LALBAUG SARVAJANIK UTSAV MANDAL,MUMBAI vs. CIT (EXEMPTIONS), MUMBAI, MUMBAI

ITA 7065/MUM/2026Status: DisposedITAT Bangalore25 September 2026AY 2026-275 pages
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What did the Tribunal hold?

The Tribunal held 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.). The Tribunal found that the CIT(Exemptions) had accepted this judgment and granted registration. The Tribunal reasoned that once registration is granted based on a binding judgment of the jurisdictional High Court, the CIT(Exemptions) cannot make the benefit of such registration dependent on the outcome of a proposed SLP before the Hon'ble Supreme Court. The judgment of the jurisdictional High Court continues to bind authorities within its jurisdiction unless stayed, modified, or reversed. The Tribunal also referred to similar decisions by its coordinate benches 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.), which directed the deletion of identical conditional riders. The Tribunal directed the CIT(Exemptions) to delete the conditional rider, and the registration under Section 12AB shall operate without the qualification. The Tribunal noted that if the legal position is altered by the Hon'ble Supreme Court, consequences shall follow at that stage. No issue was expressly left undecided.

What were the facts?

The assessee, Lalbaug Sarvajanik Utsav Mandal, applied for registration under Section 12AB of the Income-tax Act, 1961. The Commissioner of Income Tax (Exemptions), Mumbai, granted registration for Assessment Years 2027-28 to 2036-37 vide an order dated 28-Mar-2026. However, the registration was made conditional on the outcome of a proposed Special Leave Petition (SLP) by the Department before the Hon'ble Supreme Court. The assessee is in appeal before the Tribunal against this conditional rider imposed by the CIT(Exemptions). The amount in dispute is not explicitly stated but pertains to the validity of the condition attached to the registration.

What were the issues?

1. Whether the learned CIT(Exemptions) erred in granting registration under Section 12AB subject to the outcome of a proposed SLP before the Hon'ble Supreme Court? (Question of law and fact, concerning Section 12AB of the Income-tax Act, 1961). - Assessee's contention: Once registration is granted following a binding judgment of the jurisdictional High Court, it cannot be made conditional on a future challenge before the Supreme Court. The condition imposed is arbitrary and beyond jurisdiction, and therefore, unconditional registration ought to have been granted. - Revenue's contention: Not recorded in the judgment. 2. Whether the learned CIT(Exemptions) erred in failing to appreciate that registration could not be granted conditionally once satisfaction regarding the genuineness of activities and objects was arrived at? (Question of law and fact, concerning Section 12AB of the Income-tax Act, 1961). - Assessee's contention: Similar to issue 1, emphasizing that conditional registration is impermissible. - Revenue's contention: Not recorded in the judgment.

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 OM PRAKASH KANT & SHRI SIDDHARTHA NAUTIYAL

For Respondent: Shri Surendra Mohan ( SR. DR. )

PER SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER

This appeal is filed by the Assessee against the order of Ld. CIT(Exemptions), Mumbai vide order dated 28-Mar-2026 for the Assessment Year 2026-27. The Assessee has raised the following grounds of appeal:

1.

(A) On the facts and circumstances of the case and in law the learned CIT (Exemption) erred in granting order for registration/approval subject to filing and/or outcome of SLP by the Department before the Hon'ble Supre

The order continues below.

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