High Court to Rule on Shirdi Sai Baba Trust Tax Exemption

The Bombay High Court is set to decide on whether the Shirdi-based Shri Sai Baba Sansthan Trust can be exempt from income tax on anonymous donations. The Income Tax department challenges a ruling by ITAT which stated that the trust's dual nature as charitable and religious qualifies it for the exemption.

The Bombay High Court is poised to deliver a critical ruling on the eligibility of the Shirdi-based Shri Sai Baba Sansthan Trust for income tax exemptions on anonymous donations. The trust, recognized as both charitable and religious, currently faces scrutiny from the Income Tax department.

Justices Girish Kulkarni and Somasekhar Sunderesan concluded hearings on Wednesday regarding a petition by the Income Tax department against an October 2023 decision by an Income Tax Appellate Tribunal (ITAT). The ITAT had ruled that the trust's dual status warranted a tax exemption on its anonymous donations.

Despite the trust having received over Rs 400 crore in donations until 2019, the IT department argues that only a minor fraction—Rs 2.30 crore—was utilized for religious activities. The majority expenditure allegedly goes towards educational, medical, and other charitable initiatives, suggesting it functions predominantly as a charitable trust. The court noted that the trust's donations stem from the unwavering faith of its devotees as it reserved the matter for a final order.

(With inputs from agencies.)