AMBEKAR CHARITABLE TRUST & RESEARCH CENTRE ,MUMBAI vs. CIT (EXEMPTIONS) MUMBAI, MUMBAI

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ITA 2394/MUM/2026Status: DisposedITAT Mumbai02 June 2026AY 2027-2810 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 absence of an explicit irrevocability clause is not a ground for rejection, as a public charitable trust is deemed irrevocable by operation of law. The dissolution aspect is adequately covered by the Maharashtra Public Trust Act. Therefore, the rejection by the CIT(E) was set aside.

What were the facts?

The assessee, a charitable trust, applied for registration under sections 12AB and 80G. The CIT(E) rejected the application citing the absence of explicit irrevocability and dissolution clauses in the trust deed.

What were the issues?

Whether the absence of an explicit irrevocability and dissolution clause in the trust deed is a valid ground for rejecting an application for registration under Section 12AB and 80G of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G,Section 12A(1)(ac)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE SHRI PAWAN SINGH & HON’BLE SHRI GIRISH AGRAWAL

For Respondent: Shri Surendra Mohan, DR
Pronounced: 02.06.2026

Heard together (2 matters)

ITA 2394/MUM/2026
ITA 2459/MUM/2026

Read from the judgment's own cause title. This page is filed under one of them.

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: A BEFORE HON’BLE SHRI PAWAN SINGH, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 2394/MUM/2026 िनधा�रणवष�/Assmt. Year: 2027-28)

ITA 2459/MUM/2026 िनधा�रणवष�/Assmt. Year: 2027-28) Permanent Account Number: AACTA9324K Ambekar Charitable Trust & Research Centre CIT(E) 9B/2001-2101, Whispering Mumbai. Vs. Palms Exclusive, Kandivali-E Maharashtra-400 101. (अपीलाथ� Appellant) (��थ� Respondent)

िनधा�रती�ारा/Assessee represented by: Shri Hemant, AR राज� व�ारा/Revenue represented by: Shri Surendra Mohan, DR

सुनवाईकीतारीख/Date of conclusion of hearing: 20-May-2026 घोषणाकीतारीख/Date of pronouncement: 02.06.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: Both the appeals filed by the assessee are against the rejection of their application for registration under section 12AB and section 80G of the Income Tax Act, 1961 (in short ‘Act’) in ITA No. 2394/Mum/2026 and ITA No. 2495/Mum/2026, respectively. The appeal in respect of rejection of registration under section 80G is consequential to the rejection of registration under section 12AB of the Act. Accordingly, we take up the appeal in ITA No. 2394/Mum/2026 in respect of rejection of registration under section 12AB and our observations and findings shall apply mutatis mutandis to the other appeal.

2.

Brief facts of the case are that assessee is a public charitable trust registered with Charity Commissioner vide registration certificate no. E- 27247(Mumbai), dated 23.08.2010. Assessee was registered under section 12A of the Act, which is prior to 01.04.2021 vide Certificate No. 50360 dated 15.10.2018. Assessee filed application in Form 10AB on 16.05.2025 under section 12A(1)(ac)(ii) seeking registration under section 12AB of the Act against provisional registration granted covering period from A.Y. 2022-23 to 2026-27.

3.

Ld. CIT(E) upon perusal of Form No. 10AB inquired about the existence of clause on the irrevocability of trust. In this regard, he observed that as per trust deed, there is no clause regarding irrevocability or dissolution/winding up of the applicant trust, which is mandatory as per the provisions of the Act. Accordingly, he drew an adverse conclusion by holding that the assessee has violated the provision as prescribed under Explanation (g) to section 12AB(4) of the Act, on account of absence of an explicit irrevocability and dissolution clause in the trust deed. He thus, held that application of renewal of registration in Form 10AB of the Act is not allowable on the ground of non-inclusion of clauses relating to irrevocability and dissolution in the trust deed and thus, the same was rejected.

4.

Contention of the assessee in this regard is that it has placed on record copy of trust deed made on 09.06.2010. The fact of existence of irrevocability clause in the trust deed was brought to the notice of ld. CIT(E) vide letter dated 24.11.2025. This letter is referred by the ld.

CIT(E) in the impugned rejection order in paragraph 3.4. Also, as regards the dissolution clause, through the same letter, it was brought to the knowledge of ld. CIT(E) that even though specific dissolution clause does not exist in the trust deed, yet section 22(3B) of the Maharashtra Public Trust Act, 1950 (in short ‘MPTA’) dealing with the same issue, governs the requirement in this regard. Despite bringing the required details and explanation on record, ld. CIT(E) ignored the same and rejected the renewal of registration under section 12AB of the Act. Contents of the letter dated 24.11.2025 referred in the above paragraph are extracted below for ready reference:

5.

From the perusal of contents of the above extracted letter, we note that trust deed of the assessee which was before ld. CIT(E) contained specific mention about the irrevocability clause. The Settler Dr. Aniruddh Prakash Ambekar has irrevocably transferred the sum of Rs. 1,000/- towards the objects of the assessee trust. By virtue of this irrevocable transfer, he has prohibited himself from demanding the said sum from the assessee trust. Also, in respect of dissolution clause, section 22(3B) of the MPTA delinquently secures requirement as contemplated by ld. CIT(E) under the Act, to provide safeguard to the Revenue. In view of the specific provisions of the MPTA, no part of the assets of the trust even on its dissolution shall ever devolve on the settlor or for that matter on any trustee. The assets shall rest with the Government of Maharashtra, if such a situation arises.

6.

The issue in the present appeal relating to irrevocability clause and dissolution clause in the trust deed for the purpose of granting of registration under section 12AB of the Act had come up before Hon'ble Jurisdictional High Court in Writ Petition (L) No. 7587 of 2026 in the case of Chamber of Tax Consultants and others vs. The Commissioner of Income Tax (Exemption) vide order dated 09.03.2026. The Coordinate Bench in the case of Amita Memorial Trust by relying on the aforesaid judgment of Hon'ble Jurisdictional High Court in ITA No. 1262 & 1263/Mum had given its findings of setting aside the order passed by CIT(E) who rejected the application for grant of registration under section 12AB and 80G(5) of the Act. The Coordinate Bench allowed the grounds raised by the assessee along with giving direction to the ld. CIT(E) to grant the said registrations. Relevant paragraphs from this order are extracted for ready reference :-

“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 vs. 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 80G 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 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.” 7. In the conspectus of the factual matrix narrated above, evidently demonstrated by the assessee trust about existence of irrevocable clause in the trust deed and aspect of dissolution adequately covered by the provisions of section 22(3B) of the MPTA and respectfully following the decision of Hon'ble jurisdictional High Court of Bombay in the case of The Chamber of Tax Consultants and others (supra) and placing reliance on the decision of the Coordinate Bench in the case of Amita Memorial Trust (supra), actions of ld. CIT(E) of rejecting the application for grant of registration under section 12AB and 80G(5) are set aside and orders so passed are quashed. Grounds raised by the assessee are allowed with the direction to the ld. CIT(E) to grant registration under section 12AB and under section 80G of the Act.

8.

Since rejection of registration under section 80G of the Act is consequential to the rejection of registration under section 12AB of the Act, our findings in the above paragraph applies mutatis mutandis to the captioned appeal filed in this regard.

9.

In the result, both the appeals of the assessee are allowed. Order pronounced in the open court on 02.06.2026

Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Mumbai Dated: 02.06.2026 Copy to:

Ambekar Charitable Trust & Research Centre 1 9B/2001-2101, Whispering Palms Exclusive, Kandivali-E Maharashtra-400 101.

2 CIT(A)(E), AAYAKAR BHAWAN, MUMBAI, MAHARASHTRA, 400020 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE

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