Absence of formal trust deed cannot justify rejecting Section 12AB

Absence of formal trust deed cannot justify rejecting Section 12AB registration for genuine public trust.

Issue

Whether the CIT(Exemptions) was justified in rejecting the assessee’s application in Form No. 10AB for renewal of registration under Section 12AB solely due to the non-production of a formal trust deed or Memorandum of Association, and by placing reliance on the Indian Trusts Act, 1882.

Facts

Institutional Profile: The assessee is a long-established public charitable educational institution administering a recognized and aided primary and secondary school, registered under the Maharashtra Public Trusts Act.
Historical Registration: The institution held registration under Section 12A for several decades and was subsequently granted registration under Section 12AB under the substituted tax regime.
Renewal Application: Upon the expiry of the covered period, the assessee filed Form No. 10AB under Section 12A(1)(ac)(ii) seeking renewal of its regular registration.
Rejection by CIT(E): The CIT(Exemptions) rejected the application on the ground that the assessee failed to produce a formal trust deed or Memorandum of Association, relying on the provisions of the Indian Trusts Act.
Records Submitted: The assessee had furnished statutory records evidencing its creation, existence, objects, and continuous charitable educational activities.

Decision

Rejection Unsustainable: The rejection of the registration application solely for want of a formal trust deed was held to be unsustainable, as the assessee submitted sufficient statutory records evidencing its creation, existence, objects, and genuine charitable activities. [Paras 9, 10, and 14] [In favour of assessee]
Misplaced Reliance on Indian Trusts Act: The CIT(E)’s reliance on the Indian Trusts Act was held to be misplaced, as the said Act does not apply to public charitable or religious trusts. [Paras 9 and 10] [In favour of assessee]
Direction to Grant Registration: The CIT(Exemptions) was directed to grant the renewal of registration under Section 12AB to the assessee. [Para 14] [In favour of assessee]

KeyTakeaways

Substance Over Form for Registration: Where a public charitable institution produces sufficient statutory evidence establishing its long-standing creation, existence, and genuine charitable activities, registration under Section 12AB cannot be denied merely for the absence of a formal trust deed or Memorandum of Association.
Inapplicability of Indian Trusts Act: The Indian Trusts Act, 1882 applies strictly to private trusts and has no application to public charitable or religious trusts; authorities cannot invoke it to invalidate public trust registrations.
Valid Evidence of Creation: Registration under state public trust legislation (such as the Maharashtra Public Trusts Act) along with official historical records constitutes valid proof of a public trust’s legal existence and objectives for income tax purposes.

IN THE ITAT MUMBAI BENCH ‘F’

St. Josephs High School

CIT (Exemptions)

Amit Shukla, Judicial Member
and MAKARAND VASANT MAHADEOKAR, Accountant Member

IT Appeal No. 6055 (Mum.) of 2026
[Assessment year 2026-27]

SEPTEMBER 2, 2026

Tanzil R. Padvekar for the Appellant. Nishant Samaiya, CIT DR for the Respondent.

ORDER

Amit Shukla, Judicial Member. – The aforesaid appeal has been filed by the assessee against the impugned order dated 29.03.2026 passed by the learned Commissioner of Income-tax (Exemptions), Mumbai, rejecting the assessee’s application in Form No. 10AB seeking renewal of registration under section 12AB of the Income-tax Act, 1961.

2. Brief facts are that the assessee, St. Joseph High School, is an old public charitable educational institution which has been in existence since prior to the enactment of the Bombay Public Trusts Act, 1950. It was subsequently registered under the said Act, now known as the Maharashtra Public Trusts Act, 1950, vide Registration No. D-169 dated 11.10.1955. The assessee has, since its inception, been engaged in imparting education and is administering an English-medium primary and secondary school under the name and style of “St. Joseph High School”. The school is duly recognised by the Education Department, Government of Maharashtra, and receives grant-in-aid from the State Government. It presently has approximately 2,000 students belonging to different communities, and its principal object is to provide education to the public at large without discrimination on the basis of religion, race or language.

3. The assessee was granted registration under section 12A of the Act vide Registration No. INS/911 dated 07.08.1975 and has enjoyed registration and exemption under the Act for several decades. Under the substituted registration regime brought into effect from 01.04.2021, it was granted registration under section 12AB in Form No. 10AC dated 28.05.2021. Upon expiry of the period covered by the said registration, the assessee filed the present application in Form No. 10AB on 07.08.2025 under section 12A(1)(ac)(ii), seeking renewal of its regular registration.

4. During the course of proceedings, the learned CIT(E), vide notice dated 14.11.2025, required the assessee to furnish, inter alia, a self-certified copy of the instrument of trust or Memorandum of Association. In response thereto, the assessee furnished its reply dated 24.11.2025 along with the application made before the Charity Commissioner, the certificate of registration issued under the Bombay Public Trusts Act, its registration under the Income-tax Act, the recognition granted by the Education Department and other documents evidencing its creation, continued existence, objects and educational activities. The assessee specifically explained that it had not been created under a separate written trust deed or Memorandum of Association and, therefore, no such instrument was available.

5. The learned CIT(E), however, held that the application submitted before the Charity Commissioner and the certificate of registration merely evidenced the registration of the public trust and did not constitute an instrument or document evidencing its creation or establishment. He further observed that the assessee had neither furnished a formal trust deed or Memorandum of Association nor any scheme for its management and administration settled by the Charity Commissioner or a competent Court. According to him, in the absence of such a constitutive instrument, it was not possible to examine the objects of the assessee, its intended beneficiaries, the framework governing its administration and whether its activities were being carried on in furtherance of its stated objects. On this reasoning, he concluded that the assessee had failed to comply with the mandatory requirements of section 12AB(1)(b) read with Rule 17A(2) of the Income-tax Rules, 1962, and accordingly rejected the application.

6. Before us, the learned counsel submitted that the assessee is a long-established public charitable educational institution which has been continuously imparting education for several decades. It stands registered under the Maharashtra Public Trusts Act since 11.10.1955, was granted registration under section 12A as far back as on 07.08.1975 and was thereafter granted registration under section 12AB in Form No. 10AC dated 28.05.2021. The school is recognised and aided by the Education Department and presently imparts education to approximately 2,000 students belonging to all communities. It was thus submitted that the creation, establishment and continued existence of the assessee, as well as the genuineness of its educational activities, stood fully established from contemporaneous statutory records and other documentary evidence. Reliance was placed upon the decisions of the Coordinate Bench in St. Joseph’s High School v. CIT(E) [IT Appeal Nos. 5646 and 5849 (Mum) of 2026, dated 5-8-2026], and School of St. John the Evangelist v. CIT(E) [IT Appeal Nos. 5630 and 5822 (Mum) of 2026, dated 5-8-2026], both pronounced on 05.08.2026. The learned DR, on the other hand, relied upon the reasoning given in the impugned order.

7. We have heard the parties and perused the material placed on record. The application for renewal has been rejected essentially for the reason that the assessee could not produce a formal instrument of trust or Memorandum of Association. It is, however, not in dispute that the assessee has been registered as a public charitable trust under the Maharashtra Public Trusts Act since 11.10.1955, has enjoyed registration under section 12A since 07.08.1975 and was granted registration under the substituted regime in Form No. 10AC dated 28.05.2021. It is also an admitted fact that the assessee is administering a primary and secondary school duly recognised by the Education Department and receiving grantin-aid from the State Government. Significantly, the impugned order does not record any adverse finding regarding the charitable nature of its objects, the genuineness of its educational activities, or any non-compliance with another law material for achieving its objects.

8. Rule 17A(2) draws a clear distinction between an applicant created or established “under an instrument” and an applicant created or established “otherwise than under an instrument”. While clause (a) requires the former to furnish a self-certified copy of the instrument creating or establishing it, clause (b) permits the latter to furnish a self-certified copy of the document evidencing its creation or establishment. Thus, the statutory framework expressly recognises that a charitable institution may validly come into existence otherwise than through a formal written instrument. If the production of a formal trust deed were to be regarded as indispensable in every case, clause (b) of Rule 17A(2) would be rendered otiose. In a case where the applicant was established otherwise than under an instrument, the competent authority is required to examine the alternative documents evidencing its creation, establishment and continued existence and cannot reject the application merely because a formal written instrument, which never existed, has not been produced.

9. The application made before the Charity Commissioner, the certificate of registration and the entries maintained by the competent authority under the Maharashtra Public Trusts Act cannot be regarded as documents merely evidencing the factum of registration. Registration under the said Act follows a statutory process under which the competent authority examines, inter alia, the existence and public character of the trust, its objects, trustees, mode of succession and trust property. Such statutory records, therefore, constitute substantive and relevant evidence of the creation, establishment and continued existence of an applicant for the purposes of Rule 17A(2)(b). In the present case, these statutory records stand further corroborated by the assessee’s registration under section 12A since 1975, its subsequent registration under section 12AB, the recognition granted by the Education Department and its uninterrupted activity of imparting education for several decades.

10. The reliance placed by the learned CIT(E) upon sections 3 and 5 of the Indian Trusts Act, 1882, is also misplaced. Section 1 of the said Act expressly provides that nothing contained therein applies to public or private religious or charitable endowments. The assessee before us is admittedly a public charitable educational institution registered under the Maharashtra Public Trusts Act, and its creation, existence and administration are required to be examined in the context of the law governing public trusts and the documentary requirements prescribed under Rule 17A. The requirements applicable to private trusts under section 5 of the Indian Trusts Act cannot be imported into section 12AB so as to insist upon a formal written instrument even where Rule 17A(2)(b) expressly recognises an institution created or established otherwise than under an instrument. Indeed, the learned CIT(E) has himself observed that the Indian Trusts Act applies to private trusts. Having so observed, its provisions could not have been employed to impose an additional condition upon the present public charitable institution.

11. This issue is directly covered by the decision of the Coordinate Bench in St. Joseph’s High School (supra), wherein it was held that the absence of a formal trust deed or Memorandum of Association cannot, by itself, constitute a valid ground for rejecting an application under section 12AB where the institution was established otherwise than under an instrument and had furnished cogent statutory and documentary evidence of its creation, continued existence, objects and activities. It was further held that registration under the Maharashtra Public Trusts Act and the records maintained by the Charity Commissioner constitute relevant evidentiary material for the purposes of Rule 17A(2)(b).

12. The same principle was followed in School of St. John the Evangelist(supra), involving a long-established public charitable educational institution which was likewise registered under the Maharashtra Public Trusts Act, had enjoyed registration under the Income-tax Act for several decades and was carrying on the charitable activity of imparting education. In that case, after examining section 12AB, Rule 17A and the relevant provisions governing public trusts, the Tribunal held that renewal could not be denied solely because the institution had not been constituted under a formal written trust deed or Memorandum of Association. The material facts of the present case are substantially identical, and no distinguishing factual or legal feature has been brought to our notice.

13. We may also observe that the learned CIT(E), in the concluding portion of the impugned order, has himself recorded that the assessee’s existing regular registration would continue to remain valid until Assessment Year 2026-27 and that the rejection was intended to operate as a “gentle reminder” to formulate a suitable instrument defining the functioning of the trust or to obtain a scheme from the Charity Commissioner or a competent Court. This observation itself demonstrates that the rejection was not founded upon any adverse conclusion concerning the assessee’s charitable objects or the genuineness of its educational activities, but was principally intended to secure the formulation of a formal governing instrument. Such an administrative consideration, howsoever desirable it may appear, cannot enlarge the statutory requirements of section 12AB read with Rule 17A(2) or furnish an independent ground for rejecting an otherwise valid application.

14. Accordingly, respectfully following the aforesaid decisions and considering that the assessee is a long-established public charitable educational institution registered under the Maharashtra Public Trusts Act since 11.10.1955, has enjoyed registration under section 12A since 07.08.1975, was granted registration under section 12AB in Form No. 10AC dated 28.05.2021, and has continuously carried on the charitable activity of imparting education through a school duly recognised and aided by the Education Department, we hold that the absence of a formal trust deed or Memorandum of Association, by itself, could not have been treated as a fatal defect. The impugned order dated 29.03.2026 is therefore set aside, and the learned CIT(E) is directed to grant renewal of registration under section 12AB to the assessee in accordance with law. Since the existing registration is stated to be valid only up to Assessment Year 2026-27, the learned CIT(E) shall give effect to this direction expeditiously.

15. In the result, the appeal filed by the assessee is allowed.