SARDAR MANMOHAN SINGH CHARITABLE TRUST,DELHI vs. CIT (EXEMPTION), NEW DELHI

ITA 4492/DEL/2026Status: DisposedITAT Delhi25 September 2026AY 2026-2719 pages
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What did the Tribunal hold?

The Tribunal held that the rejection of the assessee's application for registration under Section 12AB and approval under Section 80G by the CIT(E) was erroneous. The Tribunal found merit in the assessee's grounds of appeal. It reasoned that the absence of an explicit irrevocability clause in the trust deed does not necessarily mean the trust is revocable; in fact, the law often presumes irrevocability in such cases. The Tribunal noted that the assessee's trust deed contained a dissolution clause (Clause 26) and that Section 115TD of the Act, introduced by the Finance Act, 2016, addresses concerns regarding the transfer of net assets upon dissolution, thereby mitigating the apprehension of assets being transferred to other entities. The Tribunal relied on judicial precedents, including the decisions of the Bombay High Court in The Chamber of Tax Consultants and Ors. v. The Commissioner of Income Tax (Exemptions) and Ors., and its own prior rulings in similar cases. Consequently, the Tribunal set aside the impugned orders of the CIT(E) and directed the CIT(E) to grant the registration under Section 12AB and approval under Section 80G to the assessee.

What were the facts?

The assessee, Sardar Manmohan Singh Charitable Trust, filed two appeals (ITA Nos. 4491 and 4492/DEL/2026) before the Income Tax Appellate Tribunal (ITAT), Delhi Bench, challenging orders dated March 19, 2026, passed by the Commissioner of Income Tax (Exemption) [CIT(E)]. These orders rejected the assessee's applications for registration under Section 12AB(1)(b)(ii) and approval under Section 80G of the Income Tax Act, 1961, for Assessment Year 2026-27. The rejection was primarily based on the absence of an explicit irrevocability clause in the Trust Deed and, for Section 80G, the perceived lack of a dissolution clause. The assessee had previously held registrations under Section 12A/12AA and Section 80G, and a registration under Section 12A(1)(ac)(i) for AY 2022-23 to AY 2026-27.

What were the issues?

1. Whether the rejection of the assessee's application for registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961, solely on the ground that the Trust Deed lacks an explicit irrevocability clause, is erroneous and unsustainable in law? Assessee's Contention: The assessee argued that the absence of an explicit irrevocability clause does not automatically render a trust revocable; rather, a trust is deemed irrevocable unless expressly made revocable. They relied on Supreme Court's decision in Shiromani Gurudwara Prabandhak Committee v. Som Nath Dass and Bombay High Court's ruling in The Chamber of Tax Consultants and Ors. v. The Commissioner of Income Tax (Exemptions) and Ors., which held that silence implies irrevocability. They also cited ITAT decisions in Amita Memorial Trust v. CIT (Exemption) and Batta Education Foundation v. CIT (Exemptions), and a specific clause in their Trust Deed (Clause 26) that they contended served as a dissolution clause, making the trust irrevocable. They further argued that Section 115TD of the Act addresses concerns regarding the transfer of net assets upon dissolution. Revenue's Contention: The revenue, through the CIT(E), rejected the application, concluding that the absence of an irrevocable clause indicated the trust was not structured to endure indefinitely and lacked unequivocal commitment to its charitable objectives. No specific authorities were named in the judgment for the revenue's arguments.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G,Section 12A(1)(ac)(ii),Section 115TD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES, ‘G’ NEW DELHI

Before: MS. KAVITHA RAJAGOPAL

Pronounced: 25.09.2026

PER AMITABH SHUKLA, AM These two appeals by the assessee are directed against the order of the Ld.

Commissioner of Income Tax(Exemption), New Delhi [hereinafter referred to as ‘ld. CIT(E)] both dated 19.03.2026 passed under section 12AB(1)(b)(ii) and 80G of the Income Tax Act, 1961, for the Assessment Year 2026-27. The word ‘Act’ herein this order would mean Income Tax Act, 1961. 2. The appeal of the assessee vide IT

The order continues below.

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