In only its second verdict, the tribunal panel, formerly known as the Charity Tribunal, rejected all seven of the commission's reasons for removing Nagendram Seevaratnam as a trustee of the Sivayogam temple in south London and decided unanimously he should be reinstated immediately.
The seven reasons included claims that Seevaratnam had failed to take sufficient steps to dissociate himself and the charity from the Tamil Tigers. The tribunal said that rumours about links had not been in wide circulation and the commission had failed to show it would be reasonable for anyone to believe them.
The tribunal agreed with the commission that Seevaratnam, who declined to give oral evidence, had been a dominant trustee but said that did not constitute misconduct or mismanagement in its own right and arose because of his professional background, language skills and his status in the religious and cultural life of the charity.
It accepted that Seevaratnam had shown misconduct and mismanagement in various ways, but disagreed with the commission that his removal was necessary to protect the assets of the charity.
The tribunal said it was also "most concerned" to hear that evidence submitted to the commission by Seevaratnam demonstrating he had implemented adequate procedures for selecting and monitoring recipients of funding in Sri Lanka had not even been translated.
A spokeswoman for the commission said the regulator would respond fully to the findings once it had had time to consider the judgement in detail.
"As the public would expect, the commission takes concerns about abuse and mismanagement of charities extremely seriously, particularly concerning allegations of links with terrorist organisations and financial mismanagement," she said.
An inquiry report would be published "in due course", she added.
The parties in the case have 14 days to make representations about whether the tribunal should award costs against the commission.
Seevaratnam's appeal was first posted in May 2008. The substantive hearing finished on 18 August. The tribunal aims to issue its verdicts within 21 days.