SUBH PRABHAT EDUCATIONAL TRUST,FORT, MUMBAI vs. CIT (EXEMPTIONS), CUMBALLA HILL, MUMBAI

ITA 7760/MUM/2026Status: DisposedITAT Mumbai08 October 2026AY 2026-275 pages
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What were the facts?

The assessee, Subh Prabhat Educational Trust, applied for registration under Section 12AB of the Income-tax Act, 1961. The Commissioner of Income Tax (Exemptions) granted the registration for Assessment Years 2027-28 to 2036-37, but subject to certain conditions. The primary grievance of the assessee pertains to Condition No. 15, which made the registration and its consequential tax benefits contingent upon the outcome of proceedings proposed to be filed before the Hon'ble Supreme Court. This condition was imposed due to the Revenue's intention to challenge the Hon'ble Bombay High Court's decision in 'The Chamber of Tax Consultants & Ors. v. CIT(E)' before the Supreme Court. The assessee argued that the registration was granted in compliance with the High Court's binding decision, and a mere proposal to file a Special Leave Petition should not render the judgment inoperative.

What did the Tribunal hold?

The Tribunal held that the Commissioner of Income Tax (Exemptions) was not justified in making the registration granted under Section 12AB(1)(b) and its consequential tax benefits conditional upon the outcome of prospective proceedings before the Hon'ble Supreme Court. The Tribunal noted that the Commissioner himself acknowledged the binding decision of the Hon'ble Bombay High Court in 'The Chamber of Tax Consultants & Ors. v. CIT(E)', which held that a public charitable trust is deemed irrevocable by operation of law unless the instrument expressly provides for revocation. Since registration was granted in compliance with this binding pronouncement, it could not be rendered conditional or uncertain merely because the Revenue proposed to challenge the decision before the Supreme Court. The Tribunal reasoned that a High Court judgment remains binding until stayed or reversed by a superior court, and no such stay or reversal was brought on record. The Tribunal further stated that any consequences arising from a subsequent binding pronouncement of the Supreme Court would operate in accordance with law. Therefore, Condition No. 15 and the associated observations were expunged. The registration granted to the assessee was otherwise to remain undisturbed, subject to other statutory conditions. The Tribunal allowed the assessee's grounds of appeal.

What were the issues?

1. Whether the Commissioner of Income Tax (Exemptions) was justified in making the registration granted under Section 12AB(1)(b) and its consequential tax benefits conditional upon the outcome of prospective proceedings before the Hon'ble Supreme Court, despite granting registration in compliance with the binding decision of the Hon'ble Bombay High Court? The assessee contended that once the Commissioner accepted the binding decision of the jurisdictional High Court and granted registration accordingly, there was no justification for making the registration's efficacy or tax benefits contingent on a proposed Supreme Court challenge. The assessee argued that a mere proposal to file a Special Leave Petition does not render a High Court judgment inoperative unless stayed or reversed. The assessee also pointed to a clause in the Trust Deed for transfer of property to similar institutions, suggesting the property could not revert to the settlor. The Revenue relied upon the impugned order passed by the Commissioner of Income Tax (Exemptions).

Which sections of the Income-tax Act were involved?

Section 12AB(1)(b)

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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 04/04/2026 passed by the Ld. Commissioner of Income Tax (Exemptions), Mumbai [“Ld. CIT(E)”] u/s 12AB(1)(b) of the Income-tax Act, 1961, granting registration to the assessee subject to the conditions contained in the ann

The order continues below.

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