ITAT Mumbai: Pending High Court Appeal Does Not Nullify Binding Tribunal Directions on Section 12AB Renewal
Background and Overview
The Mumbai Bench "A" of the Income Tax Appellate Tribunal recently adjudicated a significant appeal in the matter of Aditya Birla Education Trust Vs CIT (Exemption), arising from an order dated 30.03.2026 passed by the Commissioner of Income Tax (Exemption), Mumbai. The Commissioner had rejected the assessee's application for renewal of registration under Section 12AB of the Income-tax Act, 1961. The decision raises important questions about judicial discipline, the binding nature of tribunal orders, and the limits of authority available to subordinate officials when superior forums have already ruled on contested matters.
This case is particularly instructive for charitable and educational institutions navigating the complex re-registration framework introduced through successive statutory amendments to the Income-tax Act, 1961.
Chronology of Registration and Modifications
Initial Registration Under Section 12AB
Following statutory amendments that made re-registration of charitable institutions mandatory, the assessee filed an application under Section 12A(1)(ac)(i) on 22.04.2021. Pursuant to this application, registration under Section 12AB was granted on 28.05.2021, valid for a period of five years extending up to Assessment Year 2026-27.
Amendment of Trust Deed and Fresh Application
While the original registration was still in force, the trustees passed a resolution on 28.01.2022 amending certain clauses of the trust deed. The primary purpose of this amendment was to expressly incorporate and articulate objects relating to medical relief, which had previously been pursued as part of the broader object of advancement of general public utility. The amended trust deed received approval from the Charity Commissioner on 02.09.2024.
Following this approval, the assessee submitted a fresh application on 24.12.2024 under Section 12A(1)(ac)(v) seeking approval of the modified objects.
First Round of Litigation: Commissioner's Rejection and ITAT's Intervention
Commissioner's Initial Rejection Order Dated 30.06.2025
The Commissioner (Exemption) rejected the application and simultaneously cancelled the existing registration on three broad grounds:
- Foreign fund application: The assessee was alleged to have applied funds outside India in furtherance of activities conducted abroad.
- Community-specific benefit: The activities of the trust were alleged to cater primarily to the Marwadi community, raising concerns under the Act.
- Educational scope: Workshops, training sessions, and allied programmes were held to fall outside the definition of "education" for the purposes of the Act.
Coordinate Bench Order Dated 19.09.2025
The assessee challenged the above rejection before a Coordinate Bench of the Tribunal. The Tribunal, by its order dated 19.09.2025, overturned the Commissioner's order and issued comprehensive findings:
- On foreign remittances: The Tribunal recorded that the assessee imparted Cambridge and IB curriculum within India, and that payments made abroad represented examination fees, subscriptions, and educator training expenses directly linked to educational delivery in India. Accordingly, these remittances did not amount to application of funds outside India.