SHREE ZAVERI MITRA MANDAL,MUMBAI vs. CIT (EXEMPTIONS), MUMBAI

आदेश / O R D E R PER BENCH: The aforesaid appeals, being ITA No. 4141/Mum/2026 and ITA No.4142/Mum/2026 have been filed by the assessee trust against the order dated 17.02.2026 passed by the learned CIT (Exemption), whereby the application filed by the assessee seeking renewal of registration under section 12AB

2 ITA No.4141 & 4142/Mum/2026 Shree Zaveri Mitra Mandal and approval under section 80G of the Act came to be rejected.

The above appeal is fixed for a hearing on 25 June 2026.

The above appeal was filed us against the order passed by the Commissioner of Income-tax (Exemptions), Mumbai, rejecting our application for renewal of approval under S. 80G of the Income-tax Act, 1961 on the ground that our application for continuation of registration u/s 12AB of the Act was rejected by him vide order dated 17.02.2026 on the ground of non- inclusion of irrevocability or dissolution clause in Trust Deed/MoA and specified violation as per Explanation (g) to the Section 12AB(4) of the Income tax Act, 1961

On those issues, Hon'ble Bombay High Court passed an order on 09 March 2026 in the case of The Chamber of Tax Consultants, Mumbai and Others v. The Commissioner of Income Tax (Exemptions) and Others, holding and directing as under "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

3 ITA No.4141 & 4142/Mum/2026 Shree Zaveri Mitra Mandal 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 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. 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. 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. Question number 6 in Form 10AB should be modified to read thus, "Is the trust/institution revocable?" 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. All such orders where renewal of registration under Section 12AB has been rejected on the grounds discussed above, are also hereby

4 ITA No.4141 & 4142/Mum/2026 Shree Zaveri Mitra Mandal quashed and set aside. 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 passed shall be deemed to come into effect from 1st April, 2026." [Emphasis supplied by us] In view of the said decision of Hon. Jurisdictional High Court, the Commissioner of Income-tax (Exemptions), Mumbai passed order dated 04 April 2026 [DIN & Notice No: ITBA/EXM/F/EXM53/2026 27/1088281963(1)) granting continuation of registration to us under S, 12AB of the Act for 10 years from 2027-28 to 2036-37 and, vide order dated 04 April 2026 [DIN & Notice No: ITBA/EXM/F/EXM53/2026- 27/1088281964(1)] granted continuation of approval under S 80G(5) the Act also. Copies of these orders, passed by the Commissioner of Income-tax (Exemptions), Mumbai, are attached herewith for your ready reference and record. Since the matter is already resolved in our favour, we request to: (a) take due note of the same, (b) allow us to withdraw this appeal and (c) hold that of the matter in appeal is resolved in our favour and that our appeal is accordingly deemed as allowed.” 3. Ld. DR has not raised any objection.

5 ITA No.4141 & 4142/Mum/2026 Shree Zaveri Mitra Mandal 4. We have heard both the parties and perused the records, especially the Application of assessee for withdrawal of the Appeals. We find considerable cogency in the contentions of Assessee as aforesaid. Keeping in view of the facts and circumstances of the case, we accept the request of the assessee for withdrawal of the Appeals and accordingly, we dismiss the Appeals as withdrawn.

Order pronounced on 25th June, 2026.

Sd/- Sd/- (GIRISH AGRAWAL) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 25/06/2026 KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER,

(Asstt. Registrar) ITAT, Mumbai