The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that an application for registration under Section 12AB of the Income Tax Act cannot be rejected merely because the trust deed is not registered with the Sub-Registrar. 

Setting aside the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], the bench of  Vimal Kumar (Judicial Member) and Ramit Kochar (Accountant Member) remanded the matter for fresh adjudication after directing the tax authority to examine the applicable legal requirements and provide the trust an opportunity to rectify any deficiencies. 

The appeal arose from an order passed by the Commissioner of Income Tax (Exemptions), Delhi, rejecting the charitable trust’s application for registration under Section 12AB(1)(ac)(ii) of the Income Tax Act, 1961. The CIT(E) had concluded that since the trust deed was not registered with the Sub-Registrar, the trust was not eligible for registration under the Act. 

Buy Now: INCOME TAX E-COMPILATION – JUNE 2026

Before the Tribunal, the trust argued that the Income Tax Act does not mandate registration of a trust deed with the Sub-Registrar as a pre-condition for obtaining registration under Section 12AB. It relied upon earlier judicial precedents, including the decisions in Malli Ram Charitable Trust v. CIT and Sacred Heart Church v. CIT(E), which held that registration cannot be denied merely because a trust deed has not been registered with the Registrar of Documents or the Registrar of Societies. 

The ITAT examined the legal position and found that the issue had already been addressed in earlier judicial pronouncements. It noted that the Cochin Bench of the Tribunal, in Sacred Heart Church v. CIT(E), had categorically held that there is no requirement under the Income Tax Act that an institution established for charitable purposes must necessarily have a registered trust deed in order to qualify for registration.

The Tribunal also referred to the Allahabad High Court’s decision in CIT v. Krishi Utpadan Mandi Samiti, which clarified that the Act does not require an institution advancing an object of general public utility to be constituted through a registered trust. Further, the Amritsar Bench’s ruling in Malli Ram Charitable Trust v. CIT had similarly held that non-registration of the trust deed with the Registrar of Documents or Registrar of Societies cannot by itself justify rejection of a registration application. 

While disagreeing with the basis adopted by the CIT(E), the Tribunal observed that certain other legal aspects still required examination. It directed the Commissioner to consider whether any registration requirements arose in relation to the trust’s immovable property under the Indian Trusts Act, 1882, including the implications of Section 13, and whether registration with the appropriate Charity Commissioner was legally necessary.

The Tribunal emphasized that if any shortcomings or procedural defects existed, the trust must first be afforded an adequate opportunity to rectify them before any adverse decision is taken. Only thereafter should the application be decided afresh in accordance with law after granting a fair hearing. 

Allowing the appeal for statistical purposes, the ITAT set aside the order of the CIT(E) and restored the matter for fresh consideration. 

The Tribunal held that rejection of a registration application solely because the trust deed was not registered with the Sub-Registrar was prima facie unsustainable, and directed the tax authority to reconsider the application after examining the correct legal requirements and following principles of natural justice. 

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: Political Donations to Non-Compliant Parties Not Eligible for S. 80GGC Deduction: ITAT