MUMBAI MARATHI GRANTHASANGRAHALAYA,MUMBAI vs. CIT(EXEMPTIONS), MUMBAI, MUMBAI

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ITA 6413/MUM/2026Status: DisposedITAT Mumbai30 September 2026AY 2026-20277 pages
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What did the Tribunal hold?

The Tribunal held that the Ld. CIT(E) was not justified in imposing a condition while granting registration under Section 12AB(1)(b) of the Act. While the Ld. CIT(E) had granted registration, the condition that its applicability and consequential tax benefits would remain subject to the outcome of a Supreme Court decision was found to be beyond the powers conferred by the statute. The Tribunal noted that Section 12AB empowers the Commissioner to either grant or reject registration, but the statute does not contemplate the grant of conditional registration dependent on a future event. Once registration is granted, its consequences must follow according to the Act. The Tribunal respectfully followed the decision of a co-ordinate bench in Chandraprabhu Digamber Jain Mandir vs CIT(Exemptions) and other cited cases. Accordingly, the Tribunal directed the deletion of the condition, and the registration granted to the assessee shall operate in accordance with law without the imposed condition. The appeal was disposed of in these terms.

What were the facts?

The assessee, Mumbai Marathi Granthasangrahalaya, filed an appeal against an order dated 28.03.2026 passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Exemptions) (Ld. CIT(E)). The assessment year in question is 2026-2027. The Ld. CIT(E) granted conditional registration under Section 12AB of the Income Tax Act, 1961, imposing a condition that the registration and subsequent tax benefits would be subject to the outcome of a Special Leave Petition (SLP) pending before the Supreme Court. This SLP was against the Bombay High Court's judgment in the case of Chamber of Tax Consultants vs CIT (Exemptions). The assessee is aggrieved by this conditional registration.

What were the issues?

1. Whether the Ld. Commissioner of Income Tax (Exemptions) erred in not appreciating that a public charitable trust is deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation? (Question of law, concerning the interpretation of trust deeds and irrevocability provisions). 2. Whether the Ld. Commissioner of Income Tax (Exemptions) erred in not appreciating that the absence of an explicit clause of irrevocability is not a ground for rejecting the renewal application under Section 12AB of the Income Tax Act, 1961? 3. Whether the Ld. Commissioner of Income Tax (Exemptions) erred in making the grant of registration subject to the outcome of the proposed SLP against the Order of the jurisdictional High Court, as imposing such a condition was beyond his jurisdiction and illegal? (Question of law, concerning the powers of the Ld. CIT(E) under Section 12AB). Assessee's Contentions: The provisions of Section 12AB do not empower the Ld. CIT(E) to grant registration subject to any condition based on a future contingency. The Ld. CIT(E)'s power is limited to examining the objects, genuineness of activities, and compliance with other laws. The assessee also relied on the orders in ILLA Rajesh Foundation vs. CIT (Exemptions) and Keshavlal Vajechand Kapadia Charity Trust vs. CIT (Exemptions). Revenue's Contentions: The Departmental Representative relied upon the order passed by the Ld. CIT(E).

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI

For Appellant: Shri Anil Sathe
For Respondent: Shri Sandeep Lakra
Hearing: 16.09.2026Pronounced: 30.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “D”, MUMBAI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER And SHRI RAKESH KUMAR LODHA, ACCOUNTANT MEMBER ITA No.6413/MUM/2026 MUMBAI MARATHI CIT (EXEMPTIONS), GRANTHASANGRAHALAYA MUMBAI 172,3rd Floor, MMGS Building, Room No.601, 6th Floor, Vs. MMGS Marg, Dadar (East), Cumballa Hill, MTNL TE Mumbai – 400 014 Building, Pedder Road, Maharashtra Dr. Gopalrao Deshmukh Marg,Mumbai – 400 026 Maharashtra PAN- AAATM0306P (Appellant) (Respondent) Assessee Represented by : Shri Anil Sathe Revenue Represented by : Shri Sandeep Lakra CIT D.R. & Pooja Garbiyal SR. DR Date of Hearing : 16.09.2026 Date of Pronouncement : 30.09.2026 O R D E R PER : Shri Rakesh Kumar Lodha, Accountant Member: This appeal has been filed by the Assessee against an order dated 28-03-2026, by National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Exemptions) [in short

ITA NO.6413MUM-2026 MUMBAI MARATHI GRANTHASANGRAHALAYA AY 2026-2027 Ld. CIT(E)] under Section 12A(1)(b)(ii) and 80G of the Income Tax Act, 1961, (in short ‘the Act’).

2.

The Assessee has raised the following grounds of appeal: 1. The learned Commissioner of Income Tax Exemptions erred in not appreciating that a public charitable trust is deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation. 2. The learned Commissioner of Income Tax Exemptions erred in not appreciating that the absence of an explicit clause of irrevocability is not a ground for rejecting the renewal application under section 12AB of the Income Tax Act, 1961/Section 332 of the Income Tax Act, 2025. 3. The learned Commissioner of Income Tax Exemptions erred in making the grant of registration subject to the outcome of the proposed SLP against the Order of the jurisdictional High Court, as imposing such a condition was beyond his jurisdiction and illegal. 4. The appellant craves leave to add, alter OR amend any of the grounds of the appeal, at any time before OR at the time of hearing. 2. The brief facts of the case are that the Assessee is a charitable institution, had applied for renewal of registration under Section 12AB of the Act. The Ld.CIT (Exemptions) vide order dated 28th March 2026 granted conditional registration under section 12AB, by imposing a condition that registration and subsequent tax benefits would remain subject to the outcome of a special leave petition, pending before the Honorable Supreme Court against the judgment of the Honorable Bombay High Court in the

ITA NO.6413MUM-2026 MUMBAI MARATHI GRANTHASANGRAHALAYA AY 2026-2027 case of Chamber of Tax Consultants vs CIT (Exemptions), (2026) 184 Taxman.com 374 (Bombay). 3. The Assessee, being aggrieved by the conditional registration under section 12AB, is in appeal before the Tribunal. 4. Before us, the learned AR of the Assessee contended that the provisions of Section 12AB of the Act, do not empower the Ld.CIT(E) to grant registration/approval subject to any condition, based upon a future contingency. The power conferred to Ld. CIT(E) under Section 12AB is limited to examining the objects, genuineness of the activities and compliance with other laws for achieving the objects of the trust. 5. Per contra, the Departmental Representative relied upon the order passed by the Ld. CIT(E). 6. We have carefully considered the rival submissions and perused the material available on the record, and observed that limited issue before us for adjudication is whether the Ld. CIT(E) was justified in imposing a condition while granting registration under Section 12AB(1)(b) of the Act to the Assessee. 7. At the outset, it is found that Ld. CIT (E) has not rejected the application for registration u/s 12AB of the Act, filed by the Assessee. However, considering the application and compliance

ITA NO.6413MUM-2026 MUMBAI MARATHI GRANTHASANGRAHALAYA AY 2026-2027 material available on record, registration under Section 12AB of the Act has been granted to the Assessee. Therefore, the Ld. CIT(E) was satisfied by the compliances made by the Assessee. But, the applicability and consequential tax benefit of the registration/approval would remain restricted to subject to the outcome of the decision of the Hon’ble Supreme Court. The provisions for registration and approval do not confer the power to Ld.CIT(E) to grant registration/ approval by putting any condition based upon future contingency. 8. We find that an identical issue came up for consideration before the Co-ordinate Bench, ITAT, Mumbai, in the case Chandraprabhu Digamber Jain Mandir vs CIT( Exemptions), in case, ITA NO.4394/Mum/2026. Wherein also while granting the registration under Section 12A and approval under Section 80G, the Ld.CIT(E) imposed condition that the applicability and consequential tax benefits of such registration/approval would remain subject to the outcome of the decision of the Hon’ble Supreme Court. 9. The Co-ordinate Bench examined the legality of imposing any condition, while granting registration/approval, and held at para 16 that:

ITA NO.6413MUM-2026 MUMBAI MARATHI GRANTHASANGRAHALAYA AY 2026-2027 “Section 12A empowers the Commissioner either to grant registration or to reject the application in accordance with the law. The statute does not contemplate grant of conditional registration dependent upon a future event. Once registration is granted, the consequences flowing therefrom must follow in accordance with the provisions of the Act. Similarly, if at any future point of time circumstances arise warranting cancellation or withdrawal of the registration, the same can be done only in accordance with the statute provisions governing such action. The statute does not envisage an intermediate category whereby registration is granted but its efficacy is capped contingent upon the outcome of the future litigation. 18. Respectfully following the decision of the coordinate bench in ILLA Rajesh Foundation, read with the decision in Chamber of Indian Charitable Trusts and Bai Navajbai Tata Zoroastrian Girls School, we hold that the impugned condition contained in para 15 of the annexure to Form No. 10 AD cannot be sustained. 19. We accordingly direct deletion of the condition whereby the applicability and consequential tax benefit of the registration granted to the Assessee under Section 12AB(1)(b) of the Act were made subject to the outcome of the decision of the Supreme Court. The registration granted by Ld. CIT (E) shall operate in accordance with law without the aforesaid condition.

10.

The Assessee also relied upon the following Orders: 1. ILLA Rajesh Foundation vs. CIT (Exemptions), Mumbai, ITA No. 4488 & 4491/MUM/2026 2. Keshavlal Vajechand Kapadia Charity Trust vs. CIT (Exemptions), Mumbai, ITA Nos. 4436 MUM/2026 & 4437/MUM/2026 and 4403 & 4404/MUM/2026

ITA NO.6413MUM-2026 MUMBAI MARATHI GRANTHASANGRAHALAYA AY 2026-2027 11. In view of the facts of the instant case, it is covered by the findings of the Hon’ble Bombay High Court in the case of Chamber of Tax Consultants (supra), and orders passed by co-ordinate bench of ITAT, we respectfully, follow them and hereby hold that the registration granted under Section 12AB of the Act by learned Commissioner of Income Tax (Exemptions), shall operate without any stipulation, condition, or restrictions. Therefore, the impugned condition stands deleted. 12. Thus, the appeal filed by the assessee for registration under Section 12AB of the Act, is disposed of in the aforesaid terms. 13. In the result, appeal filed by the Assesse is allowed.

Order pronounced in the open court on 30.09.2026.

Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (RAKESH KUMAR LODHA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated: 30.09.2026. Sharath, Private Secretary.

ITA NO.6413MUM-2026 MUMBAI MARATHI GRANTHASANGRAHALAYA AY 2026-2027 Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench

//True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.

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