ANTONIO DA SILVA TRUST,DADAR , MUMBAI vs. CIT(EXEMPTION), MUMBAI, CUMBALLA, MUMBAI

The brief facts of the case are that the assessee, Antonio Dasilva Trust, is a public charitable trust which has been enjoying registration under the Income- tax Act for several years. The assessee applied for registration/renewal under section 12AB of the Act. The learned CIT(Exemptions), vide order dated 29.03.2026, granted registration but inserted a condition in stating that the registration and consequential tax benefits from 01.04.2026 onwards would remain subject to the outcome of the proposed Special Leave Petition to be filed by the Revenue before the Hon'ble Supreme Court against the judgment of the Hon'ble Bombay High Court in Chamber of Tax Consultants v. CIT (Exemptions) [2026] 184 taxmann.com 374 (Bom.). The assessee is aggrieved by this conditional rider.

The assessee is in appeal before us against the order passed by the learned CIT(Exemptions) to the limited extent of the condition imposed in clause No.15 while granting registration under section 12AB of the Act.

We have heard the rival submissions and perused the material on record. The issue before us is whether the learned CIT(Exemptions), after granting registration in accordance with the binding judgment of the Hon'ble jurisdictional High Court, could make the registration subject to the outcome of a proposed challenge before the Hon'ble Supreme Court.

In Chamber of Tax Consultants v. CIT (Exemptions) [2026] 184 taxmann.com 374 (Bom.), the Hon'ble Bombay High Court held that section 12AB does not require an express irrevocability clause in the trust deed and a public charitable trust is irrevocable by operation of law unless the trust instrument itself provides a power of revocation. The Hon'ble High Court further held that, in the case of trusts registered under the Maharashtra Public Trusts Act, the trust property cannot revert to the settlor. The authorities were accordingly directed not to reject registration merely for absence of an irrevocability or dissolution clause.

Once the learned CIT(Exemptions) accepted the above judgment and granted registration, he could not dilute that grant by making it conditional upon the outcome of a proposed SLP. A judgment of the jurisdictional High Court is binding on the Tax Authorities unless it is stayed, modified or reversed by a higher court. Mere proposal to challenge the judgment does not reduce its binding force.

The issue is also covered by the decisions of the Co-ordinate Benches. In ILLA Rajesh Foundation v. CIT (Exemptions), ITA Nos.4488 to 4491/Mum/2026, order dated 15.05.2026, the Tribunal held that neither section 12AB nor Rule 17A permits the CIT(Exemptions) to impose such a contingent condition merely because the Revenue proposes to challenge the jurisdictional High Court's decision.

The facts before us are directly covered by the above decisions. The learned CIT(Exemptions) has already granted registration under section 12AB of the Act. The only dispute is with regard to condition imposed making the registration and consequential benefits subject to the outcome of the proposed proceedings before the Hon'ble Supreme Court. In view of the binding judgment of the Hon'ble Bombay High Court and the decisions of the Co-ordinate Benches referred to above, such a condition cannot be upheld.

We, therefore, direct the learned CIT(Exemptions) to delete the qualification condition imposed. The registration granted to the assessee under section 12AB shall operate in accordance with law without the said qualification. If the legal position is subsequently altered by the Hon'ble Supreme Court, the consequences would follow in accordance with law at that stage. Accordingly, the grounds raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed.

The assessee is in appeal before us against the order passed by the learned CIT(Exemptions) to the limited extent of the aforesaid condition imposed while granting approval under section 80G(5) of the Act.

We have heard the rival submissions and perused the material on record. The limited issue before us is whether, after granting approval under section 80G of the Act in terms of the binding judgment of the Hon'ble jurisdictional High Court, the learned CIT(Exemptions) could still make such approval subject to the outcome of a proposed challenge before the Hon'ble Supreme Court.

We find that the issue is covered by the judgment of the Hon'ble Bombay High Court in Chamber of Tax Consultants v. CIT (Exemptions) [2026] 184 taxmann.com 374 (Bom.), wherein it was held that absence of an express irrevocability clause cannot by itself be a ground for denying registration. The Hon'ble High Court also held that a public charitable trust is irrevocable by operation of law unless the instrument itself contains a power of revocation. The relief granted by the Hon'ble High Court also extended to consequential approval under section 80G of the Act.

Once the learned CIT(Exemptions) accepted the above judgment and granted approval under section 80G, there was no justification for making the approval conditional upon the outcome of a proposed SLP. So long as the judgment of the jurisdictional High Court continues to hold the field, it is binding on the authorities within its jurisdiction. Mere filing or proposed filing of an appeal before a higher forum does not dilute its binding effect unless the judgment is stayed, modified or reversed.

We also find that an identical issue has been considered by the Co- ordinate Bench in ILLA Rajesh Foundation v. CIT (Exemptions), order dated 15.05.2026, wherein a similar condition was directed to be deleted. The same view was taken in Keshavlal Vajechand Kapadia Charity Trust v. CIT (Exemptions) [2026] 187 taxmann.com 1010 (Mumbai-Trib.) and Bai Manekbai A. Dubash Hareshwar Pandit Trust v. CIT (Exemptions) [2026] 188 taxmann.com 541 (Mumbai-Trib.), where identical caveats making registration or approval subject to the outcome of a proposed challenge before the Hon'ble Supreme Court were held to be unsustainable.

In view of the above, we find that this condition, insofar as it makes the approval under section 80G of the Act and the consequential tax benefits subject to the outcome of the proposed proceedings before the Hon'ble Supreme Court, cannot be upheld.

We accordingly direct the learned CIT(Exemptions) to delete the said conditional rider. The approval already granted to the assessee under section 80G(5) for A.Ys. 2027-28 to 2031-32 shall operate in accordance with law without the aforesaid qualification. If the legal position is subsequently altered by the Hon'ble Supreme Court, the consequences would follow in accordance with law at that stage. Accordingly, the grounds raised by the assessee are allowed.

In the result, the appeal filed by the assessee is allowed.

In the combined result, both the appeals of the assessee are allowed.