounds, viz., (i) Trust Deed does not contain explicit clause in respect of trust being "irrevocable" and does not provide for the manner of its dissolution; (ii reply furnished by the assessee in point no.6 of Form 10AB in response to the question "Whether the Trust Deed contains clause that the trust is irrevocable?" is false or incorrect information constituting specified violation under clause (g) of Explanation to section 12AB(4).

5.1.

In respect of the first ground, ld. Counsel for the assessee submitted that assessee has been initially granted the registration in the erstwhile regime despite there being no such explicit clause in the Trust Deed as contemplated by ld. CIT(E). There is no change in facts or law to warrant the interpretation so adopted by the ld. CIT(E) when the grant of registration is required u/s 12AB, conditions in which are pari materia to section 12AA/12A. He further asserted that provisions of section 12AA and section 12AB do not require explicit clause on irrevocability" as a condition precedent for granting of registration.

Reference made by ld. CIT(E) to sections 60 to 63 are not for the purpose of registration but are applicable only at the time of considering grant of exemption u/s 11 of the Act. According to the Id. Counsel, a trust is irrevocable unless the Trust Deed expressly provides for power of revocation. According to him, absence of irrevocability clause implies irrevocability and not revocability. Interpretation by ld. CIT(E) presuming that assessee trust is revocable in absence of explicit irrevocable clause is misplaced

5.2.

Ld. Counsel pointed out that assessee trust is registered with the Charity Commissioner, Mumbai with the Registration No. E - 11304 (Mumbai) and is covered by the provisions of Maharashtra Public Trust Act, 1950 (MPTA) which provides for adequate safeguard viz-a-viz the apprehension and presumption which led to rejection of application for registration u/s 12AB. According to him, u/s 55 of the MPTA, if the original objects of the trust cannot be fulfilled for any reason, the Charity Commissioner may direct the property or income of the trust or any portion thereof to be applied by invoking the doctrine of cypres to any other charitable objects but the trust cannot be revoked or dissolved. He emphasized that under the Public Trust law, once property is dedicated to a public charitable purpose, the dedication is completed and settlor is divested of the property. The assets so settled in favour of public trust can never revert back to the settlor. Reference was also made to provisions of section 22(3A) and (3B) of the MPTA, according to which, for a trust to be a revocable trust, power to revoke the same is essential which must be explicitly expressed in the Trust Deed so as to enable the settlor to invoke the same and revoke the trust. In other words, in the absence of any revocability clause, a trust cannot be revoked. Hence, the interpretation adopted by ld. CIT(E) for explicit requirements of "irrevocability clause" is misplaced.

5.3.

He strongly relied on the decision of Hon'ble Jurisdictional High Court of Bombay in the case of CIT (E) Us. Tara Educational and Charitable Trust in Income Tax Appeal No.247 of 2015, judgment dated 31.07.2017 wherein Hon'ble Court had held absence of dissolution clause in the Trust Deed is not a valid ground for rejecting registration u/s 12AA since, there is no such requirement under the said section of the Act and even otherwise, provisions of section 55 of the MPTA takes care of such a requirement. He pointed out that substantive conditions for registration u/s 12AB are pari materia to the requirements in section 12AA and, therefore, squarely covers the case of the assessee. Conditions for grant of registration have note materially changed u/s 12AB of the Act.

5.4.

He also referred to the decision of Co-ordinate Bench in the case of Radisson India Charitable Foundation us. ITO (Exemption) (2025) 171 taxmann.com 845 (Del), wherein on a similar issue, it was held that absence of dissolution clause and not mentioning of fate of net asset in Trust Deed cannot be a ground to deny registration u/s 12AB. In this decision, reference was also made to provisions of section 115TD which was inserted by Finance Act, 2016 with effect from 01.06.2016, according to which relevance of having dissolution clause and the apprehension on the transfer of net asset to any other entity has been taken care of.

5.5.

Ld. Counsel thus, reiterated on the first ground taken by the ld. CIT(E) for rejecting the application that no such demands were made when the initial registration of the trust was granted or when there was renewal of the registration provisionally, more particularly when there has been no change in the Trust Deed since then.

5.6.

On the second ground which formed the basis for the rejection of the application of the assessee as to furnishing of false information falling within the specified violation in terms of clause (g) in Explanation to section 12AB(4), Id. Counsel for the assessee placed on record screenshot taken from the e-portal of the Income-tax Department to demonstrate that assessee trust while filing the application was compelled to answer "Yes" for uploading its Form 10AB. If this question was answered in the negative then, the system does not allow the form to be filed at all. From the screenshot furnished by the ld. Counsel, it was pointed out that when "No" was ticked, an error was displayed on the screen with the comment "Approval/ registration is not allowed if the applicant being a trust does not have an irrevocable clause". According to him, assessee is forced to write "Yes" to this question while uploading the form despite there being no specific requirement in the statute to have a clause on irrevocability, as already contended. According to him, Trust Deed of the assessee does not have revocability clause and, therefore, it always had a bona fide belief that the assessee trust was always irrevocable and, therefore, with this belief, the answer "Yes" given by the assessee to the question on the utility is correct and cannot be considered to be false or incorrect information as inferred by the ld. CIT(E) while rejecting the application. Such a procedural constraint imposed on the assessee by way of digital utility cannot be held against the assessee. Ld. Counsel thus strongly asserted that the order of ld. CIT(E) be set aside and direction be given for grant of registration u/s 12AB as well as u/s 80G which is consequent to grant of registration u/s 12AB.

6.

Per contra, ld. CIT DR placed reliance on the order of ld. CIT(E) and asserted that provisions of section 12AB empowers the CIT(E) to examine the issue of revocability. According to him, irrevocability requirement is a condition precedent for grant of registration and exemption.

7.

We have heard both the parties and perused the material on record. We have given our thoughtful consideration to the submissions made before us as well as judicial precedents relied upon. In the course of the hearing, it was brought to the knowledge of the Bench that this issue has been taken up before the Hon'ble Jurisdictional High Court of Bombay by large number of public charitable trusts in writ petition vide Writ Petition (L) No. 7587 of 2026 in the case of The Chamber of Tax Consultants and Others us. CIT(E), contesting on the very same issue. The judgment is awaited to be available in public domain as hearings have already been concluded. Ld. Counsel pointed out that all the contentions raised before us have been put forth before the Hon'ble Court in the writ petition supra. The hearing before us concluded on 17.03.2026 and the order of the Hon'ble Court in the aforesaid writ petition was uploaded on the website on 18.03.2026.

7.1.

We perused the judgment of the Hon'ble Court in the aforesaid Writ Petition and find that the issue before us is identical to what has been contested in the judgment by the Hon'ble Court. All the aspects as contended by the ld. Counsel before us have been elaborately considered and dealt with by the Hon'ble Court including its own judgment in the case of Tara Educational and Charitable Trust (supra.) as well as provisions of the Act and of the MPTA. Hon'ble Court has also dealt with procedural aspect of uploading the form on the e-portal of the Income-tax Department whereby assessee is required to submit its answer on the question of "Whether the Trust Deed contains clause that the trust is irrevocable?" in either "Yes" or "No". Hon'ble Court, after detailed discussion analysed and summarized its judgment in para 45-46 to held that a public charitable trust is deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation. According to the Hon'ble Court, action of ld. CIT(E) is contrary to the plain language of the statute, binding judicial precedent of this very Court and is manifestly arbitrary. in para 46, by allowing the writ petition, it passed the order giving certain directions whereby Revenue is refrained from rejecting the applications for registration/renewal u/s 12AB on the ground of absence of an explicit irrevocability/dissolution clause in the Trust Deed. Hon'ble Court also directed that Revenue shall not treat the answer "Yes" to row no. 6 of the Form 10AB as furnishing false or incorrect information which shall not be a ground to reject the application for registration u/s 12AB. It is also directed for the consequential order passed denying registration u/s 80G which are to be set aside and the registration be granted u/s 8OG which is consequential to granting of registration u/s 12AB. In sub-para (vi), Hon'ble Court made specific mention that all such orders where renewal of registration u/s 12AB has been rejected on the grounds discussed in the said judgment are quashed and set aside.

7.2.

Relevant para 45 and 46 of the judgment by the Hon'ble Court (supra) are reproduced for ready reference:

"45.

In summary, we hold that a public charitable trust is deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation. The absence of an explicit irrevocability clause is not a ground for rejecting an application for registration or renewal under section 12AB of the Act. Even if the Deed provides for any revocability clause, due to operation of sections 22(3A) and 22(3B) of the MPT Act, such trusts which are registered under the MPT Act, would be irrevocable insofar as the Income-tax Act is concerned but we leave this issue open to be decided in an appropriate case. The action of Respondent No. 1 is therefore, contrary to the plain language of the statute, binding judicial precedents of this Court, and is manifestly arbitrary. Such action, as rightly pointed out by the Petitioners, have shaken the entire ecosystem of functioning of the charitable trusts. It cannot be forgotten that the trusts are contributing to nation building by doing charitable activities and that too voluntarily and, thus, must be treated with a fair and reasonable approach by the revenue.

46.

In the result, the Writ Petition is allowed. Due to the peculiar facts, as presented by the Petitioners, we pass the following order:

(i)

The Respondents shall refrain from rejecting applications for registration/ renewal under section 12AB solely on the ground of the absence of an explicit irrevocability and/or dissolution clause in the Trust Deed/ instrument.

(ii)

The Respondents shall not treat the answer "Yes" to Row 6 of Form 10AB, in the absence of any explicit clause of irrevocability, as furnishing "false or incorrect information" constituting a "specified violation".

Further, this shall not be a ground to reject an application for registration under section 12AB of the Act.

(iii)

The Respondents shall also amend the utility of Form 10A/ 10AB to allow applicants to correctly state their position regarding the irrevocability clause without being forced to make an incorrect declaration. This should be done as soon as possible.

(iv)

Question number 6 in Form 10AB should be modified to read thus, "Is the trust/ institution revocable?".

(v)

The impugned orders passed in the case of Petitioner Nos. 3 to 8 rejecting registration under section 12AB of the Income-tax Act, are hereby quashed and set aside.

(vi)

All such orders where renewal of registration under Section 12AB has been rejected on the grounds discussed above, are also hereby quashed and set aside.

(vii)

Further, it is also directed that all consequential orders passed denying registration under section 80G of the Act, where such rejection is on the ground that once registration under section 12AB is denied, registration under section 80G also cannot be granted, are also hereby quashed and set aside. This would, of course, apply only to a case where registration under section 12AB has been rejected on the grounds discussed above. The above order that we pass is to avoid any multiplicity of litigation so as to not require the trusts to challenge the orders passed by Respondent No. 1 denying registration under section 12AB and 80G of the Act on the grounds as discussed in this order.

(viii)

Respondent No.1 shall decide the applications of the Petitioners and all other similarly situated trusts, whose orders are hereby quashed, afresh and in accordance with the law and the ratio laid down in this judgment, within a period of six weeks from today. Any order so passed shall be deemed to come into effect from 1st April, 2026."

8.

In the conspectus of the above detailed discussion by taking into account the fact of the case, provisions of the Act, provisions of the MPTA and the binding judicial precedents of the jurisdictional High Court of Bombay referred above as well as other judicial precedents, the issue before us is manifestly covered in favour of the assessee.

10.

Accordingly, action of ld. CIT(E) rejecting the application for grant of registration u/s 12AB and u/s 80G (5) is set aside and the orders so passed are quashed. Grounds raised by the assessee are allowed with the direction to ld. CIT(E) to grant registration u/s 12AB and u/s 80G of the Act.”

“2.

The only issue in the present appeal is regarding the rejection of assessee’s application u/s 12A for want of dissolution clause in the trust deed. The ld. Counsel for the assessee submitted that even though the impugned rejection was unwarranted qua the reason attributed, nonetheless, the assessee has now amended the trust deed with the requisite dissolution clause. A copy of the same has been given. The ld. Counsel for the assessee also drew our attention to a catena of cases of this tribunal as well as of Hon’ble Bombay High Court in the case of Chamber of Tax Consultants as at 184 taxmann.com 374. It was accordingly requested that another opportunity be provided to the assessee to defend its case before the ld. CIT(E).

3.

The ld. DR placed reliance upon the orders of the lower authorities.

4.

We have noted that on identical facts, this Tribunal has in the case of Lachhmandas Aggarwal Radha Govind Mandir Trust ITA No. 287/DEL/2026 Dated 05.06.2026 has held as under:-

“2.

The only issue arising in the appeal of the assessee trust, through its grounds of appeal, is regarding the denial of registration u/s 12A by the ld. CIT(Exemption). The ld. Counsel has informed us that the denial was resting upon the view that there was no dissolution clause mentioned in the trust deed and that the same was therefore fatal to the grant of registration. The ld. Counsel informed that necessary amendments have been done in the trust deed and that the registration now deserves to be granted. In support of its conclusions, the ld. Counsel placed full reliance upon the decision of a co-ordinate Bench of this Tribunal in the case of Radisson India Charitable Foundation in IT Appeal Nos. 3976 and 3978 (Delhi) of 2024 Assessment Year 2022-23 vide their order dated 22.01.2025. It was submitted that the decision squarely covers the facts of the assessee’s case.

3.

The ld. DR relied upon order of lower authorities while supporting the decision of Chandigarh Tribunal in ITA No.1257/Chd/2017.

4.

We have heard rival submissions in the light of material available on record. We have noted that in the case of Radisson India Charitable Foundation, it has been held:-‘6 . We have heard both the parties and perused the material available on record. The Ld. CIT(E) rejected the application for registration filed by the Assessee on two Grounds (1) The activities carried out by the trust are restricted to its own employees, ex-employees and their family members, which shows that it is not a public charitable trust. (2)There is no dissolution clause in the trust deed, the net asset of the trust in case of dissolution can be transferred to any other entity.

7.

For the purpose of adjudicating above controversy, the objects of the trust deed are to be verified. The Clause 4 of the trust deed deals with the object of the trust which reads as under:

"4.

The principal objective of Radisson India Charitable Foundation a. The Principal objective of Radisson India Charitable Foundation shall be Follows:

b. promoting education directly or indirectly, including special education and employment enhancing vocation skills, promoting education directly or indirectly, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled;

c. promoting livelihood enhancement projects, d. eradicating hunger, poverty, and malnutrition including by providing financial assistance by way of school fee, scholarships to needy children and providing financial help in obtaining healthcare facilities and medical facilities;

e. promoting health care including preventive health care and sanitation;

f. promoting availability of safe drinking water:

g. training to promote rural sports, nationally recognized sports, Paralympics sports and Olympic sports;

h. o do all other acts and things as are conducive or helpful in the advancement and fulfilment of the principal and other objects above mentioned;

i.

to issue appeals and applications for money and funds in furtherance of the said objects and to accept gifts/grants/funds/subscription of cash and securities/immovable and moveable property, j. for such other charitable purposes or purpose of public utility as the Trustees may think fit;

k. All the activities of the Trust shall be as far as possible, carried out on NO PROFIT, NO LOSS basis and earning of any income or surplus is not the objective of the Trust. Any surplus arising from any activity shall be utilized only for charitable purpose as enshrined in these objectives."

8.

It is the case of the Assessee that the objects of the trust to provide education and medical facilities for public at large and the Assessee has provided details of expenses incurred for providing medical facilities for last three years and all the expenses have been incurred for supporting the family members of the employees of Radisson Group who tragically passed away during Covid-19 Pandemic. The main objection of the Department is that, the activities carried out by the trust are restricted to its own employees, ex-employees and their family members, thus the Assessee trust is not a public charitable trust.

9.

The Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association v. CIT [1971] 82 ITR 704 held as under:-"It is well settled by now and the High Court also has rightly taken that view that an object beneficial to a section of the public is an object of general public utility. To serve a charitable purpose it is not necessary that the object should be to benefit the whole of mankind or all persons in a particular country or State. It is sufficient if the intention to benefit a section of the public as distinguished from a specified individual is present. This Court in Commissioner of Income tax, Madras v. Andhra Chamber of Commerce (1) overruled the view of Beaumont C.J. in Commissioner of Income tax v. Grain Merchants' Association of Bombay(2) on the point. It was, however, observed that the section of the community sought to be benefitted must be sufficiently defined and identifiable by some common quality of a public or impersonal nature. Where there was no common quality uniting the potential beneficiaries into a class the trust might not be regarded as valid. In the various orders the clause relating to the beneficiaries has not been clearly and accurately set out. In the petition of appeal dated October 7, 1968 the provisions of the constitution of the assessee are set out and with reference to The community it is stated, "Rana community means natives of Ahmedabad only and the other community brothers accepted by the community as per old rules of the community staying in Ahmedabad". It is common ground that the word " old rules" do not represent the correct translation of the original word in Gujarati which is Riwaj meaning custom. The learned judges of the High Court also, who are conversant with that language, have proceeded on the basis that the correct rendering of the aforesaid word is custom or usage. That is why according to the High Court the definition comprises two classes of members of Rana caste residing in Ahmedabad, one class consisting of those who are natives of Ahmedabad while the other class consists of such persons who are admitted by the Rana caste according to the old custom or usage of the community. The reason which prevailed with the High Court for treating the second class as not being united with the first class by a common characteristic or attribute was that its members have to be accepted by the community according to the old custom or usage and that the entry of the members of this class into the Rana caste residing in Ahmedabad was dependent on the decision of the caste to (1) 55 I.T.R. 722. (2) 6 I.T.R. 427.

Admit them. We are altogether unable to concur in the approach or the conclusion of the High Court on the above point.

We may usefully refer to the judgment of Lord Greene M.R. in re Compton, Powell v. Compton & Others(1). The Master of Rolls declared that no definition of what was meant by "a section of the public" had, so far as he was aware, been laid down. But he indicated that the trust of a public character is one in which the beneficiaries do not enjoy the benefit when they receive it by virtue of their character as individuals but by virtue of their membership of a specified class the common quality, uniting potential beneficiaries into the class being essentially an impersonal one. This common quality he said was "definable by reference to what each has in common with the others and that is something into which their status as individuals does not enter". Andrew, L.C.J. accepted this statement of law without hesitation in Trustees of the Londonderry Presbyterian Church House v. Commissioners of Inland Revenue(2). What has to be seen in the present case is whether the members of the Rana caste who are not natives of Ahmedabad but who come to reside there and are accepted as members of that caste according to its usage and customs can be said to have a relationship which is an impersonal one dependent on their condition as members of the Rana community. We are unable to comprehend how such members of the Rana caste can be regarded as having been introduced into that caste by consideration of their personal status as individuals. As a matter of fact the predominant content and requirement of the clause defining "beneficiaries" in the constitution of the assessee is the factum of their belonging to the Rana community of Ahmedabad. The common quality, therefore, uniting the potential beneficiaries into the class consists of being members of the Rana caste or community of Ahmedabad whether as natives or as being admitted to that caste or community under custom or usage. The mere fact that a person of the Rana community who is not an original native of Ahmedabad has to prove his credentials according to the custom and usage of that community to get admitted into that community cannot introduce a personal element. In Oppenheim v. Tobacco Securities Trust Co. Ltd. & Others(1) the trustees were directed to apply certain income in providing for the education of children of employees or "former employees" of a British limited company or any of its subsidiary or allied companies. It was held by the House of Lords by a majority that though the group of persons indicated was numerous, the nexus between them was employment by particular employers and accordingly the trust did not satisfy the test of public (1) [1945] Ch. 123.

(3)

[1951] A.C. 297.

(2)

27 T.C. 431.

75O benefit requisite to establish it as charitable. This is what Lord Simonds observed -"A group of persons relationship which takes a group nexus between them is their personal relationship to a single propositus or to several propositi, they are neither the community nor a section of the community for charitable purposes".

The personal element of personal relationship which takes a group out of section of the community for charitable purposes is of the nature which is to be found in cases of the aforesaid type. We cannot possibly discover a similar element of personal nature in the members of the Rana community who settle in Ahmedabad and have been accepted by the Rana community of that place as members of that community. As regards the acceptance of such persons as members of the community or caste, according to custom and usage, it is well known that whenever a question arises whether a person belongs to a particular community or caste the custom or usage prevailing in that community must play a decisive and vital part. That cannot be regarded as an element which would detract from the impersonal nature of the common quality.

For the reasons given above the appeals are allowed and the answer returned by the High Court is discharged. The matters are remitted to the High Court for returning the answer to the question referred after determining the,- other points which were left undecided. The parties shall bear their own costs in these appeals. Appeals by certificate (i.e. C.As. 2146-2148 of 1968) are dismissed, the certificate being defective for want of reasons.

In the case of Hiralal Bhagwati (supra), the trust was created for the benefit of employees of the 16 institutions with the object of providing aid in case of sickness and disablement. The Hon'ble High Court following the decision of Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra) held that an object beneficial to a section of the public is an object of general public utility."

10.

In the present case, admittedly the trust deed of the Assessee contains the object of carrying out charitable activities to general public. The Assessee has also incurred expenses for providing the education and health care facilities to the children and the family members of Radisson Group Employees who expired due to Covid-19 pandemic. In our opinion, the family members of the deceased employees are part of 'public' and there is no relationship of employee and employer between the Appellant and the family members of deceased employees. Even otherwise, the ratio laid down by the Hon'ble Supreme Court in the case of Ahmedabad Rana Caste Association (supra) and Hiralal Bhagwati v. CIT [2000] 246 ITR 188 (Gujarat) are applicable to the case in hand. Thus, in our opinion, the Ld. CIT(E) committed error in holding that 'the activities of the appellant are restricted only to family members of the exemployees, thus, the Assessee is not a 'public charitable Trust'.

11.

Another reason for rejecting the registration is that there is no dissolution clause in the trust deed of the Assessee. We have gone through the trust deed, wherein in the Clause of 'power of trustees', it is mentioned as under: -

"1.

The Trustees shall have the following powers:

(a)

To start, abolish, discontinue, and restart any charity/charitable organization or institution for the benefit of the general public and impose conditions to its subscription or donations made therein.

(h)

To transfer and hand over the Trust to any other trust/society/association/institution on such terms and conditions as the Trustees shall in their absolute discretion think fit and proper."

12.

From the plain reading of the above Clauses, though the trustees have power to transfer and hand over the trust to any other trust/society/Association/Institution, is no mentioning regarding the dissolution of the trust and the fate of net asset of the trust in case of dissolution. It is true that the net asset of the trust can be transferred to any entity since, as per the above Clause in the trust deed, the trustees have absolute right to transfer and hand over the Trust to any other trust/society/association/institution on such terms and conditions as the Trustees shall in their absolute discretion think fit and proper. However, after the amendment to provision of Section 115TD of the Act, which has been inserted by Finance Act, 2016 w.e.f. 01/06/2016, the relevance of having dissolution clause and the apprehension on the transfer of net asset to any other entity has been taken care by the said provisions of Section 115TD of the Act. Thus, in our considered opinion, the absence of dissolution clause and nonmentioning of fate of net asset in the trust deed cannot be a ground to deny the registration u/s 12AB of the Act. Thus, the Ld. CIT(E) committed error in rejecting the registration u/s 12A and 80G of the Act.

13.

In view of the above discussion, we find merit in the Grounds of appeal of the Assessee, accordingly, we allow the Grounds of appeal of the Assessee and set aside the impugned orders of the Ld. CIT(E) dated 02/07/2024 and direct the Ld. CIT(E) grant registration u/s 12AB of the Act, consequently, also grant Registration u/s 80G of the Act.

14.

In the result, Appeals of the Assessee in ITA No. 3976/Del/2024 and 3978/Del/2024 are allowed….’

5.

We have noted that the facts of the present case are identical to those adjudicated in the case of Radisson India Charitable Foundation(supra) and no distinguishment could be pointed out by the respondent revenue. Accordingly, in respectful compliance to the said decision and for the purposes of consistency, we set aside the impugned order of the Ld. CIT(E) dated 17.11.2025 and direct the Ld. CIT(E) grant registration u/s 12AB of the Act.

6.

In the result, the appeal of the assessee is allowed.

5.

We have further noted that the Hon’ble Bombay High Court in the case of Chamber of Tax Consultant (supra) held that non-availability of dissolution clause in the trust deed cannot be a ground for rejection of application for registration. Accordingly, in respectful compliance to the orders of Hon’ble Bombay High Court and this tribunal hereinabove, we set-aside the order of ld. CITE(E) and direct him to readjudicate the matter de novo after giving fair opportunity of being heard and in accordance with law. The assessee shall be entitled to place on record all or any other evidence deemed necessary to defend its case. The assessee shall comply to all the notices of the Revenue. The appeal of the assessee is allowed for statistical purposes.

6.

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