ITAT Mumbai: Non-Existence of Trust Deed Not a Bar to Section 12AB Renewal Registration

Background and Context

Three Mumbai-based churches — Church of Our Lady of Immaculate Conception, Church of Our Lady of Perpetual Succor, and Church of Our Lady of Assumption — approached the Income Tax Appellate Tribunal (ITAT), Mumbai, challenging the rejection of their renewal applications filed under Section 12AB of the Income-tax Act, 1961. The appeals were registered as ITA 5618/MUM/2026, ITA 5675/MUM/2026, and ITA 5716/MUM/2026 respectively, and were adjudicated through a consolidated order dated 25/09/2026, given the near-identical facts and legal issues across all three matters.

The central dispute turned on a straightforward but practically significant question: Can the Commissioner of Income Tax (Exemptions) reject a renewal application under Section 12AB solely because the applicant institution cannot produce a formal trust deed or Memorandum of Association (MOA)? The ITAT answered in the negative, setting aside all three rejection orders and directing grant of renewal.

The Dispute: What Went Wrong Before the CIT(E)

The Applications and the Documentary Requirement

Each of the three churches had filed Form No. 10AB seeking renewal of registration under Section 12AB of the Act. During the processing of these applications, the Commissioner of Income Tax (Exemptions), Mumbai ("CIT(E)"), required the churches to produce documents prescribed under Rule 17A(2) of the Income-tax Rules, 1962, including an instrument evidencing their creation or establishment — essentially a trust deed or MOA.

The Churches' Explanation

The churches responded with a clear and consistent position: no separate written trust deed or MOA had ever been executed at the time of their creation. Accordingly, it was not possible for them to furnish a document that, as a matter of historical fact, had never come into existence.

In place of such an instrument, the churches placed before the CIT(E) the following material:

  • Applications made before the Charity Commissioner
  • Schedule-I registration particulars
  • Registration certificates issued under the Maharashtra Public Trusts Act, 1950
  • Other material relating to their establishment and long-standing functioning

They also submitted that the day-to-day administration and governance of their affairs was conducted in accordance with Canon Law.

The CIT(E)'s Rejection

The CIT(E) was not persuaded. He took the view that the documents furnished by the churches established only their registered status under the Maharashtra Public Trusts Act, 1950 and did not constitute adequate proof of their creation or establishment for the purposes of Rule 17A(2). In the absence of a formal trust instrument or MOA, he concluded that the mandatory documentary requirement under the Rule remained unsatisfied and that the statutory satisfaction contemplated under Section 12AB — regarding the institutions' objects and the genuineness of their activities — could not be arrived at. All three renewal applications were accordingly rejected.

Before the Tribunal, the assessees' counsel argued that the CIT(E) had fundamentally misread Rule 17A(2) of the Income-tax Rules, 1962. The ITAT examined the relevant portion of the Rule, which provides as follows: