S R FOUNDATION,MUMBAI vs. CIT (EXEMPTION), MUMBAI

ITA 7265/MUM/2026Status: DisposedITAT Mumbai08 October 202612 pages
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What did the Tribunal hold?

The Tribunal held that the Ld. CIT(E) had no statutory power to impose an additional, contingent condition while granting registration under Section 12AB of the Act, beyond what is contemplated by the statute. The scheme of Section 12AB, particularly sub-sections (4) and (5), provides for cancellation or withdrawal of registration under specific circumstances, which adequately addresses the Revenue's concerns about non-genuine activities or violations. Therefore, a precautionary or contingent condition based on a proposed SLP to the Supreme Court was not sustainable. The Tribunal noted that the Ld. CIT(E) himself acknowledged the prevailing legal position that the absence of an express irrevocability clause does not automatically invalidate a public charitable trust's registration. Consequently, the condition making the registration and its benefits subject to the Supreme Court's outcome was deleted. The same reasoning was applied to the approval granted under Section 80G(5)(ii), and the impugned condition was also deleted for that approval. The Tribunal clarified that the registration and approval would remain governed by all statutory conditions and consequences prescribed under the Act.

What were the facts?

The assessee, S R Foundation, filed appeals against two orders dated 07/04/2026 passed by the Commissioner of Income Tax (Exemptions), Mumbai (Ld. CIT(E)). These orders granted the assessee renewal of registration under Section 12AB(1)(b) of the Income-tax Act, 1961, and approval under Section 80G(5)(ii) of the Act, respectively. However, both grants were made subject to a condition that their applicability and consequential tax benefits would depend on the outcome of proceedings before the Hon'ble Supreme Court. The assessee's primary grievance is this imposed condition, arguing it is not contemplated by the Act. The Ld. CIT(E) had noted the trust deed lacked an express irrevocability clause, referencing Section 332(2)(b) of the Income Tax Act, 2025, but also acknowledged a jurisdictional High Court ruling that public charitable trusts are deemed irrevocable by law unless an express power of revocation exists. The Revenue intended to file a Special Leave Petition (SLP) before the Supreme Court.

What were the issues?

1. Whether the Ld. CIT(E) erred in imposing a condition that the renewal of registration under Section 12AB of the Income-tax Act, 1961, and the consequential tax benefits would be subject to the outcome of proceedings before the Hon'ble Supreme Court. The assessee argued that the Ld. CIT(E) lacked the authority to impose such an additional, contingent condition not prescribed by the Act, and that the scheme of Section 12AB does not permit making registration conditional on future judicial pronouncements. The assessee contended that the absence of an express irrevocability clause does not render a public charitable trust revocable, especially when statutory provisions for cancellation exist. The revenue relied on the Ld. CIT(E)'s order. 2. Whether the Ld. CIT(E) erred in imposing a condition that the approval under Section 80G(5)(ii) of the Income-tax Act, 1961, and the consequential tax benefits would be subject to the outcome of proceedings before the Hon'ble Supreme Court. The assessee argued that the approval under Section 80G was granted purely consequentially to the Section 12AB registration and that no independent finding of non-charitable objects or non-genuine activities was made for Section 80G. The revenue relied on the Ld. CIT(E)'s order.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G(5),Section 12AB(1)(b),Section 12AB(4),Section 12AB(5)

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Heard together (2 matters)

ITA 7265/MUM/2026
ITA 7266/MUM/2026

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आयकर अपीलीय अधिकरण, म ुंबई पीठें, म ुंबई INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI BENCH: C BEFORE SMT. BEENA PILLAI, HON’BLE JUDICIAL MEMBER AND SHRI JAGADISH, HON’BLE ACCOUNTANT MEMBER ITA 7265/MUM/2026 (निर्धारण वर्ा/Assessment Year: 2027) S R FOUNDATION CIT (EXEMPTION) 105 1ST FLOOR APOLLO CIT (E) , MUMBAI , 6TH ARCADE , OLD NAGARDAS FLOOR , CH-601 , MTNL MUMBAI-400069, ROAD , MUMBAI MAHARASHTRA MUMBAI-400026, MAHARASHTRA अपीलधर्थी Appellant प्रत्यर्थी Respondent

PAN of Assessee: AAPTS6713H

अपीलधर्थी द्वारा/Appellant represented by: Shri Satish Mody, Adv. Shri Srinivasa Rao Vona, प्रत्यर्थी द्वारा/Respondent represented by: CIT DR (virtually appeared) ITA 7266/MUM/2026 (निर्धारण वर्ा/Assessment Year: 2027) S R FOUNDATION CIT (EXEMOTIONS) 105 1ST FLOOR , APOLLO CIT(E) MUMBAI , 6TH ARCADE , OLD NAGARDAS FLOOR , CH-601 , MTNL , MUMBAI-400069, ROAD , MUMBAI MAHARASHTRA MUMBAI-400026, MAHARASHTRA अपीलधर्थी Appellant प्रत्यर्थी Respondent

PAN of Assessee: AAPTS6713H

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