The CIT (Exemptions) refused our trust's registration under s.12AB because the trust deed has no irrevocability or dissolution clause, and treated our 'Yes' in Row 6 of Form 10AB as false information. Is that a lawful ground of refusal?
No, on both counts. Section 12AB tells the Commissioner what to satisfy himself about — the objects, the genuineness of the activities, and compliance with other laws material to achieving the objects — and an express irrevocability clause is not among them and cannot be implied. A public charitable trust is irrevocable by operation of law unless the deed itself reserves a power of revocation. And an answer the Department's own e-filing utility compelled the applicant to give cannot be turned against it as 'false or incorrect information'. The Bombay High Court quashed the rejections before it and also quashed every other order rejecting renewal on the same grounds.
Decided by the High Court (B.P. Colabawalla J and Firdosh P. Pooniwalla J) on 2026-03-09, reported as 2026:BHC-OS:6814-DB; Writ Petition (L) No. 7587 of 2026 (Bombay High Court). It bears on section 12AB, section 12A, section 80G, section 63 of the Income Tax Act 1961, in Charitable Trusts & Exemption matters.
These rejections went out at scale during the re-registration cycle, and the consequence was not just loss of s.12AB but automatic loss of s.80G approval as well. The judgment removes the ground entirely, orders the form to be corrected, and — importantly — quashes the orders of trusts who were not petitioners, so a trust that never went to court can rely on it.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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Eight petitioners moved the Bombay High Court together — the Chamber of Tax Consultants and the Bombay Chartered Accountants' Society as professional bodies, and six registered public charitable trusts (Mahesh J. Parikh Charitable Trust, Dadar Bhagini Samaj, Dr. Y N Ajinkya East Bombay Lion's Hospital Society Trust, Dilasa Medical Trust and Rehabilitation Centre, Gaud Brahman Samaj, and Gavankar Education Trust Saraswati High School Yeshwant Sadan). The CIT (Exemptions) had rejected their applications for registration or renewal of registration under s.12AB on two grounds: that the trust deeds contained no express clause stating the trust to be irrevocable, and that by answering 'Yes' to Row 6 of Form 10AB — 'Whether the trust deed contains clause that the trust is irrevocable?' — the trusts had furnished false or incorrect information. It was not disputed that the e-filing utility would not accept the form unless 'Yes' was entered. Rejection of s.12AB carried with it rejection of s.80G approval.
The petition was allowed. Section 12AB confines the Commissioner's satisfaction to the objects of the trust, the genuineness of its activities and compliance with other material laws, and contains no requirement of an express irrevocability clause, which cannot be implied either (para 11). Under s.63 a transfer is revocable only where the instrument positively provides for re-transfer or reserves a power to reassume control; the mere absence of an irrevocability clause does not make a trust revocable (para 13). The Court summarised its conclusion at paragraph 45: a public charitable trust is deemed irrevocable by operation of law unless the instrument expressly provides a power of revocation, and the absence of an explicit irrevocability clause is not a ground for rejecting an application for registration or renewal under s.12AB. The further proposition that, by reason of ss.22(3A) and 22(3B) of the Maharashtra Public Trusts Act 1950, a trust registered under that Act would be irrevocable so far as the Income-tax Act is concerned even where its deed does contain a revocability clause was not decided: the Court expressly left that issue open to be decided in an appropriate case (para 45), and the discussion of the Maharashtra Act at paragraph 18 goes no further than supporting the main conclusion. Penalising an assessee for a situation created by a utility the Department itself designed was held to violate all legal principles (para 44 and following). By paragraph 46 the Court quashed the petitioners' rejection orders, quashed all other orders rejecting renewal of registration under s.12AB on the grounds it had discussed (46(vi)) and the consequential s.80G rejections (46(vii)), directed Row 6 of the form and the utility to be corrected, and directed fresh orders within six weeks, any order so passed being deemed to come into effect from 1 April 2026 (46(viii)).
The Court began with the text of s.12AB and found the conditions for registration to be exhaustive of what the Commissioner may be satisfied about (para 11). It then read s.63 of the Act, which defines when a transfer is revocable, and held that revocability requires a positive provision in the instrument, not silence (para 13). It drew on Controller of Estate Duty, Vidarbha v. Smt. Mangala for the proposition that once a charitable dedication is complete no power of revocation remains with the settlor (para 14, a passage quoted from that judgment and therefore not quoted here as the Court's own words), and on ss.22(3A) and (3B) of the Maharashtra Public Trusts Act 1950, under which the assets of a revoked trust are sold and the proceeds paid into the Public Trusts Administration Fund rather than returning to the settlor (para 18) — though how far that renders irrevocable a trust whose deed does reserve a power of revocation was left open at paragraph 45. Its own earlier decision in CIT v. Tara Educational and Charitable Trust was applied for the proposition that the absence of a dissolution clause is no impediment to the operation of the statute (para 32). On the second ground, the Court recorded that applicants were compelled to answer 'Yes' to Row 6 to upload the form at all (para 44), and held that treating that compelled answer as false information was impermissible.
At the outset, a plain reading of section 12AB of the Act reveals that the conditions for grant of registration are an objective satisfaction on the part of the Principal Commissioner regarding (i) the objects of the trust, (ii) the genuineness of its activities, and (iii) compliance with other material laws. The section does not contain any condition that the trust deed must have an explicit clause stating that it is irrevocable before registration is granted, and in our view, such a condition cannot be implied also.
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Handle my notice → Ask a CA on WhatsAppNo, on both counts. Section 12AB tells the Commissioner what to satisfy himself about — the objects, the genuineness of the activities, and compliance with other laws material to achieving the objects — and an express irrevocability clause is not among them and cannot be implied. A public charitable trust is irrevocable by operation of law unless the deed itself reserves a power of revocation. And an answer the Department's own e-filing utility compelled the applicant to give cannot be turned against it as 'false or incorrect information'. The Bombay High Court quashed the rejections before it and also quashed every other order rejecting renewal on the same grounds. This was decided by the High Court (B.P. Colabawalla J and Firdosh P. Pooniwalla J) and bears on section 12AB, section 12A, section 80G, section 63 of the Income Tax Act 1961. It is reported as 2026:BHC-OS:6814-DB; Writ Petition (L) No. 7587 of 2026 (Bombay High Court). These rejections went out at scale during the re-registration cycle, and the consequence was not just loss of s.12AB but automatic loss of s.80G approval as well. The judgment removes the ground entirely, orders the form to be corrected, and — importantly — quashes the orders of trusts who were not petitioners, so a trust that never went to court can rely on it. If it applies to you, the first step is this: Check whether the rejection order rests on the absence of an irrevocability or dissolution clause, or on the Row 6 answer being called false. If it is a rejection of renewal of registration, paragraph 46(vi) quashes it even though you were not a petitioner; a rejection of a first-time registration application is covered, if at all, only through paragraph 46(viii), which reaches all other similarly situated trusts, so put that point expressly rather than assuming it.
Eight petitioners moved the Bombay High Court together — the Chamber of Tax Consultants and the Bombay Chartered Accountants' Society as professional bodies, and six registered public charitable trusts (Mahesh J. Parikh Charitable Trust, Dadar Bhagini Samaj, Dr. Y N Ajinkya East Bombay Lion's Hospital Society Trust, Dilasa Medical Trust and Rehabilitation Centre, Gaud Brahman Samaj, and Gavankar Education Trust Saraswati High School Yeshwant Sadan). The CIT (Exemptions) had rejected their applications for registration or renewal of registration under s.12AB on two grounds: that the trust deeds contained no express clause stating the trust to be irrevocable, and that by answering 'Yes' to Row 6 of Form 10AB — 'Whether the trust deed contains clause that the trust is irrevocable?' — the trusts had furnished false or incorrect information. It was not disputed that the e-filing utility would not accept the form unless 'Yes' was entered. Rejection of s.12AB carried with it rejection of s.80G approval. The matter was decided on 2026-03-09 by the High Court (B.P. Colabawalla J and Firdosh P. Pooniwalla J). On those facts the High Court held as follows. The petition was allowed. Section 12AB confines the Commissioner's satisfaction to the objects of the trust, the genuineness of its activities and compliance with other material laws, and contains no requirement of an express irrevocability clause, which cannot be implied either (para 11). Under s.63 a transfer is revocable only where the instrument positively provides for re-transfer or reserves a power to reassume control; the mere absence of an irrevocability clause does not make a trust revocable (para 13). The Court summarised its conclusion at paragraph 45: a public charitable trust is deemed irrevocable by operation of law unless the instrument expressly provides a power of revocation, and the absence of an explicit irrevocability clause is not a ground for rejecting an application for registration or renewal under s.12AB. The further proposition that, by reason of ss.22(3A) and 22(3B) of the Maharashtra Public Trusts Act 1950, a trust registered under that Act would be irrevocable so far as the Income-tax Act is concerned even where its deed does contain a revocability clause was not decided: the Court expressly left that issue open to be decided in an appropriate case (para 45), and the discussion of the Maharashtra Act at paragraph 18 goes no further than supporting the main conclusion. Penalising an assessee for a situation created by a utility the Department itself designed was held to violate all legal principles (para 44 and following). By paragraph 46 the Court quashed the petitioners' rejection orders, quashed all other orders rejecting renewal of registration under s.12AB on the grounds it had discussed (46(vi)) and the consequential s.80G rejections (46(vii)), directed Row 6 of the form and the utility to be corrected, and directed fresh orders within six weeks, any order so passed being deemed to come into effect from 1 April 2026 (46(viii)).
The Court began with the text of s.12AB and found the conditions for registration to be exhaustive of what the Commissioner may be satisfied about (para 11). It then read s.63 of the Act, which defines when a transfer is revocable, and held that revocability requires a positive provision in the instrument, not silence (para 13). It drew on Controller of Estate Duty, Vidarbha v. Smt. Mangala for the proposition that once a charitable dedication is complete no power of revocation remains with the settlor (para 14, a passage quoted from that judgment and therefore not quoted here as the Court's own words), and on ss.22(3A) and (3B) of the Maharashtra Public Trusts Act 1950, under which the assets of a revoked trust are sold and the proceeds paid into the Public Trusts Administration Fund rather than returning to the settlor (para 18) — though how far that renders irrevocable a trust whose deed does reserve a power of revocation was left open at paragraph 45. Its own earlier decision in CIT v. Tara Educational and Charitable Trust was applied for the proposition that the absence of a dissolution clause is no impediment to the operation of the statute (para 32). On the second ground, the Court recorded that applicants were compelled to answer 'Yes' to Row 6 to upload the form at all (para 44), and held that treating that compelled answer as false information was impermissible. In the words reproduced by the source cited on this page: "At the outset, a plain reading of section 12AB of the Act reveals that the conditions for grant of registration are an objective satisfaction on the part of the Principal Commissioner regarding (i) the objects of the trust, (ii) the genuineness of its activities, and (iii) compliance with other material laws. The section does not contain any condition that the trust deed must have an explicit clause stating that it is irrevocable before registration is granted, and in our view, such a condition cannot be implied also." The decision followed or applied CIT v. Tara Educational and Charitable Trust (Bombay High Court) — applied; Controller of Estate Duty, Vidarbha v. Smt. Mangala (1983) 143 ITR 491 — relied upon.
It was decided by the High Court on 2026-03-09 and is reported as 2026:BHC-OS:6814-DB; Writ Petition (L) No. 7587 of 2026 (Bombay High Court). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 12AB, section 12A, section 80G, section 63, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The petition was allowed. Section 12AB confines the Commissioner's satisfaction to the objects of the trust, the genuineness of its activities and compliance with other material laws, and contains no requirement of an express irrevocability clause, which cannot be implied either (para 11). Under s.63 a transfer is revocable only where the instrument positively provides for re-transfer or reserves a power to reassume control; the mere absence of an irrevocability clause does not make a trust revocable (para 13). The Court summarised its conclusion at paragraph 45: a public charitable trust is deemed irrevocable by operation of law unless the instrument expressly provides a power of revocation, and the absence of an explicit irrevocability clause is not a ground for rejecting an application for registration or renewal under s.12AB. The further proposition that, by reason of ss.22(3A) and 22(3B) of the Maharashtra Public Trusts Act 1950, a trust registered under that Act would be irrevocable so far as the Income-tax Act is concerned even where its deed does contain a revocability clause was not decided: the Court expressly left that issue open to be decided in an appropriate case (para 45), and the discussion of the Maharashtra Act at paragraph 18 goes no further than supporting the main conclusion. Penalising an assessee for a situation created by a utility the Department itself designed was held to violate all legal principles (para 44 and following). By paragraph 46 the Court quashed the petitioners' rejection orders, quashed all other orders rejecting renewal of registration under s.12AB on the grounds it had discussed (46(vi)) and the consequential s.80G rejections (46(vii)), directed Row 6 of the form and the utility to be corrected, and directed fresh orders within six weeks, any order so passed being deemed to come into effect from 1 April 2026 (46(viii)). It arises in Charitable Trusts & Exemption matters, on section 12AB, section 12A, section 80G, section 63 of the Income Tax Act 1961, and was decided by B.P. Colabawalla J and Firdosh P. Pooniwalla J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Write to the CIT (Exemptions) enclosing the judgment and asking that the application be decided afresh within the six weeks the Court allowed, and that any consequential s.80G rejection be recalled with it. Ask also for the back-dating the Court directed: any order so passed is deemed to come into effect from 1 April 2026 (para 46(viii)). Do not amend the trust deed to insert an irrevocability clause merely to satisfy the objection — the Court has held it is not required, and an amendment can raise its own questions under s.12A(1)(ac). If an appeal to the Tribunal against the same rejection is already pending, keep it alive until fresh orders are actually passed; the High Court's direction is to decide afresh, not to grant registration. Where the trust is outside Maharashtra, note that part of the reasoning rests on the Maharashtra Public Trusts Act 1950; the s.63 reasoning and the reading of s.12AB, however, are not State-specific.
Still good law. Decided 9 March 2026; no appellate decision was located, and no special leave petition, its number or any order on it could be traced, so the entry is not recorded as under appeal. A report of 3 June 2026 quotes a senior Income Tax official saying that the Department is in the process of filing a special leave petition and is not ready to accept the High Court's order, and records that the petitioner trusts' registrations have been renewed expressly subject to the outcome of that petition — so a renewal obtained in reliance on this judgment may itself be granted conditionally, and the point should be checked on the order. There is also evidence of the judgment being given effect: a later Tribunal matter was dismissed as infructuous after the CIT (Exemptions) granted registration to a trust that had been refused on the irrevocability ground. Being a Bombay High Court judgment it binds authorities within that jurisdiction; the reasoning on s.12AB and s.63 is general, while the reasoning drawn from ss.22(3A) and (3B) of the Maharashtra Public Trusts Act 1950 is State-specific and was in any event left open at paragraph 45. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read on Indian Kanoon. Paragraphs 11, 44, 45 and the directions in paragraph 46 were retrieved word for word; paragraphs 13, 14, 18 and 32 were read in summary only, and paragraphs 14 and 32 contain block extracts from other judgments and from the Maharashtra Public Trusts Act, so nothing from them is quoted here. The petition number is recorded on the judgment page, and in the itatonline digest, as Writ Petition (L) No. 7587 of 2026. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The petition was allowed. Section 12AB confines the Commissioner's satisfaction to the objects of the trust, the genuineness of its activities and compliance with other material laws, and contains no requirement of an express irrevocability clause, which cannot be implied either (para 11). Under s.63 a transfer is revocable only where the instrument positively provides for re-transfer or reserves a power to reassume control; the mere absence of an irrevocability clause does not make a trust revocable (para 13). The Court summarised its conclusion at paragraph 45: a public charitable trust is deemed irrevocable by operation of law unless the instrument expressly provides a power of revocation, and the absence of an explicit irrevocability clause is not a ground for rejecting an application for registration or renewal under s.12AB. The further proposition that, by reason of ss.22(3A) and 22(3B) of the Maharashtra Public Trusts Act 1950, a trust registered under that Act would be irrevocable so far as the Income-tax Act is concerned even where its deed does contain a revocability clause was not decided: the Court expressly left that issue open to be decided in an appropriate case (para 45), and the discussion of the Maharashtra Act at paragraph 18 goes no further than supporting the main conclusion. Penalising an assessee for a situation created by a utility the Department itself designed was held to violate all legal principles (para 44 and following). By paragraph 46 the Court quashed the petitioners' rejection orders, quashed all other orders rejecting renewal of registration under s.12AB on the grounds it had discussed (46(vi)) and the consequential s.80G rejections (46(vii)), directed Row 6 of the form and the utility to be corrected, and directed fresh orders within six weeks, any order so passed being deemed to come into effect from 1 April 2026 (46(viii)).
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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The department accepted your position for years and has now reversed it. Can it?