CIT(E) Cannot Impose Future Litigation Conditions on Section 12AB Registration and Section 80G Approval, Says ITAT :

The ITAT Mumbai has removed the conditions imposed by the Commissioner of Income Tax (Exemptions) while granting registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961, to Dhamma Pattana Vipassana Trust. The Tribunal held that the registration and approval cannot be made conditional on the outcome of a future Supreme Court decision.

Dhamma Pattana Vipassana Trust (assessee) is a charitable trust that had sought registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961.

The Commissioner of Income Tax (Exemption) had granted registration and approval under Section 12AB and 80G, respectively; however, on the condition that "subsequent tax benefits would remain subject to the outcome of a special leave petition before the Honorable Supreme Court, filed by the Revenue against the judgment of the Hon’ble Bombay High Court in the case of 7587 of 2026 - Chamber of Tax Consultants vs The CIT (E), 2026."

The assessee, being aggrieved by the CIT(E)'s conditional approval, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Mumbai. The key concern raised before the Tribunal was whether the CIT(E) is fair to set conditions while granting the assessee registration and approval under Sections 12AB(1)(b) and 80G of the Act, respectively.

During the personal hearing before the Tribunal, the assessee contended that the Income Tax Act does not authorise the Commissioner to grant conditional registration based on a future legal development. It submitted that the Commissioner’s powers are limited to examining the charitable institution’s objectives, the genuineness of its activities and compliance with applicable laws. The Revenue representative, however, supported the Commissioner's orders.

After considering the submissions, the ITAT observed that the Commissioner had granted registration, indicating satisfaction with the relevant compliances. However, making the registration and tax benefits dependent on the outcome of future litigation was beyond the authority provided under the Act.

The tribunal held that "in view of the facts of the instant case, it covered by the findings of the Honorable Bombay High Court in the case of Chamber of Tax Consultants (supra), and orders of co-ordinate benches, we hereby delete the conditions, that registration/approval granted under Section 12AB and under Section 80G by the Ld. CIT(E), shall operate without any stipulation, condition, or restrictions. Therefore, the impugned condition stands deleted."

Accordingly, the ITAT deleted the conditions attached to the Trust’s registration under Section 12AB and approval under Section 80G, directing that they operate without such stipulations or restrictions. Both appeals were disposed of on October 12, 2026.