Reliance, ISKCON, PD Hinduja Hospital, and Breach Candy Hospital Trust to Income Tax Exemption Denial Over ‘Commercial Activity’ Allegations

Reliance Trust, a well-known charitable trust in Mumbai, along with several other organisations, including ISKCON, PD Hinduja Hospital, and Breach Candy Hospital Trust, has filed an appeal in the Income Tax Appellate Tribunal (ITAT), challenging a major decision of the Income Tax Department to deny renewal of registration under Section 12AB of the Income Tax Act. The organisations highlighted that this claim is essential for availing exemptions, and its cancellation can lead to massive financial loss to these institutions.

These entities have been alleged to be involved in commercial activities, a key ground highlighted by the tax authorities to deny the Section 12AB registration renewal, as relief under the said section is only permissible for non-profit institutions.

It was highlighted that one major hospital trust has also approached the Income Tax Appellate Tribunal (ITAT) after its renewal application was rejected in March 2026. During the initial hearings of the case, the tribunal noted that the grounds raised in the case are serious and hence need to be swiftly resolved. Consequently, instead of granting temporary relief, the tribunal decided to hear the full appeal on priority. It was observed that the case is not only limited to hospitals, but religious organisations such as ISKCON are also involved. Despite this, these organisations make sure that any surplus income is used merely for charitable purposes.

Experts say that the law does allow charities to carry out limited commercial activities, as long as their main purpose remains charitable and the earnings are used for public benefit. They also argue that at the stage of registration renewal, authorities should only check whether the organisation’s goals are genuinely charitable, not conduct a detailed investigation into its finances.

With many appeals likely to reach the ITAT, the final decisions could have a major impact on how “charitable purpose” is defined for modern institutions in India.