Absence of a formal trust deed cannot preclude Section 12AB registration and Section 80G approval.

ORDER

1. These two appeals have been preferred by the assessee, St. Joseph’s High School, against two separate orders both dated 29.03.2026 passed by the learned Commissioner of Income Tax (Exemption), Mumbai [—CIT(E)”]. The first appeal in ITA No. 5646/Mum/2026 arises from the order passed under section 12AB of the Income-tax Act, 1961 (—the Act”), whereby the learned CIT(E) rejected the assessee’s application filed in Form No.10AB seeking renewal of its registration under section 12AB of the Act. The second appeal in ITA No. 5849/Mum/2026 arises from the consequential order rejecting the assessee’s application for approval under section 80G(5) of the Act. Since both the appeals arise out of common facts, involve overlapping questions of law and were heard together, they are being disposed of by this consolidated order for the sake of convenience and to avoid repetition.

2. The assessee is a public charitable trust administering St. Joseph’s High School situated at Vikhroli, Mumbai. The institution traces its origin to the year 1966 and has, since its inception, been engaged in imparting primary and secondary education without any discrimination based on caste, creed, religion or social status. It is not in dispute that the institution has been registered as a public trust under the Maharashtra Public Trusts Act, 1950 and has enjoyed recognition from various statutory and educational authorities over several decades. It has also remained registered under the provisions of the Income-tax Act and has consistently claimed exemption under sections 11 and 12. In the new registration regime introduced by the Finance Act, 2020, the assessee had also been granted registration under section 12AB vide Form No.10AC, which remained valid up to the assessment year under consideration. The present proceedings have arisen only because the assessee, upon expiry of the earlier registration, filed an application in Form No.10AB seeking renewal of such registration in accordance with law.

3. During the course of proceedings before the learned CIT(E), notices were issued calling upon the assessee, inter alia, to furnish a self-certified copy of the instrument creating or establishing the trust or its Memorandum of Association in terms of Rule 17A of the Income-tax Rules, 1962. In response, the assessee explained that it was never constituted under a separate written trust deed or Memorandum of Association and that, being an educational institution established and administered by the Roman Catholic Diocese, its internal administration was governed by Canon Law. It was further explained that, in lieu of a formal trust deed, the assessee had furnished the application submitted before the Charity Commissioner at the time of its registration under the Maharashtra Public Trusts Act together with the certificate of registration issued by the Charity Commissioner and other supporting documents evidencing its creation, existence and continuous charitable activities. According to the assessee, these documents constituted sufficient compliance with the requirements of Rule 17A(2)(b), which specifically contemplates cases where a trust has been created otherwise than under a written instrument.

4. The learned CIT(E), however, did not accept the explanation furnished by the assessee. According to him, production of the instrument of trust or Memorandum of Association constituted a mandatory statutory requirement for examining the charitable objects of the institution, the nature of its beneficiaries, the authority of the trustees and the legal framework governing the trust. Since no such instrument was produced despite specific requisitions, the learned CIT(E) held that he was unable to record satisfaction regarding the objects of the trust, the genuineness of its activities and the fulfilment of the statutory conditions contemplated under section 12AB(1)(b) of the Act. He further held that the application submitted before the Charity Commissioner and the certificate of registration issued under the Maharashtra Public Trusts Act could not be regarded as documents evidencing the creation or establishment of the trust for the purposes of Rule 17A. Proceeding on this reasoning, he rejected the assessee’s application for renewal of registration under section 12AB. Since, in his opinion, a valid registration under section 12AB constituted a pre-condition for grant of approval under section 80G(5), the application seeking approval under section 80G was also rejected solely on that basis, without recording any independent finding regarding the genuineness of the assessee’s charitable activities or its eligibility under section 80G.

5. Aggrieved by the aforesaid orders, the assessee is in appeal before us. The principal grievance of the assessee is that the learned CIT(E) has fundamentally misdirected himself in law by treating the existence of a formal written trust deed as an indispensable condition for grant of registration under section 12AB, while completely overlooking the statutory distinction recognised under Rule 17A between trusts created under a written instrument and those established otherwise than under such an instrument. It has been contended that the assessee, being a public charitable trust duly registered under the Maharashtra Public Trusts Act since the year 1966 and continuously recognised by the Income-tax Department for several decades, had furnished all documents legally required to establish its creation, existence and charitable character. According to the assessee, the impugned orders proceed on an erroneous interpretation of the statutory provisions and disregard both the legislative scheme as well as the settled judicial precedents governing the scope of enquiry under section 12AB. These rival submissions shall now be examined in the light of the statutory provisions and the legal position governing the controversy before us.

6. Before us, the learned counsel appearing on behalf of the assessee assailed the impugned orders by submitting that the entire foundation on which the learned CIT(E) proceeded is legally unsustainable and contrary to the statutory scheme governing registration of charitable institutions. It was submitted that the assessee has existed as a public charitable educational institution since the year 1966 and has throughout been carrying on the sole charitable activity of imparting education. It was emphasized that the assessee was never constituted under a separate written trust deed or Memorandum of Association and, therefore, the insistence upon production of such a document proceeds on an erroneous assumption that every charitable trust must necessarily owe its existence to a written instrument. Learned counsel submitted that Rule 17A itself recognises two distinct categories of trusts, namely, those created under an instrument and those created otherwise than under an instrument. Since the assessee falls within the latter category, it had furnished the statutory application filed before the Charity Commissioner together with the registration certificate issued under the Maharashtra Public Trusts Act, which, according to the learned counsel, clearly constitute documents evidencing the creation and establishment of the trust within the meaning of Rule 17A(2)(b). It was further submitted that the learned CIT(E), while placing complete reliance upon Rule 17A(2)(a), has virtually rendered Rule 17A(2)(b) otiose, thereby defeating the very legislative distinction consciously incorporated in the Rule. Learned counsel further invited our attention to the assessee’s uninterrupted registration under section 12A since 1988, the subsequent grant of registration under the new regime vide Form No.10AC with effect from 23.09.2021, and the consistent acceptance of the assessee’s charitable status by the Department over several decades. It was, therefore, submitted that in the absence of any change either in the objects of the trust, its activities or the governing statutory provisions, the impugned orders violate the well-settled rule of consistency recognised by the Hon’ble Supreme Court as well as the Hon’ble jurisdictional Bombay High Court. Strong reliance was placed upon the decisions in Laxminarayan Maharaj v. CIT, Merciful Jesus Church v. CIT (Exemption), Tsurphu Labrang v. DIT (Exemption), Pr. CIT (Exemption) v. Dawoodi Bohra Masjid, Shree Ram Gopal Temple Trust v. CIT (Exemption), Ananda Social & Educational Trust v. CIT and the recent judgment of the Hon’ble Bombay High Court in Chamber of Tax Consultants v. CIT (Exemptions) to contend that the enquiry under section 12AB is confined to examining the charitable objects and genuineness of activities and cannot be expanded by importing a mandatory requirement of a written trust deed where the statute itself recognises trusts created otherwise than under an instrument. ITA No.5646 and 5849-Mum-2026 St. Josephs High School.doc

7. Per contra, the learned Departmental Representative strongly relied upon the reasoning recorded in the impugned orders and submitted that the learned CIT(E) has acted strictly in accordance with the statutory mandate contained in section 12AB read with Rule 17A of the Income-tax Rules. According to him, the instrument of trust constitutes the foundational document from which the very existence of a trust, its charitable objects, the identity of its beneficiaries, the powers and obligations of its trustees and the legal framework governing its administration can be ascertained. In the absence of such a constitutive document, the learned CIT(E) was fully justified in holding that no proper satisfaction could be recorded regarding the statutory conditions prescribed under section 12AB(1)(b). It was submitted that the application submitted before the Charity Commissioner and the certificate of registration merely recognise the existence of a trust but cannot substitute the instrument creating the trust itself. It was further contended that the reliance placed by the assessee upon Canon Law was wholly misplaced, since the provisions governing registration under the Income-tax Act are required to be examined with reference to the statutory framework enacted by Parliament and not with reference to ecclesiastical law. The learned Departmental Representative, therefore, supported the conclusion of the learned CIT(E) that the assessee having failed to furnish the essential document required for examining the charitable character and legal constitution of the trust, the rejection of the application under section 12AB, and consequently under section 80G, calls for no interference. ITA No.5646 and 5849- Mum-2026 St. Josephs High School.doc

8. We have carefully considered the rival submissions, perused the impugned orders, the material placed before us and the judicial precedents relied upon by both the parties. The controversy, though apparently arising from the rejection of an application for renewal of registration under section 12AB, in substance raises a far more fundamental question regarding the true scope and ambit of the Commissioner’s jurisdiction while examining an application under the said provision. More particularly, the issue requiring our adjudication is whether, in the case of a public charitable trust admittedly not constituted under a formal written instrument, the absence of a trust deed by itself constitutes a valid ground for refusing registration under section 12AB notwithstanding the production of other statutory documents evidencing the creation, existence and continued recognition of such trust under the applicable law. The answer to this question necessarily depends upon a harmonious construction of section 12AB of the Act, Rule 17A of the Income-tax Rules and the provisions governing public trusts under the Maharashtra Public Trusts Act, 1950.

9. Since the controversy essentially turns upon the interpretation of the statutory framework governing grant and renewal of registration under section 12AB, it would be appropriate, before examining the rival contentions, to reproduce the relevant statutory provisions. The controversy primarily revolves around the scope of enquiry contemplated under section 12AB(1)(b) of the Act and the true import of Rule 17A(2) of the Income-tax Rules, 1962, particularly the distinction drawn therein between trusts created under an instrument and those created otherwise than under an instrument. Equally relevant are the provisions of the Maharashtra Public Trusts Act, 1950, which prescribe the statutory mechanism for registration and recognition of public trusts and the legal consequences flowing therefrom. We shall, therefore, first notice these provisions before proceeding to examine the correctness of the reasoning adopted by the learned CIT(E).

10. Before adverting to the rival submissions on merits, it would be apposite to notice the statutory framework governing the controversy. The power of the Commissioner while considering an application for registration or renewal under section 12AB is traceable to section 12AB(1)(b) of the Act, which, insofar as relevant for the present controversy, reads as under:—

“12AB(1)(b): Where the application is made under sub-clause (ii), sub-clause (iii), sub-clause (iv) or sub-clause (v) of clause

(ac) of sub-section (1) of section 12A, the Principal Commissioner or Commissioner shall—

(i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about—

(A) the genuineness of activities of the trust or institution; and

(B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purposes of achieving its objects;

(ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), pass an order in writing registering the trust or institution for a period of five years, or, if he is not so satisfied, reject the application after affording a reasonable opportunity of being heard.”

A plain reading of the above provision demonstrates that the enquiry contemplated by the legislature is directed towards three broad aspects, namely, (i) the objects of the trust or institution; (ii) the genuineness of its activities; and (iii) compliance with such other laws as are material for achieving those objects. The provision does not prescribe any particular mode in which the existence of the trust is required to be established nor does it stipulate that registration can be granted only where the trust owes its existence to a formal written instrument. The extent of enquiry permissible under this provision shall be examined at a later stage while considering the rival legal submissions.

11. Equally significant for the present controversy is Rule 17A(2) of the Income-tax Rules, 1962, which prescribes the documents required to accompany an application made in Form No.10AB. The Rule, insofar as relevant, reads as under:—

Rule 17A(2):

“The application under sub-rule (1) shall be accompanied by the following documents, as required by Form No.10A or Form No.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, if any, with the Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be.”

The controversy in the present appeals substantially centres around the interpretation of clauses (a) and (b) extracted above. While the learned CIT(E) has proceeded on the footing that production of a trust deed or Memorandum of Association constitutes an indispensable statutory requirement, the assessee contends that clause (b) expressly recognises trusts established otherwise than under a written instrument and, therefore, permits production of any document evidencing the creation or establishment of such trust. The true import of these provisions, therefore, assumes considerable significance for deciding the issue before us.

12. Since the assessee claims to be a public charitable trust duly registered under the Maharashtra Public Trusts Act, 1950, it is equally necessary to notice the relevant provisions of the said enactment. Sections 19 and 20 require the Deputy or Assistant Charity Commissioner, upon receipt of an application for registration, to conduct a statutory enquiry regarding the existence of the trust, its public character, its objects, its properties, the names of trustees, the mode of succession and other prescribed particulars, and thereafter record findings supported by reasons. Section 21 provides that entries made in the statutory register in accordance with such findings attain finality subject to the provisions of the Act. Sections 73 and 74 further declare that such enquiries are judicial proceedings, while Section 80 bars the jurisdiction of civil courts in respect of matters entrusted to the authorities under the Act. Thus, the statutory scheme under the Maharashtra Public Trusts Act contemplates a detailed adjudicatory process before a public trust is recognised and registered by the competent statutory authority.

13. The learned CIT(E) has also placed reliance upon Sections 3 and 5 of the Indian Trusts Act, 1882, while emphasising the importance of a trust instrument. The assessee, on the other hand, contends that the Indian Trusts Act, in any event, has no application to public charitable trusts and that even otherwise Section 3 itself uses the expression —the instrument, if any, by which the trust is declared”, thereby recognising that a trust may exist without a formal written instrument. The rival submissions founded upon these provisions shall also require examination while considering the legality of the reasoning adopted in the impugned orders. At this stage, however, it is sufficient to observe that the controversy is not merely one of production of a document, but of correctly appreciating the legislative scheme governing public charitable trusts and the extent of enquiry contemplated under section 12AB read with Rule 17A.

14. Having carefully examined the rival submissions and the statutory framework governing the field, the first and foremost question which arises for our consideration is as to the true scope of the jurisdiction exercisable by the Commissioner while dealing with an application under section 12AB of the Act. In our considered opinion, the answer to the controversy must necessarily commence with the language employed by the Legislature itself. Section 12AB does not contemplate an adjudication akin to an assessment proceeding, nor does it authorise the Commissioner to undertake an exhaustive investigation into every conceivable aspect relating to the constitution or administration of a charitable institution. The legislative intent is clearly discernible from the provision itself, which confines the enquiry to examining the charitable objects of the trust, the genuineness of its activities and the compliance with such other laws as are material for achieving those objects. The satisfaction contemplated by the statute is thus one of a limited and prima facie nature intended to determine the eligibility of the institution for registration, and not to pronounce upon every legal aspect relating to its creation or governance.

15. It is equally significant that while section 12AB authorises the Commissioner to call for such documents and information as may be necessary for arriving at the aforesaid satisfaction, the provision nowhere elevates any particular document to the status of an indispensable statutory precondition for grant or renewal of registration. The requirement is functional rather than ritualistic. The purpose behind calling for documents is to enable the Commissioner to satisfy himself regarding the charitable character of the institution and the genuineness of its activities. Consequently, if such satisfaction can otherwise be reasonably arrived at from legally recognised and reliable material placed before him, the enquiry cannot be diverted into one concerning the mere form in which the institution came into existence, unless the statute expressly mandates such requirement. Any contrary interpretation would amount to reading into section 12AB a condition which the Legislature has consciously not incorporated.

16. The aforesaid legislative scheme also stands fortified by the decision of the Hon’ble Supreme Court in Ananda Social & Educational Trust v. CIT  (SC), wherein the Hon’ble Apex Court authoritatively explained the nature and ambit of the Commissioner’s enquiry at the stage of registration. The Supreme Court held that at the stage of grant of registration, the Commissioner is primarily required to satisfy himself regarding the charitable objects and the genuineness of the institution and that the scope of enquiry cannot be enlarged by importing considerations which the statute itself does not contemplate. The decision emphasises that the registration stage is intended to examine the eligibility of the institution and not to adjudicate matters which properly fall for consideration during assessment proceedings. The principle emerging from the aforesaid judgment is that the statutory enquiry must remain confined within the limits prescribed by the Legislature and cannot be expanded by imposing additional conditions not contemplated by the Act itself.

17. Examined in the backdrop of the aforesaid statutory scheme, we find that the principal basis adopted by the learned CIT(E) for rejecting the assessee’s application is not the absence of charitable objects, nor any doubt regarding the genuineness of its educational activities, nor even any violation of any material law governing its functioning. The rejection rests entirely upon the premise that since the assessee could not produce a separate written trust deed or Memorandum of Association, the Commissioner was disabled from recording the satisfaction contemplated under section 12AB. In our considered opinion, such an approach, at least prima facie, appears to shift the focus of enquiry from the statutory parameters expressly prescribed by Parliament to a requirement which is sought to be inferred from the form of documentation. Whether such inference is legally sustainable would necessarily depend upon the correct interpretation of Rule 17A, because it is that Rule which prescribes the nature of documents required to accompany an application under Form No. 10AB.

18. We are, therefore, of the considered view that the real controversy does not lie in the genuineness of the assessee’s activities or the charitable nature of its objects, both of which have remained consistently recognised over several decades. The core issue requiring adjudication is far narrower, though legally significant, namely, whether Rule 17A obliges every charitable institution seeking registration under section 12AB to produce a formal written instrument of trust irrespective of the manner in which such institution was originally constituted, or whether the Rule itself recognises institutions established otherwise than under a written instrument and permits production of alternative documents evidencing their creation or establishment. It is to this central question that we shall now advert.

19. The entire edifice of the impugned order rests upon the assumption that production of a formal instrument of trust or Memorandum of Association is an indispensable statutory requirement for grant or renewal of registration under section 12AB of the Act. In our considered opinion, such an assumption is not borne out from the plain language of Rule 17A itself. It is a settled canon of statutory interpretation that every word employed by the Legislature must be given its due meaning and no part of the statutory provision can be rendered redundant or otiose. Rule 17A(2), as reproduced hereinabove, consciously classifies applicants into two distinct categories. Clause (a) applies —where the applicant is created, or established, under an instrument”, whereas clause (b) applies —where the applicant is created, or established, otherwise than under an instrument.” These two clauses are clearly disjunctive and operate in mutually exclusive fields. The Legislature, therefore, has itself recognised that there may exist charitable institutions which do not derive their existence from a written instrument. If the interpretation canvassed by the Revenue were to be accepted, namely, that every applicant must necessarily produce a written trust deed irrespective of the manner of its creation, clause (b) would become wholly redundant. Such an interpretation, which renders an express statutory provision nugatory, is plainly impermissible.

20. Equally significant is the nature of the document contemplated under clause (b). Unlike clause (a), which requires production of the instrument creating or establishing the applicant, clause (b) merely requires —the document evidencing the creation or establishment of the applicant.” The Legislature has consciously employed two different expressions. The distinction is neither accidental nor without significance. Where the trust owes its origin to a written instrument, production of that constitutive document is naturally contemplated. However, where the institution has come into existence otherwise than under such an instrument, the Rule merely requires production of a document which evidences its creation or establishment. The emphasis, therefore, shifts from the constitutive instrument itself to the evidentiary material demonstrating the existence and establishment of the institution. The interpretation adopted by the learned CIT(E), however, virtually obliterates this legislative distinction by treating both clauses as though they prescribe one and the same requirement. Such an approach, in our opinion, travels beyond the language employed in the Rule and defeats the legislative intent underlying its bifurcated structure.

21. In the facts of the present case, it is an admitted position that the assessee has consistently maintained before the learned CIT(E) that it was never constituted under a separate trust deed or Memorandum of Association. Instead, it produced the statutory application submitted before the Charity Commissioner at the time of registration under the Maharashtra Public Trusts Act together with the certificate of registration issued pursuant to the statutory enquiry conducted under that enactment. The assessee also furnished its earlier registration under section 12A, the registration granted under section 12AB in the new regime vide Form No. 10AC, its recognition by the educational authorities, its registration on the NGO Darpan portal and other documents demonstrating its uninterrupted existence and educational activities spanning several decades. The correctness or genuineness of these documents has nowhere been doubted by the learned CIT(E). The rejection proceeds solely on the premise that, notwithstanding these documents, the absence of a formal written instrument by itself disentitles the assessee from registration. In our considered view, this approach overlooks the true import of Rule 17A(2)(b), which precisely contemplates cases where a trust has been established otherwise than under an instrument and permits production of documents evidencing such creation or establishment.

22. The above interpretation also finds considerable support from the statutory framework governing public trusts in the State of Maharashtra. Under the Maharashtra Public Trusts Act, a trust does not secure registration merely upon filing an application. Sections 19 and 20 mandate an independent statutory enquiry by the Deputy or Assistant Charity Commissioner into the existence of the trust, its public character, its objects, its properties, the trustees and other material particulars before recording findings and directing registration. The registration certificate is thus not a ministerial acknowledgment but the culmination of a quasijudicial process resulting in statutory recognition of the existence and character of the public trust. When Rule 17A(2)(b) speaks of a document evidencing the creation or establishment of the applicant, it would be difficult to hold, as an inflexible proposition, that a statutory registration certificate issued after such adjudicatory enquiry is altogether irrelevant or incapable of satisfying that requirement. Whether such document ultimately establishes compliance would naturally depend upon the facts of each case, but to reject it outright merely because it is not a trust deed amounts, in our view, to adopting an unduly restrictive construction which the Rule itself does not warrant.

23. At this stage, we may also observe that the issue before us is not whether every institution not constituted under a written instrument must invariably be granted registration under section 12AB. The Commissioner undoubtedly retains the jurisdiction to examine the charitable objects, the genuineness of activities and compliance with other applicable laws on the basis of the material produced before him. However, where the statute itself recognises institutions established otherwise than under an instrument, the enquiry cannot be prematurely concluded merely because a formal trust deed is unavailable. The question is whether the material produced is sufficient to enable the Commissioner to arrive at the satisfaction contemplated by section 12AB. In the present case, therefore, the real enquiry ought to have been directed towards the evidentiary value of the documents furnished by the assessee and not confined to the singular circumstance that no formal trust deed existed. It is in this backdrop that the evidentiary significance of the registration granted under the Maharashtra Public Trusts Act and the judicial precedents governing the issue assume decisive importance, to which we shall now advert.

24. There is yet another important aspect of the matter which, in our considered opinion, completely undermines the reasoning adopted by the learned CIT(E). The material placed before us unequivocally demonstrates that the assessee is not a newly constituted institution seeking registration for the first time. On the contrary, it is a public charitable educational institution which has been in existence since the year 1966, stands registered under the Maharashtra Public Trusts Act, has been recognised by the educational authorities of the State Government, has continuously enjoyed registration under section 12A of the Act since the year 1988 and, more importantly, had also been granted registration under the new regime by issuance of Form No.10AC with effect from 23.09.2021. It is equally not the case of the Revenue that there has been any alteration in the objects of the trust, any departure in the nature of its activities, any violation of the provisions governing charitable institutions or any other supervening circumstance warranting a different view. The entire basis for refusing renewal is the non-production of a formal trust deed, notwithstanding the fact that the very same documentary record had been accepted by the Department while granting registration on earlier occasions. In these circumstances, the departure made by the learned CIT(E) from the consistent stand adopted by the Department over several decades required a cogent and legally sustainable justification, which, in our opinion, is conspicuously absent in the impugned orders.

25. The doctrine of consistency, though not an inflexible rule of res judicata applicable to income-tax proceedings, is nevertheless a well-established principle of judicial discipline. The Hon’ble Supreme Court in Radhasoami Satsang v. CIT [1991] 100 CTR 267/[1992] 193 ITR 321 (SC) held that where a fundamental aspect permeating through different assessment years has been accepted consistently and allowed to attain finality, a departure therefrom is ordinarily unwarranted in the absence of a material change either in facts or in law. The same principle has subsequently been reiterated in CIT v. Excel Industries Ltd. [2013]   (SC) and other decisions. More importantly, the Hon’ble jurisdictional Bombay High Court, in Chamber of Tax Consultants v. CIT (Exemptions)  (Bombay), while dealing with renewal of registration under section 12AB, has held that where registration had earlier been granted under the same statutory framework on the basis of the very same constitutive documents, the Commissioner cannot introduce an altogether new condition at the stage of renewal in the absence of any material change in the governing facts or statutory provisions. The observations of the Hon’ble High Court apply with equal force to the facts before us. The impugned orders do not record any finding that the assessee’s objects have undergone any change, that its educational activities have ceased to be genuine, or that there has been any violation of any law material to the attainment of its charitable purposes. In the absence of any such finding, the learned CIT(E), in our considered opinion, was not justified in denying renewal solely on a ground which had never been regarded as fatal while granting registration over the preceding decades. ITA No.5646 and 5849-Mum-2026 St. Josephs High School.doc

26. Viewed holistically, therefore, the impugned orders suffer from a fundamental legal infirmity. The learned CIT(E) has proceeded on the premise that the absence of a formal written trust deed, by itself, disables him from recording the satisfaction contemplated under section 12AB. Such an approach, as discussed hereinabove, overlooks the express language of Rule 17A(2)(b), ignores the statutory recognition accorded to the assessee under the Maharashtra Public Trusts Act, fails to accord due evidentiary value to the documents placed on record, runs contrary to the consistent judicial interpretation placed upon the statutory provisions by various High Courts and the Tribunal, and is also inconsistent with the Department’s own long-standing recognition of the assessee’s charitable status. Once the assessee had produced documents capable of evidencing its creation and continuous existence, it was incumbent upon the learned CIT(E) to examine whether those documents, together with the undisputed history of the institution and its charitable activities, enabled him to arrive at the satisfaction contemplated under section 12AB. The enquiry could not have been terminated at the threshold merely because the assessee was not constituted under a formal written instrument. Consequently, we are unable to sustain the reasoning adopted in the impugned order rejecting renewal of registration under section 12AB. The inevitable consequence of this conclusion, and its effect upon the rejection of approval under section 80G, now falls for our consideration.

27. In view of the foregoing discussion, we are of the considered opinion that the learned CIT(E) has adopted an unduly narrow and hyper-technical approach while examining the assessee’s application for renewal of registration under section 12AB. The statutory enquiry contemplated under the Act is intended to ascertain whether the institution exists for charitable purposes, whether its activities are genuine and whether it complies with such other laws as are material for achieving its stated objects. The impugned order, however, proceeds almost entirely on the absence of a formal trust deed and, in the process, loses sight of the overwhelming documentary material placed on record evidencing the assessee’s existence and charitable character. It is not in dispute that the assessee has been imparting education since the year 1966; that it is registered as a public trust under the Maharashtra Public Trusts Act; that it has remained recognised by the educational authorities of the State; that it has enjoyed registration under the Income-tax Act for several decades; and that even under the new registration regime it had been granted registration under section 12AB. None of these foundational facts has been disputed by the learned CIT(E). Equally, there is no allegation that the assessee has deviated from its educational objects, that its activities are not genuine, or that it has violated any law material to the attainment of its charitable purposes. Once these aspects remain undisputed, the enquiry ought to have been directed towards examining whether the documents produced by the assessee sufficiently established its creation and existence within the meaning of Rule 17A(2)(b), instead of treating the absence of a written trust deed as conclusive against it.

28. We are also unable to subscribe to the view that the statutory registration granted under the Maharashtra Public Trusts Act and the contemporaneous records produced by the assessee are incapable of constituting documents evidencing the creation or establishment of the trust. Such an interpretation would not only render clause (b) of Rule 17A(2) substantially redundant but would also lead to anomalous consequences whereby institutions admittedly established otherwise than under a written instrument would stand permanently excluded from the benefit of registration, notwithstanding their long-standing charitable existence and statutory recognition under the applicable law. Such a consequence could never have been intended by the Legislature. The interpretation which advances the object of the provision and harmoniously gives effect to every part of Rule 17A deserves acceptance in preference to one which defeats an express statutory provision. We are, therefore, of the considered opinion that the learned CIT(E) committed a legal error in rejecting the assessee’s application solely on the premise that a formal trust deed or Memorandum of Association had not been produced, without objectively examining whether the documents actually furnished satisfied the requirement contemplated under Rule 17A(2)(b).

29. Consequently, the impugned order rejecting the assessee’s application for renewal of registration under section 12AB cannot be sustained and deserves to be set aside. We accordingly direct the learned CIT(E) to grant renewal of registration under section 12AB to the assessee in accordance with law, there being no adverse finding either regarding the charitable objects of the trust, the genuineness of its activities or compliance with any other material statutory requirement. Since the rejection of the application under section 80G has been founded solely upon the rejection of registration under section 12AB and no independent adverse finding has been recorded with respect to the conditions prescribed under section 80G(5), the consequential order refusing approval under section 80G also cannot survive. The learned CIT(E) is, therefore, directed to grant approval under section 80G as well, subject to there being no other statutory impediment, none having been pointed out before us or recorded in the impugned order. Accordingly, both the appeals filed by the assessee stand allowed.

30. In view of the foregoing discussion, we hold that the learned CIT(E) was not justified in rejecting the assessee’s application for renewal of registration under section 12AB merely on the ground that the assessee did not produce a separate trust deed or Memorandum of Association. The approach adopted in the impugned order is contrary to the statutory scheme contained in section 12AB read with Rule 17A of the Income-tax Rules, overlooks the evidentiary value of the documents furnished by the assessee and is inconsistent with the settled legal position governing the scope of enquiry under section 12AB. The impugned order, therefore, cannot be sustained.

31. Accordingly, we set aside the impugned order passed by the learned CIT(E) rejecting the assessee’s application under section 12AB and direct him to grant renewal of registration in accordance with law. Since the rejection of approval under section 80G is purely consequential and no independent adverse finding has been recorded regarding the fulfilment of the conditions prescribed under section 80G(5), the said order is also set aside with a direction to grant approval under section 80G. Consequently, both the appeals filed by the assessee stand allowed.

32. In the result, both the appeals of the assessee are allowed.