VIPASSANA RESEARCH INSTIT UTE,MUMBAI vs. COMMISSIONER OF INCOME TAX EXEMPTIONS, MUMBAI

The grievance of the assessee is confined to the special conditions incorporated by the learned CIT(E) while granting the aforesaid registration and approval. In the order granting registration under section 12AB, condition No. 15 records that the instrument of trust does not contain an explicit clause affirming that the transfer of property under the trust is irrevocable for all times. Reference has thereafter been made to section 332(2)(b) of the Income-tax Act, 2025 and, while noticing the judgment of the Hon’ble jurisdictional Bombay High Court in The Chamber of Tax Consultants & Ors. v. CIT(E), Writ Petition (L) No. 7587 of 2026, reported in [2026] 184 taxmann.com 374 (Bom), the learned CIT(E) has stated that the Revenue proposes to prefer a Special Leave Petition before the Hon’ble Supreme Court. Consequently, although registration has been granted in purported compliance with the judgment of the Hon’ble Bombay High Court, its applicability and the consequential tax benefits with effect from 01.04.2026 have been made subject to the outcome of the proceedings before the Hon’ble Supreme Court. An identical qualification has been incorporated as condition No. 5 in the order granting approval under section 80G(5).

Before us, the learned counsel for the assessee submitted that once the Hon’ble jurisdictional High Court has authoritatively decided the issue, the learned CIT(E) was bound to give complete effect to the judgment and could not render the registration or its consequential benefits contingent upon the outcome of a proposed proceeding before the Hon’ble Supreme Court. It was further submitted that there is neither any order staying the operation of the judgment nor any subsequent decision modifying or reversing the law declared therein. The impugned conditions, therefore, introduce an uncertainty contrary to the binding judicial mandate and materially prejudice the assessee notwithstanding the formal grant of registration and approval.

The learned CIT-DR, on the other hand, relied upon the impugned orders and submitted that registration and approval have, in fact, been granted to the assessee and the impugned conditions merely safeguard the interest of the Revenue in the event of the judgment of the Hon’ble Bombay High Court being interfered with by the Hon’ble Supreme Court.

We have heard the rival submissions and examined the material placed on record. The limited question before us is whether, after granting registration under section 12AB and

Once the Hon’ble jurisdictional High Court has declared the law upon an issue, every authority functioning within its territorial jurisdiction is bound to apply that declaration in its entirety. The binding force of a judgment does not remain in abeyance merely because the aggrieved party proposes to challenge it or has instituted further proceedings. Unless its operation is stayed, or the judgment is reversed or modified by a superior court, it continues to govern the field and must be implemented without reservation. An administrative or quasi-judicial authority cannot, while professing compliance with a binding judgment, append a qualification which effectively postpones, attenuates or renders uncertain the relief flowing from it. The possibility that the Revenue may prefer an SLP, or that such SLP may subsequently be entertained, furnishes no legal basis for curtailing a subsisting statutory benefit. Any consequence arising from a future judgment of the Hon’ble Supreme Court would necessarily be governed by that judgment and the law applicable at the relevant time; an uncertain future eventuality cannot, however, be converted into a present fetter upon registration and approval otherwise validly granted under the existing law.

The statutory scheme, in any event, contains adequate safeguards against misuse. Registration under section 12AB

Accordingly, in ITA No. 6404/Mum/2026, condition No. 15 incorporated in the order granting registration under section 12AB, insofar as it makes the applicability and consequential tax benefits of the registration with effect from 01.04.2026 subject to the outcome of the proceedings proposed to be instituted before the Hon’ble Supreme Court, is legally unsustainable and is hereby expunged. Similarly, in ITA No. 6403/Mum/2026, condition No. 5 incorporated in the order granting approval under section 80G(5), making the approval and its consequential benefits subject to the outcome of the proposed proceedings before the Hon’ble Supreme Court, is also expunged. The learned CIT(E) is directed to issue suitably modified orders/certificates under section 12AB and section

In the result, both the appeals of the assessee are allowed in the terms indicated above.