Section 12AB – Bombay High Court Holds Irrevocability Clause Not A Precondition For Registration

A writ petition was instituted by the Bombay Chartered Accountants’ Society (BCAS) jointly with the Chamber of Tax Consultants (CTC) and several public charitable trusts, challenging orders passed by the Commissioner of Income-tax (Exemptions) rejecting applications for renewal of registration under section 12AB of the Income-tax Act, 1961, on the ground of absence of an irrevocable clause or a dissolution clause in the trust deed.

The Bombay High Court, in Writ Petition (L) No. 7587 of 2026 (order dated 9 March 2026), has rendered a significant ruling, allowing the petition, and granting relief to many trusts, particularly old and established ones, which did not have such clauses.

BACKGROUND AND CONTROVERSY

Pursuant to the revamped registration regime effective from 1 April 2021, the trusts had applied for renewal of registration under section 12AB by filing Form 10AB. The applications were rejected on the following grounds:

•  the trust deeds did not contain an express clause declaring the trust to be “irrevocable” or providing for dissolution; and
• the applicants had answered “Yes” to the query in Form 10AB regarding existence of irrevocable clause in the trust deed, which was treated as furnishing “false or incorrect information
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