SHREE MOTUMAL DWARKADAS AHUJA TRUST,MUMBAI vs. CIT (EXEMPTIONS), MUMBAI

ITA 7144/MUM/2026Status: DisposedITAT Mumbai08 October 2026AY 2026-277 pages
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What did the Tribunal hold?

The Tribunal held that the assessee's grievance was not against the rejection of the application but against the conditions attached to the approval, particularly Condition No. 5. The Tribunal noted that the Ld. CIT(E) himself acknowledged the Bombay High Court's decision in The Chamber of Tax Consultants & Ors. v. CIT(E) and granted approval in compliance with it, while simultaneously making the benefits subject to a potential Supreme Court outcome. Considering the peculiar facts and the nature of the grievance, the Tribunal deemed it appropriate to set aside the impugned order to the limited extent of the disputed conditions, especially Condition No. 5. The issue was restored to the file of the Ld. CIT(E) for fresh adjudication. The Ld. CIT(E) was directed to consider the Hon'ble High Court's decision, any subsequent Supreme Court order, and other binding judicial developments, and decide the issue afresh after affording the assessee an opportunity to be heard. The Tribunal made it clear it had not expressed any opinion on the merits of the conditions or the assessee's entitlement, leaving all contentions open. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Shree Motumal Dwarkadas Ahuja Trust, is a charitable trust that applied for approval under Section 80G(5) of the Income-tax Act, 1961. The Commissioner of Income Tax (Exemptions) [CIT(E)], Mumbai, granted approval for Assessment Years 2027-28 to 2031-32, but subject to certain conditions. One condition (Condition No. 5) stated that the Trust Deed lacked an explicit irrevocability clause. The CIT(E) noted this deficiency, referencing Section 332(2)(b) of the Income Tax Act, 2025, but also acknowledged a Bombay High Court decision deeming public charitable trusts irrevocable by law unless expressly providing for revocation. Despite this, the CIT(E) made the consequential benefits of the approval subject to the outcome of an anticipated Supreme Court appeal by the Revenue against the High Court's decision. The assessee appealed this conditional approval.

What were the issues?

1. Whether the conditional approval granted by the Ld. CIT(E) under Section 80G(5) of the Act, specifically Condition No. 5 regarding the absence of an explicit irrevocability clause in the Trust Deed, is sustainable? (Question of law and fact, concerning Section 80G(5) of the Income-tax Act, 1961). Assessee's contentions: The Ld. AR argued that the Ld. CIT(E) should not have imposed the condition due to the absence of an express irrevocability clause, as the issue of irrevocability of public charitable trusts had already been decided by the Hon'ble jurisdictional High Court. The AR prayed for the issue to be restored to the Ld. CIT(E) for fresh consideration. The assessee relied on the decision in The Chamber of Tax Consultants & Ors. v. CIT(E). Revenue's contentions: The Ld. DR relied on the impugned order, submitting that the conditions were imposed having regard to statutory provisions and the legal position. The DR stated the matter could be considered in accordance with law.

Which sections of the Income-tax Act were involved?

Section 80G(5)

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Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SMT. BEENA PILLAI, HON’BLE & SHRI JAGADISH, HON’BLE

Pronounced: 08/10/2026

PER SMT. BEENA PILLAI, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order dated 08/04/2026 passed by the Ld. Commissioner of Income Tax (Exemptions), Mumbai [“Ld. CIT(E)” for short], in Form No. 10AD, granting approval to the assessee u/s 80G(5) o

The order continues below.

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