CHANDRAPRABHU SWETAMBER MURTIPUJAK JAIN SANGH LOKHANDWALA COMPLEX,MUMBAI vs. CIT ( EXEMPTIONS), CUMBALLA HILL, MTNL OFFICE

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ITA 1888/MUM/2026Status: DisposedITAT Mumbai20 May 2026AY 2027-285 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rejection of the application solely on the ground of absence of explicit irrevocability and dissolution clauses is contrary to the law laid down by the Bombay High Court. The matter was restored to the CIT(E) for re-adjudication.

What were the facts?

The assessee's application for renewal of registration under Section 12AB was rejected by the CIT(E) solely for the absence of irrevocable and dissolution clauses in the trust deed. The assessee had initiated steps to amend the trust deed to include these clauses.

What were the issues?

Whether the absence of explicit irrevocable and dissolution clauses in the trust deed is a valid ground for rejecting an application for renewal of registration under Section 12AB. The applicability of the Bombay High Court's decision in Chamber of Tax Consultants & Anr. vs CIT(E).

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12A(1)(ac)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI ANIKESH BANERJEE & SHRI MAKARAND VASANT MAHADEOKARShri R.A. Dhyani (CIT DR)

For Respondent: Shri R.A. Dhyani (CIT DR)
Hearing: 13/05/2026Pronounced: 20/05/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No.1888/Mum/2026 (Assessment year: 2027-28)

Chandraprabhu Swetamber vs CIT (Exemption), Mumbai Murtipujak Jain Sangh Room No.601, 6th floor, Cumballa Lokhandwala Complex Hill, MTNL Office, Pedder Road, B-603, Seashell Building, 3rd Mumbai-400026 Cross Lane, Lokhandwala Complex Mumbai-400058 PAN: AABTC0091N APPELLANT RESPONDENT Assessee by : None Revenue by : Shri R.A. Dhyani (CIT DR)

Date of hearing : 13/05/2026 Date of pronouncement : 20/05/2026 O R D E R Per:Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the Ld. Commissioner of Income Tax-(Exemption), Mumbai [for brevity the “Ld. CIT(E)”], order passed under section 12AB of the Act (for brevity ‘the Act’) for Assessment Year 2027-28, date of order 27/12/2025.

2 ITA No.1888/Mum/2026 Chandraprabhu Swetamber Murtipujak Jain Sangh Lokhandwala Complex 2. The assessee has taken the following grounds: “GROUNDS OF APPEAL 1. The impugned rejection order dated 27/12/2025 rejecting the assessee's application for renewal of registration under Section 12A(1)(ac) (ii) of the Income Tax Act. 1961 filed on 20.06.2025 for assessment year 2027-2028, is erroneous, arbitrary and contrary to law, in as much as it solely hinges on the non-inclusion of a irrevocable & dissolution clauses in the trust deed, overlooking the assessee's bonafide efforts to rectify the same. 2. The assessee trust is a genuine religious institution duly registered under Bombay Public Trusts Act, 1950, engaged in religious activity, and has been compliant with all statutory obligations. 3. The assessee has approached the Charity Commissioner seeking amendment to the trust deed to incorporate the requisite irrevocable & dissolution clauses as per Section 12A(1)(ac)(ii). The amendment process, being statutory is underway but is likely to extend beyond 31.03.2026 due to procedural timelines under the relevant Trusts Act.”

3.

when the appeal was called for none was present on behalf of the assessee. No adjournment petition was filed for adjournment. On verification of the fact we find that the assessee’s case was duly covered by the order of Hon'ble Bombay High Court. So, considering this fact we proceed to dispose the appeal on exparte qua for assessee after hearing the Ld. DR.

4.

We heard the submission of the Ld. DR and perused the documents available in the record. The assessee is a religious trust under Bombay Public Trust Act, 1950 and engaged in religious activity. The registration was duly cancelled due to non-inclusion of irrevocable and dissolution clause as per section 12A (1)(ac)(ii) of the Act. From the grounds of appeal, he found that the assessee is under process to amend the clause for incorporating the requisite irrevocable

3 ITA No.1888/Mum/2026 Chandraprabhu Swetamber Murtipujak Jain Sangh Lokhandwala Complex clause and accordingly, which is approached any contrary findings against the submission of the assessee.

5.

It is an undisputed position that the issue related to non-inclusion of irrevocability or dissolution clause in the trust deed is duly considered and directed by the Hon'ble Bombay High Court in the case of Chamber of Tax Consultants & Anr. vs CIT(E) Writ Petition (L) No.7587 of 2026 date of order 09.03.2026. The relevant observations of the lordship in para no.45 and 46 are reproduced as below: “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.

4 ITA No.1888/Mum/2026 Chandraprabhu Swetamber Murtipujak Jain Sangh Lokhandwala Complex (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.”

In view of the aforesaid binding judicial precedent, from foundation of the observations of Ld. CIT(E) stands nullified. Accordingly, we restore the matter to the file of Ld. CIT(E) and considered to re-adjudicate the issue by following the direction of Hon'ble Bombay High Court. Consequently, the ground raised by the assessee we restore to the file of Ld. CIT(E) with direction above. Further, it is directed to Ld. CIT(E) to pass a speaking order after respectfully following the binding order of the Hon’ble Jurisdictional High Court.

5 ITA No.1888/Mum/2026 Chandraprabhu Swetamber Murtipujak Jain Sangh Lokhandwala Complex 6. In the result, the appeal of the assessee bearing ITA No.1888/Mum/2026 is allowed for statistical purposes. Order pronounced in the open court on 20th day of May 2026. Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 20/05/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI

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