Bombay High Court Grants Tax Exemption to Shri Saibaba Trust

The Bombay High Court ruled that the Shri Saibaba Sansthan Trust is eligible for tax exemptions on anonymous donations. The court dismissed an appeal by the Income Tax department, stating that the trust qualifies as both a religious and charitable organization, thus qualifying for the exemption.

The Bombay High Court ruled on Tuesday that the Shri Saibaba Sansthan Trust, responsible for the administration of the renowned temple in Shirdi, Maharashtra, qualifies for a tax exemption on anonymous donations.

This decision was reached by a division bench comprising Justices Girish Kulkarni and Somasekhar Sunderesan, who dismissed the Income Tax department's challenge to an October 2023 decision by an Income Tax Appellate Tribunal. The tribunal had affirmed the trust's status as a dual charitable and religious institution, thereby making it eligible for the tax exemption.

Despite the department's argument that the majority of the trust's finances were spent on education and healthcare, the court agreed that the trust's religious activities justified the exemption. Under Section 115BBC(1) of the Income Tax Act, anonymous donations to charitable institutions are typically taxable unless the institution holds a mixed religious and charitable status.

(With inputs from agencies.)