Mandke Foundation Vs CIT (Exemption) (ITAT Mumbai)
The Mumbai Bench of the ITAT allowed ITA Nos. 4054/Mum/2026 and 4053/Mum/2026 filed by Mandke Foundation against orders dated 30.03.2026 of the CIT(E), while dismissing Stay Application No. 65/Mum/2026 as infructuous. The assessee, a public charitable institution incorporated in 1998 and engaged in providing medical relief through hospitals, had its application for renewal of registration under section 12AB rejected and its existing registration, granted on 24.09.2021, cancelled retrospectively. Its consequential application for renewal of approval under section 80G was also rejected. The CIT(E) had considered the assessee’s high-end healthcare facilities, bed charges, treatment costs, surplus funds, alleged non-compliance with section 41AA of the Maharashtra Public Trusts Act, 1950 and the Indigent Patients Fund (IPF) Scheme, and expenditure involving payments outside India. The CIT(E) concluded that the activities were commercial and that the assessee had failed to comply with section 11(1)(c).
The Tribunal rejected the CIT(E)’s approach concerning section 2(15), noting that “medical relief” is an independent category of charitable purpose. It held that the assessee was undisputedly operating hospitals and providing medical treatment, and there was no finding that its objects were non-charitable, its medical activities were not genuine, income was diverted for private benefit, or the trust had abandoned its charitable objects. The Tribunal held that the Act does not prescribe that medical relief must be inexpensive, provided only through basic facilities, or accessible to every section of society. Premium rooms, sophisticated infrastructure, professional management, treatment charges and substantial receipts therefore could not, by themselves, establish commerciality. Generation of surplus was likewise not determinative where no private enrichment or diversion of income had been established.
