SHREE CUTCHI DASA OSWAL JAIN SHIKSHAN PRASARAK SAMITI TRUST,MUMBAI vs. COMMISSIONER OF INCOME TAX EXEMPTIONS, MUMBAI

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ITA 6579/MUM/2026Status: DisposedITAT Mumbai09 September 20265 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(E) has no power to impose such conditional registration/approval, as it is not contemplated by the Act. The conditions were set aside, and the registration/approval were granted without them.

What were the facts?

The assessee trust applied for registration under Section 12AB and approval under Section 80G. The CIT(E) granted these, but subject to the outcome of a Supreme Court decision, citing a lack of explicit irrevocability clause in the trust deed.

What were the issues?

Whether the CIT(E) can impose conditional registration/approval under Sections 12AB and 80G pending a higher judicial pronouncement.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI SANJAY GARG & SHRI JAGADISH

आदेश / ORDER

Per Sanjay Garg, Judicial Member:

The captioned appeals have been preferred by the assessee against the separate orders of the Ld. Commissioner of Income Tax (Exemptions) / NFAC (in short, “the Ld. CIT(E)”), pertaining to the applications filed by the assessee for registration under Sections 12AB and approval u/s 80G of the Income-tax Act, 1961 (in short, “the Act”), respectively.

SHREE CUTCHI DASA OSWAL JAIN SHIKSHAN PRASARAK SAMITI TRUST

2.

The assessee is a charitable trust and had filed applications seeking registration under Section 12AB and approval under Section 80G of the Act, respectively. The Ld. CIT(E) granted the requisite registration under Section 12AB as well as approval under Section 80G of the Act. Subject to the following condition:

“the applicant Trust, doner entities and other stakeholders are heby informed, by way of abundant caution, that the applicability and consequential tax-benefits of this registration / approval w.e.f 01.04.2026 onwards, remain subject to outcome of the decision of Hon’ble Supreme Court”

3.

It is pertinent to mention here that the Ld. CIT(E) noted that the instrument of trust did not contain any explicit clause affirming that the transfer of the property under the trust was irrevocable for all times. He observed that Section 332(2)(b) of the Act, 2025, inter alia, lays down that a public trust is eligible for registration, only if the trust properties are held for the benefit of the general public under an irrevocable trust. He therefore observed that the eligibility conditions prescribed in the statute for registration / approval are not satisfied. He however further noticed that Hon’ble Bombay High Court in the Writ Petition(L) No. 7587 of 2026 in the case of the “Chamber of Tax Consultants & Ors Vs. The Ld. CIT(E)” has held that a public charitable trust is a deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation and directed the Department to refrain from rejecting applications from registration / renewal u/s 12AB / 80G solely on the ground of the absence of an explicit irrevocability clause in the Trust Deed /instrument. He further observed that since revenue was preferring to move a special leave petition before the Hon’ble Supreme Court against the said order of the Hon’ble Bombay High Court. He therefore in the background of these facts, granted conditional registration / approval to the assessee to the effect that the same will be subject to outcome of the decision of Hon’ble Supreme Court.

4.

The Ld. Counsel for the assessee submitted that the aforesaid issue relating to the imposition of conditional registration/approval has already been considered by the Coordinate Bench of the Tribunal in another set of appeals in the case of “ILLA Rajesh Foundation v. CIT (Exemption), Mumbai”, in ITA Nos. 4489 to 4491/Mum./2026 &

SHREE CUTCHI DASA OSWAL JAIN SHIKSHAN PRASARAK SAMITI TRUST

Others, order dated 15.05.2026. The Coordinate Bench, in identical facts and circumstances, held that the imposition of such conditions was not justified and accordingly set aside the said conditions. The relevant portion of the order of the Coordinate Bench, referred to supra, is reproduced hereunder:

“8 We heard the rival submissions and perused the material available on record. The primary issue involved in ITA No.4489/Mum/2026 and ITA No.4490/Mum/2026 relates to the legality and validity of the conditional registration/approval granted by the Ld. CIT(E) under section 12AB and section 80G of the Act respectively. The conditions imposed by the Ld. CIT(E) substantially provide that though the registration/approval is being granted pursuant to the judgment of the Hon'ble Bombay High Court in the case of Chamber of Tax Consultants vs. Commissioner of Income Tax (Exemption), (supra) the consequential benefits shall remain subject to the outcome of the proposed Special Leave Petition before the Hon'ble Supreme Court. On careful consideration of the statutory provisions and the judicial precedents relied upon before us, we find considerable force in the submissions advanced by the Ld. AR. The scheme of section 12AB of the Act does not confer any express power upon the Ld. CIT(E) to impose independent conditions while granting registration to a charitable trust, except to the extent specifically contemplated under the Act. The power of cancellation or withdrawal of registration is separately provisions of section 12AB(4) and section 12AB(5) of the Act, which empower the authority to cancel the registration upon occurrence of specified violations or non-genuine activities. Therefore, once the assessee satisfies the conditions prescribed under the statute for grant of registration, the Ld. CIT(E) cannot travel beyond the scope of the Act and impose precautionary or contingent conditions based upon a possible future outcome of litigation before a higher judicial forum. We respectfully follow the decision of the Coordinate Bench of ITAT, Mumbai in the case of Chamber of Indian Charitable Trust (supra) wherein it has been categorically held that neither section 12AB nor Rule 17A empowers the Ld. CIT(E) to impose conditions while granting registration. The Coordinate Bench further held that the prescribed Form No.10AC cannot enlarge or expand the scope of the substantive statutory provision enacted by the Legislature. We further find support from the decision of the Coordinate Bench in the case of Bai Navajbai Tata Zoroastrian Girls School (supra) wherein it was held that conditions imposed while granting registration, relating to future conduct of the trust or circumstances for cancellation, are merely advisory in nature and cannot be construed as legally enforceable conditions since the field is already occupied by specific statutory provisions.

9.

In the present case, the registration and approval have admittedly been granted by the Ld. CIT(E). Therefore, once registration under section 12AB and approval under section 80G have been granted, the consequential benefits flowing there from cannot be kept in a suspended or conditional state merely because the revenue proposes to

SHREE CUTCHI DASA OSWAL JAIN SHIKSHAN PRASARAK SAMITI TRUST

challenge the judgment of the Hon'ble Jurisdictional High Court before the Hon'ble Supreme Court. So long as the judgment of the Hon'ble Bombay High Court continues to hold the field, the authorities functioning within the jurisdiction of the Hon'ble Bombay High Court are duty bound to follow the same in letter and spirit.

10.

We also find merit in the submissions of the Ld. AR that the impugned conditions are adversely affecting the day-to-day functioning of the assessee trust and creating uncertainty in relation to its charitable activities, donor confidence and statutory compliances. Such conditions, which are not contemplated under the statute, cannot be permitted to continue. At the same time, we clarify that the registration granted under section 12AB and approval granted under section 80G are not perpetual or lifelong registrations. Under the prevailing statutory scheme, such registrations are granted only for the prescribed period of five years and remain subject to renewal in accordance with law. Therefore, adequate safeguards are already available with the revenue authorities under the Act itself in the event of any future violation, non- genuine activity or any change in the legal position arising from a judicial pronouncement of a higher forum. Hence, imposition of additional contingent conditions by the Ld. CIT(E) was wholly unnecessary and beyond jurisdiction}.

4.

Respectfully following the aforesaid decision of the Coordinate Bench, the condition imposed by the Ld. CIT(E) that the registration/approval granted to the applicant would be subject to the decision of the Hon’ble Supreme Court, if any, on the appeal filed by the Department, if any, in the case of the Chamber of Tax Consultants & Ors, (supra), is hereby set aside. It is ordered that the registration under Section 12AB and approval under Section 80G of the Act granted to the assessee shall be without such conditions, subject to the compliance of the relevant provisions of the Act.

5.

In the result, both the appeals of the assessee are hereby allowed.”

Order pronounced in the open court on 09.09.202

Sd/- Sd/- Jagadish Sanjay Garg ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 09.09.2026 KRK, Sr. PS

SHREE CUTCHI DASA OSWAL JAIN SHIKSHAN PRASARAK SAMITI TRUST

Copy to: SHREE CUTCHI DASA OSWAL JAIN SHIKSHAN PRASARAK SAMITI TRUST, NEW LAXMI NIWAS 1ST FLOOR, CAMA 1 LANE GHATKOPAR (WEST)., MUMBAI-400086, MAHARASHTRA COMMISSIONER OF INCOME TAX EXEMPTIONS, ROOM NO 601 6TH FLOOR CUMBALLA 2 HILL MTNL TE BUILDING PEDDER ROAD DR GOPALRAO DESHMUKH MARG CUMBALLA HILL, MUMBAI-400026, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE

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