SHAH PJ KOTHARI AND SHAH MV MODHVANIKBOARDING SCHOOL,DADAR vs. CIT (E) MUMBAI, CUMBALLA HILL

The appellant had filed application for renewal of registration under Section 12AB of the Income Tax Act, 1961 (‘Act’ for short). The appellant happens to be an educational trust registered under the Maharashtra Public Trusts Act, 1950 (erstwhile Bombay Public Trusts Act, 1950).

The learned CIT(E) has considered the application. A perusal of the order passed by learned CIT(E) indicates that the learned CIT(E) found that the instrument of trust does not contain any explicit clause affirming that the transfer of property under trust is an irrevocable transfer.

On behalf of the appellant reliance is placed on the decision of Bombay High Court in Chamber of Tax Consultants vs. Commissioner of Income-tax (Exemptions) [2026] 184 taxmann.com 374 (Bombay) wherein the High Court has, inter alia, held that any public charitable trust is deemed to be irrevocable by operation of law unless the instrument of trust expressly provides power of revocation. Taking note of the said decision, the learned CIT(E) has granted the registration/approval under Section 12AB of the Act. However, the learned CIT(E) has observed that the Revenue is contemplating to challenge the decision of the Bombay High Court before the Supreme Court and in that view of the matter has granted the registration/approval subject to the stipulation that the applicability and consequential tax benefits of the registration/approval w.e.f. 01.04.2026 onwards shall be subject to the outcome of the decision of Supreme Court.

The following para 15 of the order is relevant for the purpose :-

The present appeal is filed by the appellant feeling aggrieved by the stipulation as aforesaid.

We have heard parties. Perused record.

The learned AR has placed reliance on the decision of co-ordinate bench of this Tribunal in Keshavlal Vajechand Kapadia Charity Trust vs. Commissioner of Income-tax (Exemptions), 187 taxmann.com 1010 (Mumbai-Trib.)

It is submitted that this Tribunal has deleted the relevant stipulation as aforesaid relating to the registration/approval subject to the outcome of the Supreme Court decision. It is submitted that the Revenue has not yet challenged the order of the Bombay High Court in the Chamber of Tax Consultants (supra) and, that apart, the order of the jurisdictional High Court holds the field unless set aside or modified by the Supreme Court. It is submitted that notwithstanding the grant of registration/approval, such a stipulation is bound to dissuade the donors and eventually the appellant would not be able to take benefit of the registration/approval in accordance with law. Thus, the stipulation strikes at the root of the grant of the approval/registration.

The learned DR has submitted that the approval is not conditional. Once the approval is granted, there is no reason for the appellant to come up in appeal. The

We have carefully considered the circumstances and the submissions made. It is necessary to note that the registration/approval already stands granted. The appellant seems to be aggrieved only by the stipulation. The registration/approval under Section 12AB of the Act is with the object that the charitable activity of any trust can get donation and, at the same time, the donors are also able to claim the appropriate benefit on account of such donation as admissible in law. Once the learned CIT(E) had allowed the application granting registration/approval, the appellant-trust and the potential donors, if any, should get appropriate benefit as admissible in law. It is trite that any order subsists until it is set aside or varied by a superior forum/court. As noticed earlier, the judgment in the case of Chamber of Tax Consultants (supra) has not even been challenged as yet. In that view of the matter, and placing reliance on the co-ordinate bench order passed in Keshavlal Vajechand Kapadia Charity Trust (supra), we hereby dispose of the present appeal. We direct that the registration/approval granted to the appellant shall operate without any stipulation, restriction or conditional rider. The impugned stipulation stands deleted.

In the result, the appeal is disposed of in the aforesaid terms.