PARMATMA DEVI TRUST,DELHI vs. EXEMPTIONS WARD 2(4), DELHI, DELHI

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ITA 5482/DEL/2026Status: DisposedITAT Delhi23 June 2026AY 2027-283 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the absence of an explicit irrevocability clause cannot be the sole ground for rejecting registration, following the Bombay High Court's decision. The CIT(Exemption) must also examine other aspects like the genuineness of activities and charitable objects.

What were the facts?

The assessee trust's application for registration under Section 12A was rejected by the CIT(Exemption) due to the absence of an explicit irrevocability clause in the trust deed. The trust deed also lacked clarity on asset transfer upon dissolution.

What were the issues?

Whether the absence of an explicit irrevocability clause in the trust deed is a valid ground for rejecting registration under Section 12A. Whether the CIT(Exemption) must consider other aspects of the trust's activities and objects.

Which sections of the Income-tax Act were involved?

Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Before: Sh. S. Rifaur Rahman & Sh. Raj Kumar Chauhan

Hearing: 23.06.2026Pronounced: 23.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI Before Sh. S. Rifaur Rahman, Accountant Member & Sh. Raj Kumar Chauhan, Judicial Member ITA No. 5482/Del/2026 :Asstt. Year: 2027-28 Parmatma Devi Trust, Vs Income Tax Officer, C-487, Defence Colony, South Delhi, Circle Exemption-2(4), New Delhi-110024 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AAATP1242R Assessee by: Sh. Hrithik Singla, CA Revenue by: Sh. Vikram Singh Sharma, CIT-DR Date of Hearing: 23.06.2026 Date of Pronouncement: 23.06.2026 ORDER 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 Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) was rejected.

2.

At the outset, the learned Counsel for the assessee stated that the assessee’s application in Form No.10AB seeking registration under Section 12A was rejected by the learned CIT(Exemption) for the reason that in the trust deed, there is no provision that the trust is revocable or irrevocable and how the assets of the trust are to be transferred in case of dissolution of the trust. The learned Counsel stated that

2 ITA No. 5482/Del/2026 Parmatma Devi Trust Hon'ble Bombay High Court in the case of The Chamber of Tax Consultants Vs. CIT(Exemption) & Ors. in Writ Petition (L) No.7587 of 2026, judgement dated 9th March, 2026, has held that a public charitable trust is deemed irrevocable by operation of law unless the trust deed expressly provides otherwise, and that absence of an explicit irrevocability clause cannot be ground for rejection of registration or renewal under Section 12AB. It was further directed by the Hon’ble High Court that applications for registration under Section 12AB shall not be rejected solely on the ground of absence of an irrevocability clause and that answering “Yes” in Form 10AB in such circumstances cannot be treated as furnishing false or incorrect information.

3.

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

4.

After going through the arguments of both the sides as well as the case law of Hon'ble Bombay High Court cited by the learned Counsel for the assessee in the case of The Chamber of Tax Consultants (supra) and also the order of learned CIT(Exemption), we noted that apart from irrevocability clause, learned CIT(Exemption) has not examined and has not carried out necessary verification in support of the genuineness of the activities, charitable objects and commencement of its

3 ITA No. 5482/Del/2026 Parmatma Devi Trust activities. Hence, we set aside the order of learned CIT(Exemption) 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, charitable objects and commencement of the activities, etc. In terms of the above, the order of learned CIT(Exemption) is set aside and the matter is restored back to the file of learned CIT(Exemption) for deciding the same de-novo after providing sufficient opportunity of being heard to the assessee.

5.

In the result, the appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on 23/06/2026. Sd/- Sd/- (S. Rifaur Rahman) (Raj Kumar Chauhan) Accountant Member Judicial Member Dated: 23/06/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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