Registration Under Section 12AB Cannot Be Denied Solely for Want of Formal Written Trust Deed

By | November 4, 2026
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Registration Under Section 12AB Cannot Be Denied Solely for Want of Formal Written Trust Deed

Issue

Whether CIT(A)/CIT(E) can reject an application for renewal of registration under Section 12AB (Form No. 10AB) on the ground of non-furnishing of a formal written trust deed or Memorandum of Association, where the trust is registered under a state public trust law and supported by official statutory records.

Facts

  • Renewal Application: The assessee-trust filed an application in Form No. 10AB seeking renewal of registration under Section 12AB of the Income-tax Act, 1961.
  • Public Trust Status: The assessee was a public trust duly registered under the Maharashtra Public Trusts Act, 1950, and stated that it had no formal written trust deed or Memorandum of Association.
  • Submitted Evidence: In support of its creation and existence, the trust furnished official records of registration with the Charity Commissioner, including the original registration application, the certificate issued by the Charity Commissioner, and contemporaneous statutory records.
  • Rejection by CIT(E): The CIT(E) rejected the application under Section 12AB(1)(b) read with Rule 17A(2), treating the submission of an instrument of trust/Memorandum of Association as a mandatory prerequisite.

Decision

  • Interpretation of Rule 17A(2): Rule 17A(2) provides alternative modes for proving the establishment of a trust; where a trust is established under a specific law, a formal written trust deed is not mandatory. (Para 5.2 & 5.7)
  • Rejection Unsustainable: The CIT(E)’s rejection of the renewal application for failure to furnish a written trust deed or Memorandum of Association was held legally unsustainable. (Para 5.10)
  • Direction to Grant Registration: The CIT(E) was directed to grant the renewal of registration under Section 12AB to the assessee-trust. (Para 5.10) (In favour of assessee)

Key Takeaways

  • No Mandatory Requirement of Formal Deed: A formal written trust deed is not indispensable for Section 12AB registration if the trust’s creation and existence are evidenced by registration under a State Public Trust Act and supporting statutory records.
  • Rule 17A(2) Provisions Are Flexible: Rule 17A(2) recognizes multiple avenues for proving a trust’s legal establishment, ensuring that older public trusts functioning under statutory public trust frameworks without formal deeds are not unfairly disqualified.
IN THE ITAT MUMBAI BENCH ‘C’
St. Sebastians Church
v.
Commissioner of Income-tax, Exemptions
Smt. Beena Pillai, Judicial Member
and Jagadish, Accountant Member
IT Appeal No. 5676 (Mum.) of 2026
OCTOBER  12, 2026
Ms. Vasanti Patel, AR for the Appellant. Rajdeep Singh, CIT-DR for the Respondent.
ORDER
Smt. Beena Pillai, Judicial Member. – This appeal by the assessee is directed against the order dated 29/03/2026 passed by the Ld. Commissioner of Income Tax (Exemptions), Mumbai [“Ld. CIT(E)”], rejecting the application filed by the assessee in Form No. 10AB seeking renewal of registration u/s. 12AB of the Income-tax Act, 1961 (“the Act”) on following grounds of appeal:
“On the facts and circumstances of the case and in law,
1.] The learned CIT(E) erred in rejecting the Application for Registration under Section 12AB of the Act solely on the ground that the Appellant failed to furnish the instrument of Trust/MOA as it amounts to non-compliance and non-fulfillment of mandatory requirements prescribed under Section 12AB (1)(b) of the Act read with Rule 17A(2) of the Income Tax Rules, 1962.
2.] The learned CIT(E) erred in observing that the application in Schedule II and subsequent registration Certificate issued by the Charity Commissioner do not constitute documents “evidencing the creation of the trust” as prescribed under Rule 17A(2)(b) of Income tax Rules, 1962 by completely overlooking the fact that the appellant is a religious and charitable trust duly registered with the Charity Commissioner under the Maharashtra Public Trusts Act, 1950 based on valid declaration of trust since the year 1955 and exists as a public charitable trust.
3.] The learned CIT(E) failed to consider and appreciate the Certificate of Registration granted by the Charity Commissioner under the Maharashtra Public Trusts Act, 1950 which is a valid document that establishes the existence of the Appellant Trust and is covered by the provisions of Rule 17(A)(2)(b) – any document evidencing the creation or establishment of the trust.
4.] The learned CIT(E) erred in observing that the Canon Law does not have any direct application for management and administrations of charitable trusts.
5.] The learned CIT(E) erred in relying upon the provisions of the Indian Trusts Act, 1882 as the same are clearly not applicable in the case of the Appellant Trust – as it is undisputedly a public charitable trust.
6.] The learned CIT(E) erred in summarily rejecting the renewal application without considering the historical context and past records and evidence like audit reports and Return of Income filed over the past several decades that confirm the trust’s longstanding charitable existence.
7.] The CIT(E) failed to appreciate that there has been no change in the objects of the Appellant, the nature of its activities, or the applicable law, the learned CIT(E) is bound by the “Rule of Consistency” as established by the Hon’ble Supreme Court in Radhasoami Satsang vs. CIT. The CIT (E) cannot arbitrarily change its stand to deny a status it has historically recognized and accepted.
8.] The learned CIT(E) failed to appreciate that the Department has granted/renewed registration under Section 12A/12AA/12AB of the Act for several decades in the past based on the same set of documents furnished on earlier occasions.
9.] The learned CIT(E) failed to appreciate that his power under section 12AB of the Act is limited to verifying the genuineness of the activities of the charitable nature of object which in the case of the Appellant has not been doubted and therefore the order passed by the CIT(E) on the alleged ground based on format of the document, rather than the nature of the activities is contrary to the provisions of the Act.
10.] The learned CIT(E) failed to appreciate that the rejection Order passed by him certainly affects the day-to-day management and functioning of the Appellant Trust though he may not have intended so.” The challenge raised in the aforesaid grounds essentially relates to rejection of renewal of registration u/s. 12AB of the Act for non-furnishing of a formal instrument of trust/Memorandum of Association.
2. Brief facts of the case are as under:-
The assessee is a religious-cum-charitable institution registered as a public charitable trust under the Maharashtra Public Trusts Act, 1950. The assessee filed an application on 29/09/2025 in Form No.10AB under clause (ii) of section 12A(1)(ac) of the Act seeking renewal of its regular registration. On verification of the application, the Ld. CIT(E) observed that certain documents prescribed under Rule 17A(2) of the Income-tax Rules, 1962 (“the Rules”) had not been furnished. Accordingly, a notice dated 13/11/2025 was issued requiring the assessee to furnish the complete set of documents. In response thereto, the assessee filed its reply dated 10/12/2025 along with certain details and supporting documents. Thereafter, vide notice dated 04/02/2026, the assessee was specifically called upon to furnish a self-certified copy of the instrument of trust/Memorandum of Association. The assessee explained that it was governed by Canon Law and that no formal written trust deed had been executed. It was further submitted that the assessee stood registered as a public charitable trust under the Maharashtra Public Trusts Act, 1950 on the basis of the application made in the prescribed form before the Charity Commissioner.
2.1. The assessee furnished before the Ld. CIT(E) the application made for registration as a public trust along with the certificate of registration issued by the Charity Commissioner. The Ld. CIT(E), however, observed that such documents merely evidenced registration of the assessee as a public trust and did not constitute an instrument or document evidencing creation or establishment of the trust. The Ld. CIT(E) further observed that the assessee had not furnished any scheme for management and administration of the trust settled by the Charity Commissioner or by a competent Court.
2.2. The Ld. CIT(E) was of the view that an instrument of trust constituted the foundational document from which the nature and objects of the institution, intended beneficiaries, powers and duties of the trustees, manner of administration and utilisation of income and property could be ascertained. According to the Ld. CIT(E), in the absence of such an instrument, the requisite satisfaction contemplated u/s. 12AB of the Act could not be arrived at. The Ld. CIT(E), accordingly, held that failure of the assessee to furnish the instrument of trust/MoA amounted to non-compliance and non-fulfilment of the requirements prescribed u/s. 12AB(1)(b) of the Act read with Rule 17A(2) of the Rules. The application seeking renewal of registration was therefore rejected.
Aggrieved by the aforesaid order, the assessee is in appeal before us.
3. The Ld. AR submitted that the assessee is an old religious and charitable institution registered as a public charitable trust under the Maharashtra Public Trusts Act, 1950 and has been enjoying registration under the provisions of the Act for several decades. The Ld. AR submitted that the assessee had never been constituted under a separate formal written trust deed or Memorandum of Association and, therefore, no such instrument was available for production before the Ld. CIT(E). It was submitted that the assessee had nevertheless furnished the records pertaining to its registration with the Charity Commissioner, including the application made for registration and the certificate issued by the competent authority.
3.1. The Ld. AR submitted that the documents furnished before the Ld. CIT(E) evidenced the creation, establishment, registration and continued existence of the assessee as a public religious and charitable institution. It was therefore submitted that rejection of the application solely for non-production of a document which admittedly never existed was contrary to the scheme of Rule 17A(2). The Ld. AR drew our attention to Rule 17A(2) of the Rules and submitted that clause (a) thereof applies where an applicant is created or established under an instrument, whereas clause (b) expressly applies where an applicant is created or established otherwise than under an instrument. According to the Ld.AR, the latter provision would become redundant if production of a formal trust deed were to be insisted upon in every case.
3.2. The Ld. AR further submitted that there has been no change in the objects or activities of the assessee and no adverse finding has been recorded regarding the genuineness of the religious and charitable activities carried on by it. It was submitted that the registration granted to the assessee under the Act had continued for several decades and the application before the Ld.CIT(E) was merely for renewal thereof. The Ld.AR accordingly prayed that the impugned order be set aside and renewal of registration u/s.12AB of the Act be granted.
4. The Ld.DR relied upon the observations recorded by the Ld.CIT(E) in the impugned order. It was submitted that the document creating or establishing a trust is material for verification of its objects, beneficiaries, manner of administration, powers and duties of the trustees and utilisation of the properties and income of the institution. The Ld.DR accordingly supported the rejection of the application.
We have perused the submissions advanced by both sides in light of the record placed before us.
5. We note that the principal controversy before us is whether renewal of registration u/s.12AB of the Act can be denied merely because the assessee, which claims to have been created or established otherwise than under a formal written instrument, could not furnish a trust deed/Memorandum of Association.
5.1. It would be relevant, at this stage, to consider Rule 17A(2) of the Income-tax Rules, 1962. The relevant provisions read 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;
…………………………..”
5.2. A plain reading of Rule 17A(2) shows that the Rules themselves recognise two separate modes by which an applicant may have been created or established. Clause (a) deals with a case where the applicant has been created or established under an instrument, whereas clause (b) specifically deals with a case where the applicant has been created or established otherwise than under an instrument. Thus, the statutory framework itself recognises that every trust or institution need not necessarily owe its creation or establishment to a formal written trust deed or Memorandum of Association. Where an applicant has been created under an instrument, production of such instrument is required under clause (a). Where, however, the applicant has been created or established otherwise than under an instrument, clause (b) requires production of the document evidencing its creation or establishment.
5.3. In the present case, the assessee had specifically explained before the Ld.CIT(E) that no separate formal written trust deed or Memorandum of Association existed. The impugned order itself records that the assessee was registered as a public charitable trust under the Maharashtra Public Trusts Act, 1950 and that it had furnished before the Ld.CIT(E) the application made for registration as a public trust as well as the certificate of registration issued by the Charity Commissioner.
5.4. In such circumstances, the assessee could not be expected to furnish an instrument which, according to it, had never been executed. The question that was required to be considered was whether the documents otherwise placed on record evidenced the creation or establishment and continued existence of the assessee within the meaning of Rule 17A(2)(b).
5.5. We find that the Ld.CIT(E), after reproducing both clauses (a) and (b) of Rule 17A(2), nevertheless proceeded on the premise that furnishing of an instrument of trust/MoA was mandatory in every case. Such an interpretation, in our considered view, does not give effect to the distinction expressly drawn by the legislature between an institution created under an instrument and an institution created or established otherwise than under an instrument. If production of a formal written instrument were indispensable in every case, clause (b) of Rule 17A(2), which specifically provides for an applicant created or established otherwise than under an instrument, would be rendered otiose. The provisions of the Rule are required to be read harmoniously so as to give meaning and effect to both clauses.
5.6. We further note that the present application is not an application by a newly constituted institution seeking registration for the first time. The assessee has specifically pleaded that it has existed as a public religious and charitable trust since the year 1955 and has been granted/renewed registration under sections 12A/12AA/12AB of the Act for several decades. Even in the impugned order, there is no finding that the assessee has ceased to exist as a religious and charitable institution. There is also no independent adverse finding regarding the actual genuineness of the activities carried on by the assessee. The rejection essentially proceeds on the alleged failure to furnish a formal instrument of creation/establishment or a document considered by the Ld.CIT(E) sufficient for such purpose.
5.7. The fact that the assessee had furnished the documents relating to its registration under the Maharashtra Public Trusts Act, 1950 assumes significance. The application made before the Charity Commissioner, the certificate of registration and the contemporaneous statutory records relating thereto cannot simply be disregarded on the premise that they evidence only registration and not creation or establishment. The entirety of such material has to be appreciated in the historical context in which the institution came into existence and has continued to function.
5.8. We also do not find merit in the reasoning that absence of a formal written trust instrument, by itself, makes it impossible in every case to verify the objects or public character of an institution. Rule 17A(2)(b) itself proceeds on the basis that such verification may be undertaken from documents evidencing creation or establishment where no formal instrument exists. The observations made by the Ld.CIT(E) with reference to the Indian Trusts Act, 1882 also cannot override the specific statutory scheme contained in Rule 17A(2). Even if general principles relating to trusts may be referred to for a limited purpose, they cannot be applied in a manner which would render the express language of Rule 17A(2)(b) redundant. Similarly, the assessee’s reliance upon Canon Law was only in explanation of the historical and ecclesiastical manner in which the institution was constituted and governed. The issue before us is not whether Canon Law substitutes the statutory requirements under the Income-tax Act or the Maharashtra Public Trusts Act. The limited question is whether renewal under the Act could be rejected solely for absence of a formal written trust deed despite Rule 17A(2)(b) expressly recognising institutions created or established otherwise than under an instrument.
5.9. In our considered view, the answer has to be in the negative. The statutory requirement has to be applied according to the manner in which the applicant was actually created or established. In the case of an institution created or established otherwise than under a formal instrument, the relevant enquiry is whether there exists satisfactory documentary evidence evidencing its creation or establishment. In the facts of the present case, the assessee had placed on record the documents relating to its registration as a public charitable trust under the Maharashtra Public Trusts Act, 1950. Its long-standing existence and earlier registration under the Income-tax Act have also not been disputed in the impugned order. There is further no adverse finding as regards the genuineness of the religious and charitable activities actually carried on by the assessee.
5.10. We therefore hold that the Ld.CIT(E) was not justified in rejecting the assessee’s application for renewal of registration u/s.12AB of the Act merely on account of absence of a formal written trust deed or Memorandum of Association, when the assessee had otherwise placed on record documentary material evidencing its registration and continued existence as a public religious and charitable institution. Accordingly, we set aside the impugned order dated 29/03/2026 passed by the Ld.CIT(E).
In view of the foregoing discussion and having regard to the fact that the impugned rejection rests essentially upon nonproduction of a formal written trust deed/Memorandum of Association, we direct the Ld. CIT(E) to grant renewal of registration u/s. 12AB of the Act in accordance with law.
Accordingly, the grounds raised by the assessee are allowed.
In the result, the appeal filed by the assessee is allowed.