Absence of Written Trust Deed Cannot Bar Section 12AB Registration For Valid Charitable Institutions

By | September 23, 2026
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Absence of Written Trust Deed Cannot Bar Section 12AB Registration For Valid Charitable Institutions

Absence of Written Trust Deed Cannot Bar Section 12AB Registration For Valid Charitable Institutions

Issue

Whether the CIT(Exemption) can reject an application for registration or renewal under Section 12AB of the Income-tax Act, 1961 solely due to the non-furnishing of a written trust deed or Memorandum of Association (MOA), when Rule 17A specifically provides for applicants established otherwise than under an instrument.

Facts

  • Assessee Status: The assessee is a religious-cum-charitable institution governed by Canon Law and registered as a public charitable trust under the Maharashtra Public Trusts Act, 1950.
  • Application Filed: The assessee submitted Form No. 10AB seeking renewal of registration under Section 12AB of the Income-tax Act, 1961.
  • Documents Submitted: In response to requisitions under Rule 17A(2), the assessee provided all available details and evidentiary documents regarding its public trust registration and governance, consistently maintaining that it was not established under a separate written trust deed or MOA.
  • Rejection by CIT(E): The CIT(Exemption) held that the production of a written instrument or MOA is mandatory to satisfy the objects and genuineness of activities under Section 12AB(1)(b) read with Rule 17A(2), and accordingly rejected the renewal application.

Decision

  • Dual Framework of Rule 17A: The statutory framework explicitly recognizes under Rule 17A that trusts can be established either under an instrument [clause (a)] or otherwise than under an instrument [clause (b)]. Thus, a formal written trust deed is not mandatory for every applicant.
  • Duty to Examine Evidence: Since the Revenue did not claim that the assessee failed to produce an existing written instrument, the CIT(E) was bound to evaluate the alternative evidentiary material under Rule 17A(2)(b) and (c) establishing its registration and existence.
  • Rejection Unjustified: The CIT(E)’s rejection of the Section 12AB renewal application for mere absence of a written trust deed/MOA was legally unsustainable.
  • Ruling: Decided in favour of the assessee.

Key Takeaways

  • No Mandatory Written Instrument: Section 12AB read with Rule 17A does not make a written trust deed or MOA compulsory for entities created otherwise than by a written instrument.
  • Scope of Evidentiary Review: When an entity is established under personal/canon law or registered under state public trust acts without a specific deed, tax authorities must assess genuine supporting documents under Rule 17A(2)(b) rather than mechanical rejections.
IN THE ITAT MUMBAI BENCH ‘C’
Church of St. Francis Xavier Dabul
v.
Commissioner of Income-tax(Exemption)
Smt. Beena Pillai, Judicial Member
and Jagadish, Accountant Member
IT Appeal No. 6122 (MUM) of 2026
SEPTEMBER  7, 2026
Ms. Sruti Kalyanikar, AR for the Appellant. Ms. Ramapriya Raghavan, CIT DR for the Respondent.
ORDER
Smt. Beena Pillai, Judicial Member.- Present appeal filed by the assessee is directed against the order dated 30/03/2026 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 the application filed by the assessee seeking renewal of registration.
2. The grounds raised by the assessee read as under:
“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 of the case are as under:-
Assessee is a religious-cum-charitable institution which filed an application in Form No. 10AB seeking renewal of its regular registration under the provisions of section 12AB of the Act. During the course of proceedings, the Ld. CIT(E) called upon the assessee to furnish documents prescribed under Rule 17A(2) of the Incometax Rules, 1962 (“the Rules”).
3.1. In response thereto, the assessee furnished the details and supporting documents available with it. The consistent stand of the assessee before the Ld. CIT(E) was that the institution had not been created under a separate written trust deed/Memorandum of Association and, therefore, such instrument was not available for being furnished. It was further explained that the institution was governed by Canon Law and was registered as a public charitable trust under the Maharashtra Public Trusts Act, 1950. The assessee also furnished the available documents evidencing its registration as a public charitable trust.
4. The Ld. CIT(E) was not satisfied with the explanation furnished by the assessee. 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 assessee and genuineness of its 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 application seeking renewal of registration.
4.2. Accordingly, the application filed by the assessee seeking renewal of registration was rejected.
Aggrieved by the aforesaid order, the assessee is in appeal before us.
5. The Ld. AR submitted that the Ld. CIT(E) erred in rejecting the application merely because the assessee did not possess a formal instrument of trust/MOA. It was submitted that Rule 17A(2) itself recognises an institution created or established otherwise than under an instrument and, therefore, absence of a formal written trust deed cannot constitute a ground for rejection of registration.
5.1. The Ld. AR further submitted that the assessee is an old religious and charitable institution and is registered as a public trust under the Maharashtra Public Trusts Act, 1950. It was submitted that the available documents evidencing its 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 impugned order. It was submitted that the Ld. CIT(E) was required to satisfy himself regarding the objects of the assessee and genuineness of its activities before granting renewal u/s 12AB. According to the Ld. DR, in the absence of the foundational documents evidencing its 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 application filed by the assessee seeking renewal of registration u/s 12AB has essentially been rejected on account of its 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 assessee and genuineness of its 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 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 Rule 17A(2)(b) expressly contemplates an institution created otherwise than under an instrument, the Ld. CIT(E) proceeded 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 case, the assessee claims 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 its 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.
6.7. In the present case, it is not the case of the Revenue that the assessee was created or established under a written instrument which it has failed to produce. On the contrary, the consistent explanation of the assessee has been that no separate written trust deed/Memorandum of Association exists and that it is a religious and charitable institution governed in accordance with Canon Law and registered as a public trust under the Maharashtra Public Trusts Act, 1950. The material placed before the Ld. CIT(E) evidencing such registration and existence was therefore required to be examined in accordance with Rule 17A(2)(b) and (c).
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 order does not record any adverse finding regarding the genuineness of the activities carried on by the assessee. The application has ultimately been rejected on account of failure to submit the instrument of creation or establishment or a document evidencing such creation.
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 assessee 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 application filed by the assessee seeking renewal of registration u/s 12AB on the ground adopted in the impugned order. Accordingly, the impugned order passed by the Ld. CIT(E) is set aside.
We accordingly direct the Ld. CIT(E) to grant renewal of registration u/s 12AB to the assessee in accordance with law.
Accordingly, the grounds raised by the assessee stand allowed.
In the result, the appeal filed by the assessee is allowed.