Trust Registration u/s 12AB without irrevocable clause: CBDT need to smoothen the process


Trust Registration u/s 12AB without irrevocable clause: CBDT need to smoothen the process



All the trust who are already registered with the income tax department u/s 12 or 12AA have now to apply again u/s 12AB on or before 30/06/2021.

The application has to be done in online mode in Form No. 10A with all the required documents.

The new form NO. 10A now requires the details which were not there in earlier Form No. 10A.

More particularly, new Form No. 10A is asking at Column No. 6 as under:

  1. Whether the trust deed contains clause that the trust is irrevocable?

The reply is required to be given by Ticking “Yes” or “No” option provided therein.

In short, the column 6 is about the revocability of the trust. It requires trust to comment whether the applicant’s trust deed contains a clause that the trust is irrevocable. It may be noted that though this column is made applicable for applicants which are registered as a ‘Trust’ but form is required to be filled by a society, company also. There is no option to select ‘Not Applicable’ or so. Hence, a society or a company shall also be required to select ‘Yes’ or “No” before completing the uploading formalities.

There are lot of trust where irrevocability clause is already there in the trust deed & applicant can simply click yes. It won’t pose any issue in such cases.

However, there are lot of old & new trusts where the “irrevocable clause” is not there?

In such case, the trust won’t have an option but to click “No”. In all such cases, there is likelihood that the registration u/s 12AB may not be approved. In all such cases, the trust would be required to amend the bye-laws so as to add the “irrevocable clause” in the trust deed so as to be eligible for trust registration.

Now, this is going to add another complication for the trust in getting the registration u/s 12AB.

It may be noted that trust by its very nature are irrevocable and absence of this clause doesn’t make the trust as revocable. Adding these unwanted requirements is going to make the compliance and registration difficult and complicated. This will be all the more complicated in view of the prevailing pandemics in the form of Corona and the limited time period available with trust for doing the registration i.e.., till 30/06/2021.

CBDT should specifically allow the approval of Section 12AB registration even if there is no specific irrevocable clause in the trust deed.

If required, the trust may be asked to incorporate the irrevocable clause within a period of next 6 months to 12 months so as to ensure smooth working under such a tough time.


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