Chandraprabhu Digamber Jain Mandir Vs CIT (Exemption) (ITAT Mumbai)
ITAT Mumbai allowed the appeal of Chandraprabhu Digamber Jain Mandir and directed deletion of the condition imposed by the Commissioner of Income Tax (Exemptions) while granting registration under section 12AB(1)(b) of the Income-tax Act, 1961 for Assessment Years 2027-28 to 2036-37. The assessee, an approximately 110-year-old religious-cum-charitable trust managing a Mandir and medical diagnostic centre, had been granted registration, but Condition No. 15 stated that the applicability and consequential tax benefits of the registration from 01.04.2026 would remain subject to the outcome of the Revenue’s proposed Special Leave Petition against the Bombay High Court judgment in Chamber of Tax Consultants v. CIT(E).
The Tribunal noted that CIT(E) had not rejected the application; registration had already been granted after consideration of the material, thereby recording statutory satisfaction in favour of the assessee. The limited question was whether CIT(E) could nevertheless keep the efficacy of that registration contingent upon a future Supreme Court decision. Following ILLA Rajesh Foundation, Chamber of Indian Charitable Trusts and Bai Navajbai Tata Zoroastrian Girls School, the Tribunal held that section 12AB permits the Commissioner to grant registration or reject the application in accordance with law, but does not create an intermediate category of conditional registration dependent upon future litigation.
Referring also to Industrial Infrastructure Development Corporation v. CIT, it reiterated that a quasi-judicial authority can exercise only powers expressly conferred by statute. If circumstances later justify cancellation or withdrawal, action must be taken under the applicable statutory provisions; the registration cannot presently be kept in a suspended or contingent state. Accordingly, Condition No. 15 was held beyond the jurisdiction conferred by section 12AB and was deleted. The registration was directed to operate in accordance with law without the impugned condition, and the assessee’s appeal was allowed.
Cases Discussed
- Chamber of Tax Consultants v. CIT(E), [2026] 184 taxmann.com 374 (Bombay High Court), Writ Petition (L) No. 7587 of 2026 — CIT(E) referred to this binding jurisdictional High Court ruling while granting registration. The ruling held that a public charitable trust is deemed irrevocable by operation of law unless its instrument expressly permits revocation; the proposed Revenue SLP formed the basis of the impugned contingent condition.
- ILLA Rajesh Foundation v. CIT(E), ITA Nos. 4488 to 4491/Mum/2026 (ITAT Mumbai) — Directly followed. On materially similar facts, the Coordinate Bench held that registration/approval could not be made subject to the outcome of a proposed Supreme Court challenge and that such a condition was beyond the statutory scheme.
- Chamber of Indian Charitable Trusts v. PCIT, ITA Nos. 2168 & 2169/Mum/2021 (ITAT Mumbai) — Relied upon through ILLA Rajesh Foundation for the principle that the Commissioner, as a quasi-judicial authority, may exercise only powers expressly conferred by the Act and cannot impose unstipulated conditions.
- Industrial Infrastructure Development Corporation v. CIT, (2018) 403 ITR 1 (Supreme Court) — Quoted for the proposition that a quasi-judicial registration order can be withdrawn or recalled only where the statute expressly confers such power.
- Bai Navajbai Tata Zoroastrian Girls School v. CIT(E), ITA No. 2177/Mum/2021 (ITAT Mumbai) — Relied upon for holding that guidance or conditions attached by the Commissioner cannot be treated as legally binding unless their consequences are specifically contemplated by statute.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the assessee is directed against the order dated 28.03.2026 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai[hereinafter referred to as “CIT(E)”], in Form No.10AD, whereby the learned CIT(E) granted registration to the assessee under section 12AB(1)(b) of the Income-tax Act, 1961[hereinafter referred to as “the Act”], for Assessment Years 2027-28 to 2036-37, subject to the conditions mentioned in the annexure to the said order.
2. The assessee has raised the following ground of appeal:
1. Under the facts and circumstances the learned commissioner of Income Tax (Exemption) erred in granting the registration approval u/s 12AB(1)(b) with the condition that such registration is subject to the outcome of the Department’s special leave Petition to the supreme court against the order of the Bombay high court.
2. The learned commissioner of Income Tax (Exemption) failed to appreciate that –
i. The trust is around 110 years old, traditionally there was no requirement to have the clause of “Irrevocable”, in the trust deed.
ii. The trust is registered under section 12A (a) of I.T Act vide Registration No. TR/4115 dated 22-01-1976.
iii. The trust is registered under the Public Trust Act vide Registration No A 769 dated 29th December 1952 with Public Trust Registration office Gr. Bombay Registration.
iv. The trust is managing Mandir as well as a medical diagnostic Centre having facilities of various doctors for specific area and arranging free eye cataract operation etc. etc.
3. The Appellants crave leave to add, amend, alter, and delete the ground/s ofappeal at or before the hearing of appeal.
3. The relevant facts, as emanating from the order passed by the learned CIT(E), are that the assessee trust made an application before the learned CIT(E), seeking registration under section 12AB of the Act. The learned CIT(E), by order dated 28.03.2026 in Form No.10AD, granted registration/approval bearing Unique Registration Number AAATC0219R25MB01 under section 12AB(1)(b) of the Act. The nature of activities of the assessee has been recorded as “Religious cum charitable”. The registration has been granted for Assessment Years 2027-28 to 2036-37.
4. In the annexure to the impugned order, the learned CIT(E) incorporated several conditions. The grievance of the assessee is mainly directed against condition no.15, which reads as under:
“15. In this case, the instrument of trust does not contain any explicit clause affirming that the transfer of property under trust is an irrevocable transfer for all times. Section 332(2)(b) of the Income Tax Act, 2025 inter-alia lays down that a public trust is eligible for registration, only if the trust properties are held for the benefit of the general public under an irrevocable trust. The date of commencement of Income Tax Act, 2025 is 1st April 2026 i.e the same date from which renewal of registration/approval has been sought by the applicant. Therefore, the eligibility conditions prescribed in the Statute for registration/approval are not satisfied in this case. However, Hon’ble Bombay High Court in the Writ Petition(L) No.7587 of 2026 in the case of The Chamber of Tax Consultants & Ors Vs The CIT(E) 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 directed the Department to refrain from rejecting applications for registration/renewal under section 12AB solely on the ground of the absence of an explicit irrevocability clause in the Trust Deed/instrument. Revenue is preferring to move a Special Leave Petition before the Hon’ble Supreme Court against the said order. In the background of these facts, this renewal of registration/approval is being granted in respectful compliance to the binding judicial directions of Hon’ble Bombay High Court. However, the applicant Trust, doner entities and other stakeholders are hereby informed, by way of abundant caution, that the applicability and consequential tax-benefits of this registration/approval w.e.f. 01.04.2026 onwards, remain subject to outcome of the decision of Hon’ble Supreme Court.”
5. The learned Authorised Representative (AR) submitted that the assessee is a trust of about 110 years old. It was further submitted that the assessee manages a Mandir and also runs a medical diagnostic centre by providing facilities of doctors in different specialised areas and by arranging free eye cataract operations and other charitable activities. The learned AR further submitted that the learned CIT(E), after considering the application and material on record, has granted registration under section 12AB(1)(b) of the Act. Having granted registration, the learned CIT(E) could not have imposed a condition that the registration and consequential tax benefits would remain subject to the outcome of a proposed Special Leave Petition before the Hon’ble Supreme Court against the judgment of the Hon’ble Bombay High Court in the case of Chamber of Tax Consultants v. CIT(E), [2026] 184 taxmann.com 374 (Bom.). It was submitted that unless the judgment of the Hon’ble jurisdictional High Court is stayed, reversed or modified by the Hon’ble Supreme Court, the same is binding upon all authorities within the State of Maharashtra, including the learned CIT(E).
6. The learned AR further submitted that section 12AB does not empower the learned CIT(E) to grant registration subject to a future contingency. The power under section 12AB is limited to examining the objects, genuineness of activities and compliance with other laws material for achieving the objects of the trust. The learned CIT(E) can either grant registration or reject the application in accordance with law. However, the Act does not contemplate grant of a contingent or conditional registration of the nature made in the present case. In support of the said contention, the learned AR placed reliance upon the decision of the Coordinate Bench in ILLA Rajesh Foundation in ITA Nos.4488 to 4491/Mum/2026, wherein, on similar facts, the Bench considered the condition imposed by the learned CIT(E) making registration/approval subject to the outcome of the proposed Special Leave Petition before the Hon’ble Supreme Court and held that such a condition cannot be sustained. It was submitted that the issue is squarely covered in favour of the assessee.
7. The learned Departmental Representative relied upon the order passed by the learned CIT(E). It was submitted that the learned CIT(E) granted registration in respectful compliance with the judgment of the Hon’ble Bombay High Court and merely recorded a caution that the applicability and consequential tax benefits would be subject to the outcome of the decision of the Hon’ble Supreme Court. The learned DR accordingly supported the impugned order.
8. We have carefully considered the rival submissions and perused the material available on record. The limited issue arising for our adjudication is whether the learned CIT(E), after granting registration under section 12AB(1)(b) of the Act to the assessee for Assessment Years 2027-28 to 2036-37, was justified in imposing a condition that the applicability and consequential tax benefits of such registration would remain subject to the outcome of the decision of the Hon’ble Supreme Court in the Special Leave Petition proposed to be filed by the Revenue.
9. At the outset, it is pertinent to note that the learned CIT(E) has not rejected the application filed by the assessee. On the contrary, after considering the application and material available on record, registration under section 12AB(1)(b) of the Act has been granted to the assessee. Therefore, the satisfaction contemplated under section 12AB regarding eligibility of the assessee stood recorded in favour of the assessee. The grievance of the assessee is confined to paragraph 15 of the annexure to Form No.10AD whereby, while granting registration, the learned CIT(E) observed that the applicability and consequential tax benefits of the registration would remain subject to the outcome of the decision of the Hon’ble Supreme Court. According to the assessee, such a condition is beyond the scope of section 12AB and beyond the jurisdiction vested in the learned CIT(E).
10. We find that an identical issue came up for consideration before the Coordinate Bench in the case of ILLA Rajesh Foundation v. CIT(E) in ITA Nos.4488 to 4491/Mum/2026. In that case also, while granting registration under section 12AB and approval under section 80G, the learned CIT(E) imposed a condition that the applicability and consequential tax benefits of such registration/approval would remain subject to the outcome of the decision of the Hon’ble Supreme Court. The Co-ordinate Bench examined the legality of such a condition and, while adjudicating the issue, relied upon the earlier decisions of the Coordinate Benches in Chamber of Indian Charitable Trusts v. PCIT[I.T.A. Nos. 2168 & 2169/Mum/2021] and Bai Navajbai Tata Zoroastrian Girls School
v. CIT(E) [ITA No. 2177/Mum/2021].In paragraph 9 of the decision inILLA Rajesh Foundation, the Co-ordinate Bench reproduced and relied upon the observations of the Coordinate Bench in Chamber of Indian Charitable Trusts wherein the following observations were made:
“Shri Pardiwala further pointed out that, the Commissioner of Income- tax is a quasi-judicial authority and can only exercise those powers which are expressly conferred upon him under the Act. Absent such explicit conferment, the Commissioner cannot be assumed to have any implied powers.”
11. The Co-ordinate Bench further reproduced the observations of the Hon’ble Supreme Court in Industrial Infrastructure Development Corporation v. CIT,(2018) (403 ITR 1), as under:
“In our considered opinion, the CIT had no express power of cancellation of the registration certificate once granted by him to the assessee under Section 12A till 01.10.2004. It is for the reasons that, first, there was no express provision in the Act vesting the CIT with the power to cancel the registration certificate granted under Section 12A of the Act. Second, the order passed under Section 12A by the CIT is a quasi-judicial order and being quasi-judicial in nature, it could be withdrawn/recalled by the CIT only when there was express power vested in him under the Act to do so.”
12. The Coordinate Bench in Chamber of Indian Charitable Trusts thereafter held that the Commissioner can exercise only those powers which are specifically conferred by the statute and cannot impose conditions which are not contemplated by the statutory provisions governing registration under section 12AB.
13. The Co-ordinate Bench in ILLA Rajesh Foundation also relied upon the decision in Bai Navajbai Tata Zoroastrian Girls School v. CIT(E)(supra). In the said decision, after considering conditions imposed while granting registration under section 12AB, the Coordinate Bench held as under: “Learned Commissioner’s guidance about the conduct of the assessee, which is what in substance the conditions attached to the registration signify, cannot be treated, no matter how well intended it is, as a condition attached to the registration. These observations cannot be construed as legally binding in the sense that non-compliance with such guidance will not have any consequence unless and beyond what is specifically envisaged by the statute.”
14. The Co-ordinate Bench ultimately held that: “To this extent, and in these terms, the legal effect of these conditions, as visualized in the conditional grant of registration, stands vacated.
15. After considering the aforesaid judicial precedents, the Coordinate Bench in ILLA Rajesh Foundation held that once registration under section 12AB is granted, the learned CIT(E) cannot keep the efficacy and consequences of such registration in a suspended or contingent state by linking them to a possible future outcome of litigation before a higher judicial forum. The Bench held that such a condition is dehors the scheme of section 12AB and beyond the powers conferred upon the learned CIT(E).
16. We find ourselves in complete agreement with the aforesaid view taken by the Coordinate Bench. Section 12AB empowers the Commissioner either to grant registration or to reject the application in accordance with law. The statute does not contemplate grant of a conditional registration dependent upon a future event. Once registration is granted, the consequences flowing therefrom must follow in accordance with the provisions of the Act. Similarly, if at any future point of time circumstances arise warranting cancellation or withdrawal of registration, the same can be done only in accordance with the statutory provisions governing such action. The statute does not envisage an intermediate category whereby registration is granted but its efficacy is kept contingent upon the outcome of future litigation.
17. In the present case, the learned CIT(E) has already granted registration to the assessee under section 12AB(1)(b) of the Act. Having done so, the learned CIT(E) could not have further provided that the applicability and consequential tax benefits of such registration would remain subject to the outcome of a future decision of the Hon’ble Supreme Court. Such a condition is not contemplated by section 12AB and travels beyond the jurisdiction vested in the learned CIT(E).
18. Respectfully following the decision of the Coordinate Bench in ILLA Rajesh Foundation, read with the decisions in Chamber of Indian Charitable Trusts and Bai Navajbai Tata Zoroastrian Girls School, we hold that the impugned condition contained in paragraph 15 of the annexure to Form No.10AD cannot be sustained.
19. We accordingly direct deletion of the condition whereby the applicability and consequential tax benefits of the registration granted to the assessee under section 12AB(1)(b) of the Act were made subject to the outcome of the decision of the Hon’ble Supreme Court. The registration granted by the learned CIT(E) shall operate in accordance with law without the aforesaid condition.
20. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 29.06.2026.
