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IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCH “A”, MUMBAI

BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER

AND

SHRI ANIKESH BANERJEE, JUDICIAL MEMBER

ITA No.1026/Mum/2026

(Assessment Year: N.A.)

Shree Saralal Nagarseth vs Commissioner of Income

Charitable Trust Tax (Exemptions), Mumbai

8/8, Reti Bunder, Daru Room No. 601, 6th Floor,

Khanan, Reay Road, Cumballa Hill, MTNL

Mumbai – 400010. Building, Pedder Road,

Mumbai - 400026.

PAN: AACTS0766M

APPELLANT RESPONDENT

Assessee by : Shri Parth Shah, CA

Revenue by : Shri Rajesh Kumar Yadav (CIT-DR)

Date of hearing : 20/04/2026

Date of pronouncement : 23/04/2026

O R D E R

Per: Anikesh Banerjee (JM):

The instant appeal of the assessee filed against the order of

the Ld. Commissioner of Income Tax (Exemptions), Mumbai [for

brevity “the Ld. CIT(E)”], order passed under section 12A of the

ITA No.1026/Mum/2026

Shree Saralal Nagarseth Charitable Trust

Income Tax Act, 1961 (for brevity “the Act”), the date of order

26.12.2025.

2. The assessee filed an application in form no. 10AB u/s.

12A(1)(ac)(iii) of the Act, seeking regularization of provisional

registration u/s. 12AB of the Act. During the processing of

registration, the Ld. CIT(E) found that the assessee had not

inserted any clause related irrevocable or dissolution or winding

up clause in trust deed or MOA. It is further observed that the

trust is holding objects as the trust intends to apply / receive

funds outside India. The clause related to the application/

receiving the foreign fund is gross violation of Section 11 of the

Act. Accordingly, the said registration was duly cancelled. Being

aggrieved, the assessee filed an appeal before us.

3. The Ld. AR argued and filed paperbook comprising pages 1 to

56 which has been placed on record. The Ld. AR contended that the

assessee had already amended the scheme and filed before the

Charity Commissioner. The relevant acknowledgement dated

05.03.2026 filed before the Charity Commissioner is annexed in

APB page 39. Considering this, the Ld. AR respectfully submitted

that the Hon'ble Bombay High Court had dealt this issue in case of

the Chamber of Tax Consultants & Anr. vs CIT(E) Writ Petition

(L) No.7587 of 2026 date of order 09.03.2026. The relevant

observations of the lordship in para no.45 and 46 are reproduced

as below:

2

ITA No.1026/Mum/2026

Shree Saralal Nagarseth Charitable Trust

“45-In summary, we hold that a public charitable trust is deemed irrevocable by

operation of law unless the instrument of trust expressly provides a power of

revocation. The absence of an explicit irrevocability clause is not a ground for

rejecting an application for registration or renewal under section 12AB of the Act.

Even if the Deed provides for any revocability clause, due to operation of sections

22(3A) and 22(3B) of the MPT Act, such trusts which are registered under the

MPT Act, would be irrevocable insofar as the Income-tax Act is concerned but we

leave this issue open to be decided in an appropriate case. The action of

Respondent No. 1 is therefore, contrary to the plain language of the statute,

binding judicial precedents of this Court, and is manifestly arbitrary. Such

action, as rightly pointed out by the Petitioners, have shaken the entire

ecosystem of functioning of the charitable trusts. It cannot be forgotten that the

trusts are contributing to nation building by doing charitable activities and that

too voluntarily and, thus, must be treated with a fair and reasonable approach

by the revenue.

46. In the result, the Writ Petition is allowed. Due to the peculiar facts, as

presented by the Petitioners, we pass the following order:

(i) The Respondents shall refrain from rejecting applications for

registration/renewal under section 12AB solely on the ground of the absence

of an explicit irrevocability and/or dissolution clause in the Trust

Deed/instrument.

(ii) The Respondents shall not treat the answer "Yes" to Row 6 of Form 10AB,

in the absence of any explicit clause of irrevocability, as furnishing "false or

inco incorrect information"