THE JIMMY S BILIMORIA FOUNDATION,MUMBAI vs. COMMISSIONER OF INCOME TAX, MUMBAI

आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order dated 28/03/2026 passed by the Ld.CIT(E), Mumbai granting registration to the assessee u/s 12AB of the Act, subject, inter alia, to the condition contained at Serial No.15 of the Annexure appended thereto. The registration was granted for the period relevant to Assessment Years 2027-28 to 2036-37. 2. At the outset, it is noted that the present appeal is delayed by 31 days. The assessee has filed a petition seeking condonation of delay, duly supported by an affidavit of its Trustee. It has been explained that the Trustees are social workers engaged in charitable activities and were not conversant with the procedural requirements and limitation prescribed for filing an appeal before the Tribunal. According to the assessee, the Trustees were under a bona fide but mistaken impression that the limitation period for filing the appeal was 90 days instead of 60 days. Thereafter, time was also consumed in identifying professional representation, obtaining legal advice, collating the records and finalising the engagement. The aforesaid explanation also stands affirmed by the Trustee on oath. 2.1. We have considered the explanation furnished by the assessee. The Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji&Ors. [1987] 167 ITR 471 has held that the expression “sufficient cause” should receive a liberal construction so as to advance substantial justice where no negligence, inaction or want of bona fides is imputable to the applicant. It is equally settled that ordinarily a litigant does not stand to benefit by lodging an appeal belatedly. 2.2. In the facts of the present case, we find the explanation furnished by the assessee to be bona fide and reasonable. There is nothing on record to suggest that the delay was deliberate or occasioned with any mala fide intention. Considering the cause shown and in the interest of substantial justice, the delay of 95 days is condoned and the appeal is admitted for adjudication on merits. 3. The assessee is a charitable trust registered under the Maharashtra Public Trusts Act, 1950. The assessee had applied for registration u/s.12AB of the Act. The Ld.CIT(E), vide order dated 28/03/2026 in Form No.10AD, granted registration u/s.12AB(1)(b) for the period relevant to Assessment Years 2027- 28 to 2036-37. The registration, however, was made subject to various conditions contained in the Annexure to the order. 3.1. The grievance of the assessee is confined to Condition No.15 of the said Annexure. The Ld.CIT(E) observed therein that the instrument of trust did not contain an explicit clause affirming that transfer of the property held under the trust was irrevocable for all times. The Ld.CIT(E), notwithstanding the judgment of the Hon’ble Bombay High Court referred to in the impugned order, proceeded to make the registration conditional in view of the Revenue's proposed challenge before the Hon’ble Supreme Court and stated that the applicability and consequential tax benefits arising from the registration/approval would remain subject to the outcome of the decision of the Hon’ble Supreme Court. 4. Before us, the Ld.AR submitted that once the assessee satisfies the statutory requirements for registration u/s.12AB, the Ld.CIT(E) cannot impose an additional condition which is not contemplated by the Act. It was submitted that the assessee is governed by the Maharashtra Public Trusts Act, 1950 and the properties dedicated to a public charitable trust cannot be dealt with contrary to the governing statutory framework. It was further contended that the very judgment of the Hon’ble jurisdictional High Court referred to by the Ld.CIT(E) holds that absence of an express irrevocability clause cannot, by itself, be made a ground for denying registration to a public charitable trust governed by the Maharashtra Public Trusts Act, 1950. The grounds of appeal specifically challenge the jurisdiction of the Ld.CIT(E) to impose such an extra-statutory condition. 4.1. The Ld.DR relied upon the order passed by the Ld.CIT(E).

We have perused the submissions advanced by both sides in light of the record placed before us. 5. It is an undisputed fact that the assessee has been found eligible for registration u/s.12AB and the registration itself has been granted by the Ld.CIT(E). Thus, the genuineness of the activities and charitable character of the objects of the assessee have not been disputed for the purpose of grant of registration.The controversy before us is, therefore, limited to whether, while granting the registration, the Ld.CIT(E) could make the same subject to Condition No.15 merely because the trust deed does not contain an express clause declaring the trust property to be irrevocable. 5.1. Significantly, the impugned condition itself records that the Hon’ble Bombay High Court, in The Chamber of Tax Consultants &Ors. v. CIT(E), WP(L) No.7587 of 2026, has held that a public charitable trust is deemed irrevocable by operation of law unless the instrument of trust expressly provides a power of revocation and that the Department should refrain from rejecting applications for registration/renewal solely on account of absence of an explicit irrevocability clause. The Ld.CIT(E), nevertheless, imposed the impugned condition on the ground that the Revenue proposed to challenge the said decision before the Hon’ble Supreme Court. 5.2. In our considered view, once Hon’ble Bombay High Court has laid down the applicable legal position, the authorities functioning within its territorial jurisdiction are bound to follow the same unless the operation of such judgment is stayed or the judgment is reversed by a higher judicial forum. A mere proposal to challenge the judgment before the Hon’ble Supreme Court cannot render the binding judgment of the Hon’blejurisdictional High Court inoperative. 5.3. Further, registration u/s.12AB has to be governed by the conditions and requirements contemplated under the statute. Once the statutory requirements for registration stand satisfied, an additional condition affecting the efficacy of the registration or making the tax consequences thereof contingent upon the possible outcome of future litigation cannot be engrafted into the statutory order unless expressly authorised by law. 5.4. We also note that the Ld.CIT(E) has not recorded any finding that the trust deed contains a clause empowering the trustees to revoke the trust or to appropriate its assets for non-charitable purposes. The objection is confined to the absence of an express irrevocability clause. In such circumstances, and particularly in view of the law noticed by the Ld.CIT(E) himself in the impugned order, Condition No.15 cannot be sustained.We, therefore, direct that Condition No.15 appearing in the Annexure to the order dated 28/03/2026 granting registration u/s.12AB be expunged. The registration granted to the assessee shall operate in accordance with law without being subjected to the said condition. Needless to clarify, all other statutory requirements and conditions applicable to the assessee under the Act shall continue to govern the registration in accordance with law. Accordingly, the grounds raised by the assessee in this regard are allowed. In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 12.10.2026.

Sd/- Sd/- JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai Dated: 12.10.2026 Shamik Sr. P.S. Copy to: THE JIMMY S BILIMORIA FOUNDATION, NO 5 BATTERY HOUSE 74 B DESAI RD 1 NEAPEN SEA RD, MUMBAI-400026, MAHARASHTRA COMMISSIONER OF INCOME TAX, ROOM NO 601 6TH FLOOR CUMBALLA HILL MTNL TE BUILDING PEDDER RD 2 DR GOPALRAO DESHMUKH MARG CUMBALLA HILL, MUMBAI-400026, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE