Cancellation of Section 12AB registration cannot be justified solely for lacking a formal trust deed.
Cancellation of Section 12AB registration cannot be justified solely for lacking a formal trust deed.
Issue
Whether the CIT(E) was justified in rejecting applications for registration under Section 12AB of the Income-tax Act, 1961 solely due to the non-submission of an instrument of creation or trust deed, even though the assessee institutions were created under Canon Law, registered under the Maharashtra Public Trusts Act, 1950, and no adverse finding was recorded regarding the genuineness of their activities.
Facts
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The assessee institutions applied for fresh registration/renewal under Section 12AB of the Income-tax Act, 1961 read with Rule 17A of the Income-tax Rules, 1962.
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During the registration proceedings, the CIT(E) called for structural documents under Rule 17A(2).
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The assessees explained that they were governed by Canon Law, had not been created under any separate written trust deed or Memorandum of Association (MOA), and were duly registered as public charitable trusts under the Maharashtra Public Trusts Act, 1950.
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They furnished all available supporting documents, including the initial registration applications and registration certificates issued by the Charity Commissioner.
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The CIT(E) treated the submission of a trust deed or MOA as mandatory under Section 12AB(1)(b) read with Rule 17A(2) and rejected the registration applications solely for failing to produce a document evidencing creation, without recording any adverse finding on the genuineness of their charitable activities.
Decision
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In Favor of Assessee: The statute and relevant rules explicitly recognize institutions created or established otherwise than under a written instrument; thus, registration cannot be denied merely for failure to produce a non-existent document.
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In Favor of Assessee: Documents proving registration and continued legal existence under the Maharashtra Public Trusts Act, 1950 serve as sufficient evidence and cannot be disregarded for want of a conventional trust deed.
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In Favor of Assessee: The rejection of applications under Section 12AB by the CIT(E) was unjustified and stands set aside.
Key Takeaways
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Recognition of Unwritten Instruments: Section 12AB and Rule 17A accommodate entities established without a formal written trust deed or MOA, such as religious/charitable bodies created under customary or Canon Law.
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Substance Over Form: Registration under local statutes (e.g., Maharashtra Public Trusts Act, 1950) provides valid legal proof of establishment when a conventional instrument of creation does not exist.
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Genuineness of Activities is Paramount: Rejection under Section 12AB cannot be based on procedural technicalities regarding creation documents when the genuineness of the trust’s activities is unchallenged.
IN THE ITAT MUMBAI BENCH ‘C’
Church of St. Francis Xavier
v.
Commissioner of Income-tax (Exemption)*
Smt. Beena Pillai, Judicial Member
and Jagadish, Accountant Member
and Jagadish, Accountant Member
IT Appeal Nos. 6119, 6079 & 6141 (Mum.) of 2026
SEPTEMBER 7, 2026
Ms. Sruti Kalyanikar, AR for the Appellant. Ms. Rampriya Raghavan, CIT DR for the Respondent.
ORDER
Smt. Beena Pillai, Judicial Member. – These three appeals filed by the respective assessees are directed against the separate orders passed by the Ld. Commissioner of Income Tax (Exemptions), Mumbai [“Ld. CIT(E)”] u/s 12AB(1)(b)(ii) of the Income-tax Act, 1961 (“the Act”), rejecting their respective applications seeking renewal of registration. Since the issues involved in all these appeals are identical and arise out of substantially similar facts, they were heard together and are being disposed of by way of this consolidated order for the sake of convenience and brevity.
The relevant particulars of the appeals are as under:
| ITA No. | Name of the assessee | Date of impugned order |
| 6079/Mum/2026 | St. Francis Xavier Church | 29/03/2026 |
| 6119/Mum/2026 | Our Lady of Remedy Church | 30/03/2026 |
| 6141/Mum/2026 | Conference of Our Lady of Dolours | 30/03/2026 |
2. The grounds raised by the respective assessees are identical. For the sake of convenience, the grounds raised in ITA No. 6079/Mum/2026 are reproduced hereunder:
“1. THE ORDER BAD IN LAW, ILLEGAL AND WITHOUT JURISDICTION
1.1 In the facts and the circumstances of the case, and in law, the order passed by Commissioner of Income Tax (Exemption), Mumbai [‘Ld. CIT’] in Form 10AD, rejecting the application for renewal of registration, is bad in law, illegal and without jurisdiction, as –
| (i) | the same is not in accordance with the statutory provisions of the Income tax Act, 1961 [‘the Act’]; and |
| (ii) | the same is arbitrary and perverse. |
2. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE
2.1 In the facts and the circumstances of the case, and in law, the impugned order is bad in law and illegal, as the same is framed in gross breach of the principles of Natural Justice.
2.2 Without prejudice to the generality of the above ground, the impugned order is bad in law and illegal as no sufficient and fair opportunity of being heard was provided to the Appellant.
2.3 It is submitted that in the facts and the circumstances of the case, and in law, the order is bad in law and illegal on this ground as well.
WITHOUT FURTHER PREJUDICE TO THE ABOVE (ON MERITS)
3. REJECTION OF THE APPLICATION FOR RENEWAL OF REGISTRATION
3.1 The CIT (E) erred in passing the order in Form 10AD, rejecting the application of the Appellant seeking renewal of registration, solely on the ground of alleged non furnishing of instrument of creation or establishment of Trust.
3.2 While doing so, the CIT(E) erred in:
| (i) | Basing his action on surmises, suspicion and conjecture; |
| (ii) | Taking into account irrelevant and extraneous considerations; and |
| (iii) | Ignoring relevant material and considerations as submitted by the Appellant. |
3.3 It is submitted that in the facts and the circumstances of the case, and in law, no such rejection was called for.
4. LIBERTY
The Appellant craves leave to add, alter, delete or modify all or any the above ground at the time of hearing.”
3. Brief facts common to these appeals are that the respective assessees are religious-cum-charitable institutions which filed applications in Form No. 10AB seeking renewal of their regular registration under the provisions of section 12AB of the Act. During the course of proceedings, the Ld. CIT(E) called upon the respective assessees to furnish documents prescribed under Rule 17A(2) of the Income-tax Rules, 1962 (“the Rules”).
3.1. In response thereto, the respective assessees furnished certain details and supporting documents. The consistent stand taken before the Ld. CIT(E) was that the institutions had not been created under separate written trust deeds/Memoranda of Association and, therefore, such instruments were not available for being furnished. It was further explained that the institutions were governed by Canon Law and were registered as public charitable trusts under the Maharashtra Public Trusts Act, 1950. In the case of St. Francis Xavier Church, the impugned order itself records that the assessee furnished the application made for registration as a public charitable trust as well as the certificate of registration granted by the Charity Commissioner.
3.2. Similar was the position in the case of Our Lady of Remedy Church. The Ld. CIT(E) recorded that the assessee explained that it had not been created under a separate written trust deed or Memorandum of Association and that administration of the Church, its properties, income and expenditure was in accordance with Canon Law. The assessee also furnished a copy of the application for registration of the public trust.
3.3. In the case of Conference of Our Lady of Dolours also, the Ld. CIT(E) recorded that the assessee stated that it had not been created under a separate written trust deed or Memorandum of Association and that it had been established and was functioning as a religious and charitable unit. The assessee had also furnished the Form of Application for Registration of Public Trust. The Ld. CIT(E), however, was of the view that the same constituted evidence of registration and not evidence of creation of the trust.
4. The Ld. CIT(E) was not satisfied with the explanations furnished by the respective assessees. Referring to section 12AB(1)(b) of the Act read with Rule 17A(2) of the Rules, the Ld. CIT(E) was of the view that in the absence of the instrument of trust/MOA, the requisite satisfaction regarding the objects of the respective institutions and genuineness of their activities could not be arrived at.
4.1. The Ld.CIT(E) observed that the instrument of trust constituted the foundational and constitutive document governing creation or establishment of a trust and that such document ordinarily sets out the objects and purposes of the trust, intended beneficiaries, property held under trust, powers and functions of trustees and the manner of administration. On this reasoning, the Ld.CIT(E) concluded that furnishing of the instrument of trust/MOA was mandatory for examining the applications seeking renewal of registration.
4.2. Accordingly, the respective applications seeking renewal of registration were rejected.
Aggrieved by the aforesaid orders, the respective assessees are in appeal before us.
5. The Ld. AR submitted that the Ld. CIT(E) erred in rejecting the applications merely because the respective assessees did not possess formal instruments of trust/MOA. He submitted that Rule 17A(2) itself recognises institutions created or established otherwise than under an instrument and, therefore, the absence of a formal written trust deed cannot constitute a ground for rejection of registration.
5.1. The Ld. AR further submitted that the respective institutions are old religious and charitable institutions and are registered as public trusts under the Maharashtra Public Trusts Act, 1950. It was submitted that the available documents evidencing their existence, registration and functioning were placed before the Ld. CIT(E). According to the Ld. AR, these documents were required to be considered in terms of Rule 17A(2)(b) instead of insisting upon an instrument which never existed.
5.2. The Ld. DR, on the other hand, relied upon the respective impugned orders. He submitted that the Ld. CIT(E) was required to satisfy himself regarding the objects of the respective institutions and genuineness of their activities before granting renewal u/s 12AB. According to the Ld. DR, in the absence of the foundational documents evidencing their creation or establishment, the Ld. CIT(E) could not arrive at the satisfaction mandated under the Act.
We have perused the submissions advanced by both sides in light of the record placed before us.
6. The controversy before us lies in a narrow compass. The applications filed by the respective assessees seeking renewal of registration u/s 12AB have essentially been rejected on account of their failure to furnish an instrument of creation or establishment, namely, a formal trust deed/Memorandum of Association. The Ld. CIT(E) proceeded on the premise that in the absence of such instrument, satisfaction contemplated u/s 12AB regarding the objects of the respective institutions and genuineness of their activities could not be arrived at.
6.1. For appreciating the controversy, it is relevant to refer to Rule 17A(2) of the Rules. The relevant portion, as reproduced by the Ld. CIT(E) himself in the impugned orders, provides as under:
“(2) The application under sub-rule (1) shall be accompanied by the following documents, as required by Form 10A or 10AB, as the case may be, namely:-
(a) where the applicant is created, or established, under an instrument, self-certified copy of such instrument creating or establishing the applicant;
(b) where the applicant is created, or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation or establishment of the applicant;
(c) Self certified copy of registration with Registrar of Companies or Registrar of Firms and societies or Registrar of Public Trusts, as the case may be;”
6.2. A plain reading of the aforesaid Rule makes it clear that it specifically contemplates two distinct situations. Clause (a) deals with an applicant which is created or established under an instrument, whereas clause (b) specifically deals with an applicant which is created or established otherwise than under an instrument. Thus, the statutory framework itself recognises that every trust or institution seeking registration or renewal u/s 12AB need not necessarily have been created under a formal written instrument.
6.3. In our considered opinion, therefore, the finding of the Ld. CIT(E) that furnishing of an instrument of trust/MOA is invariably mandatory cannot be reconciled with the plain language of Rule 17A(2)(b). In fact, while reproducing clause (b) of Rule 17A(2), which expressly contemplates an institution created otherwise than under an instrument, the Ld. CIT(E) proceeded thereafter on the premise that furnishing of an instrument of trust/MOA was mandatory.
6.4. Where an applicant specifically claims that it was not created or established under a formal written instrument, the enquiry cannot terminate merely because a conventional trust deed/MOA is unavailable. In such circumstances, what is required to be examined is whether the documents furnished by the applicant constitute sufficient evidence of its creation or establishment within the meaning of Rule 17A(2)(b).
6.5. We also note that clause (c) of Rule 17A(2) independently contemplates furnishing of a self-certified copy of registration with the Registrar of Public Trusts, as the case may be. In the present appeals, the respective assessees claim to be registered under the Maharashtra Public Trusts Act, 1950. The documents evidencing such registration and other available material therefore constitute relevant evidence which ought to be examined along with the other documents relating to their creation, establishment, objects and functioning.
6.6. At the same time, we are conscious that registration under the Maharashtra Public Trusts Act, 1950, by itself, would not automatically entitle an applicant to registration or renewal under the Income-tax Act. Section 12AB requires the competent authority to arrive at the prescribed satisfaction regarding the objects of the trust or institution, genuineness of its activities and compliance with such requirements of any other law as are material for achieving its objects. The Ld. CIT(E) is also empowered to call for such documents or information and make such enquiries as considered necessary for arriving at the statutory satisfaction. These parameters have themselves been noticed in the impugned orders.
6.7. In the present cases, it is not the case of the Revenue that the respective assessees were created or established under written instruments which they have failed to produce. On the contrary, the consistent explanation of the assessees has been that no separate written trust deed/Memorandum of Association exists and that they are religious and charitable institutions governed in accordance with Canon Law and registered as public trusts under the Maharashtra Public Trusts Act, 1950. In the case of St. Francis Xavier Church, the impugned order itself records that the assessee had furnished the application made for registration as a public charitable trust as well as the certificate of registration granted by the Charity Commissioner. Similarly, in the case of Our Lady of Remedy Church, the Ld. CIT(E) records that the assessee had explained the absence of a separate written trust deed/MOA and had furnished the Form of Application for Registration of Public Trust. The same factual position emerges in the case of Conference of Our Lady of Dolours.
6.8. In these circumstances, we are unable to sustain the reasoning adopted by the Ld. CIT(E). Rule 17A(2)(a) applies where an applicant is created or established under an instrument, whereas Rule 17A(2)(b) specifically takes within its ambit an applicant created or established otherwise than under an instrument. If production of a formal trust deed/MOA were mandatory in every case, clause (b) would be rendered otiose. Such an interpretation cannot be accepted.
6.9. We further note that the impugned orders do not record any adverse finding regarding the genuineness of the activities carried on by the respective assessees. The applications have ultimately been rejected on account of failure to submit the instrument of creation or establishment or a document evidencing such creation. In the case of Conference of Our Lady of Dolours, the concluding portion of the impugned order specifically records that the application was not allowable on the ground of failure to submit the copy of the instrument of creation or establishment of trust or document evidencing creation of trust. The same essential basis permeates the other impugned orders.
6.10. When the statute and the Rules themselves recognise the existence of an institution created or established otherwise than under an instrument, renewal of registration cannot be denied merely because such institution is unable to produce a document which, according to its very case, never existed. The material evidencing registration and continued legal existence of the respective assessees under the Maharashtra Public Trusts Act, 1950, could not have been disregarded merely for want of a conventional trust deed/MOA.
6.11. In view of the above discussion, we hold that the Ld. CIT(E) was not justified in rejecting the applications seeking renewal of registration u/s 12AB on the ground adopted in the respective impugned orders. Accordingly, the impugned orders passed by the Ld. CIT(E) are set aside.
We accordingly direct the Ld. CIT(E) to grant renewal of registration u/s 12AB to the respective assessees in accordance with law. Our findings and directions hereinabove shall apply mutatis mutandis to all the three appeals.
Accordingly, the grounds raised by the respective assessees stand allowed.
In the result, all the three appeals filed by the respective assessees are allowed.