TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1163
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.... However, since the proper remedy was to file the appeal before the Tribunal, therefore, the Hon'ble High Court has allowed the assessee to avail the statutory remedy of filing appeal and also made it clear that the time consumed before the Hon'ble High Court shall not be counted for the purpose of the limitation before the Tribunal vide order dated 09/09/2024. Therefore, the delay of 160 days in filing the present appeal may be condoned and the appeal of the assessee be admitted for adjudication on merits. 3. On the other hand, the learned DR has objected to the condonation of delay in filing the present appeals. 4. We have considered the rival submissions as well as carefully perused the contents of the application for condonation of delay which are reproduced in para 5 to 7 of the order as under: 5. The appellant filed WP. No. W.P.No.21842 of 2023 of 2023 before the Hon'ble High Court for the State of Telangana praying for direction to Lnd. C.I.T. (A) to admit the appeals for the A. Y. 2013-14 & 2016-17 and keep the collection of tax pending until disposal of the appeals. The Hon'ble High Cort was pleased to give directions to the learned C.I.T. (A) according....
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....Order vide DIN and Order No. ITBA/NFAC/S/250/2023-24/ 1061101834(1) Dt. 19/2/2024 passed by the Lnd. C.I.T. (A) is assailed in this appeal. The Lnd. C.I.T.(A) failed to appreciate that the appellant was an endowment temple and hence, a government institution, even otherwise exempt u/s 10 (23BBA), that the process of assessment was conducted during the relaxation period granted by the Hon'ble Supreme Court and that the assessing offices has duplicated the same deposits of the appellant in to the bank a/c. 3. Notice u/s. 148 Dt. 26/3/2021 is illegal being barred by time. 6 years of time limit for issue of notice for A.Y. 2013-14 under unamended provisions of S. 149 ends on 31/3/2020. In terms of amended provisions of S. 149, notice u/s. 148 could not have been issued if it could not be issued under the unamended provisions of S. 149. 4. Notice u/s. 148 Dt. 26/3/2021 is illegal being against S. 144B as decided by The Hon'ble High Court for the state of Telangana in a batch of Writ Petitions in W.P. No. 25903 of 2022 and other connected matters decided by common order Dt. 14/9/2023. It held that when S. 148A or S. 148 notices were issued after 1/4/2021, subsequent proceedin....
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....ch under the Societies Registration Act, 1860 (21 of 1860), or any other law for the time being in force" are important and that section. clearly mentioned "temples". 9. Humbly submitted, in real sense of federalism, the Union is not entitled to leavy any tax on subjects contained in List-2, Schedule VII. Endowments is a state subject and hence, Income Tax Act does not apply to it. 10. Humbly submitted, since, public charitable and religious institutions are covered under S. 10, Chapter III of the Income Tax Act under "INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME", all other provisions like S. 12A are invalid. It is a contradiction in the Income Tax Act. Once, we agree that a receipt of certain amount does not form part of total income, Income Tax Act should not apply to it. 11. Temples or idols, per se, are not artificial juridical persons unless represented and managed by a registered trust or society. An abandoned idol would not be an artificial juridical person. In case of endowment Temples, Endowment Commissioner is the Body Sole, in terms of S. 7 of the Endowment Act. Endowment temples are not created trusts; they are assumed. Endowment Act does not prescribe registra....
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....ioner shall exercise the powers conferred on him and perform the functions entrusted to him by or under this Act in respect of such institutions or endowments in the State as are included in the lists published under clause (a), clause (d) and clause (e) of section 6. S.12.(1). The Commissioner, the Additional Commissioner a Regional Joint Commissioner, a Deputy Commissioner or an Assistant Commissioner having jurisdiction or any other person authorized by the Commissioner in this behalf, may, with due regard to the religious practices and usages of the institutions, inspect any charitable or religious institution or endowment, all movable and immovable property belonging to and all records, correspondence, plans, accounts and other documents relating to such institution or endowment for the purpose of satisfying himself that the provisions of this Act and the rules made there under are duly carried out. Humbly submitted that these rules do not apply to private/public charitable or religious institutions run by registered bodies of individuals. 16. Management and control of Endowment temples is vested in the government and hence, they cannot be equated with other trusts or societ....
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....ts. S. 58. (1) The Executive Officer shall keep regular accounts of all receipts and disbursements, for each financial year separately in such form and containing such particulars as may be specified by the Commissioner etc. 21. End use of funds of the Endowments Temples are at disposal of the government which it does in accordance with Endowments Act passed or amended by itself. S. 65. (1) In respect of the services rendered by the Government and their employees, every charitable or religious institution or endowment or Dharmadayam whose annual income is [not less than rupees fifty thousands], shall be liable to pay to the Government annually from the income derived by it, such contribution [of the actual expenditure incurred towards such services as may be prescribed. S. 65 (3) The contribution which an institution or endowment is liable to pay under sub-sections (1) and (2) shall be paid annually to the Endowments Administration Fund. (4) Every. institution or endowment referred to in subsection (1) shall pay to the Government annually for meeting the cost of auditing its accounts, such further sum of one and half per centum of its annual income. (5) For purposes of this secti....
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....r endowment; (g) donations in cash or kind by the donars as contributions to capital; (h) ubhayams or voluntary contributions received in cash or kind for a specified service in the charitable or religious institution or endowment and expended on such service; (i) actual driage of the agricultural produce or the articles from immovable properties or one percentum of the value of such receipts during the financial year, whichever is less; and (j) audit recoveries. Explanation (2) :- In respect of any remunerative undertaking of a. charitable or religious institution or endowment only the net profit shall be taken as income. In respect of non-remunerative undertaking of a charitable or religious institution or endowment such as a school, college, hospital, poor home, orphanage or any other similar institution, the grants given by Government or a local authority or donations received from public; or fees collected from pupils of educational institutions shall not be taken as income. Explanation (3) :- Receipts in kind other than, those referred to in item (g) and (h) of Explanation (1) shall be deemed to accrue as income on the date of the sale thereof and shall be- valued at the amou....
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....r section 30; (b) It shall be lawful for the Commissioner to accept to the credit of the said fund, grants or loans from the Government or any grant by any institution or person. (3) The Commissioner shall out of the said Fund repay to the Government, -- (i). the sums paid out of the Consolidated Fund of the State in the first instance towards the salaries, allowances, pension and other remuneration of persons appointed by the Government for rendering services under any of the provisions of this Act; (ii) any other expenditure incurred by the Government in the course of rendering services to and in connection with the administration of the charitable or religious institution or endowment under the provisions of this Act; (iii) the loans received from the Government; (iv) the cost of publication of journals, manuals, descriptive accounts and other literature relating to Hindu religion or charitable or religion institutions or endowments; (v) the expenses of committees or sub-committees thereof constituted for any purpose of this Act by the Government or by any officer or authority subordinate to the Government and specifically authorized by them in this behalf. S. 70. (1) (a) The Co....
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....d to allow the appeal in the interest of justice. Hyderabad. Dt: - 10-2024 Appellant EXECUTIVE OFFICER ASSISTANT COMMISSIONER SRI VENKATESWARA SWAMY TEMPLE Jamalapuram (V), Yerrupalem (M), Khammam District. 6.1 The learned AR of the assessee has submitted that the learned CIT (A) has partly allowed the appeal of the assessee, however, the claim of exemption u/s 11 and 12 of the Act was denied on the ground that the assessee did not file the return of income as well as the audit report in Form-10B. He has thus, contended that the issue in these appeals arises that the assessee was not required to file the return of income when the case of the assessee is covered u/s 10(23BBA) of the I.T. Act, 1961. The 2nd issue raised by the assessee is regarding the donation received by the assessee in the shape of hundi i.e. a donation received in the donation box placed at Devasthanam and therefore, the same cannot be treated as anonymous donation to be taxed u/s 115BBC of the Act. 7. As regard the first issue, the learned AR submitted that the provisions of section 10(23BBA) of the Act are applicable in the case of ....
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....submitted that a common good fund is created under the Endowment Act which shall be vested in the committee constituted by the Govt. and shall be administered in such manner as may be prescribed. Thus, the income of the assessee temple is exempt u/s 10(23BBA) of the Act. 8. On the other hand, the learned DR has submitted that the provisions of section 10(23BBA) of the I.T. Act are applicable only in respect of the income of the body/authority/ establishment constituted/appointed by the Central/State Govt for the administration of any one or more of the public religious or charitable trust or endowments including Math/Temples/ Gurdwara/Waqf/Churches etc., or other placed of public religious worship. Therefore, the income of such body which is constituted by the Central or State govt, to administer interalia Endowment Temples is exempt u/s 10(23BBA) and not the income of the temple itself. He has referred to the provisions of section 10(23BBA) and submitted that it is specifically made clear under the said proviso that nothing in this clause shall constitute to exempt from tax incomed of any Trust/Endowment or Society referred to therein. Thus, the learned DR has submitted that the ....
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.... normal course. So far as the claim of deduction/exemption u/s 11(1) of the Act is concerned, since the assessee has neither filed any return of income nor any audit report, therefore, the assessee cannot claim the benefit of section 11 & 12 of the Act without satisfying the mandatory conditions provided u/s 11 of the I.T. Act. The learned CIT (A) has given his findings in para 5.1 to 5.9 as under: 5. I have carefully examined the facts of the case and perused the grounds of appeal. Ground 1 to 5 of the present appeal simply pertains to the addition made by the AO of Rs. 6,96,63,345/- u/s 69A of the Act as unexplained money and the same is adjudicated as under. 5.1. The appellant SRI Venkateswara Swamy Devasthanam is a religious trust which has not filed its return of income for the AY 2013-14 the department has the information that the appellant has made certain transactions of Rs. 6,96,63,345/- for the AY 2013-14. Since the appellant has not filed return of income for the year under consideration the case of the appellant was reopened u/s 147 of the Act and various statutory notices were issued. The appellant not only failed to file the return of income in response to notice ....
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....ng officer was directed to offer its comment in the form of a Remand Report. In response the remand report is submitted by the AO the relevant para's of the same are reproduced as under: 2. Assessee Sir Venkateswara Swamy Vari Devastanam, Jamalapuram (V), Yerrupalem (Mdl.) Khammam Dist, Telangana State-507201, is a notified temple under Section 43 of the Andhra Pradesh Charitable and Hindu Religious Endowments Act 1987 running under the control of endowments department of Govt. of Telangana. The assessee is a charitable and religious institution registered u/s.12A of the Income Tax Act. 1961 vide HQRS.II 12A&80G/74/91-91 dated 01-11-1991 of CIT Guntur. 3. In this case, the assessment for the A.Y. 2013-14 was completed u/s. 143(3) r.w.s. 144 read with section 144B of the Act on 28.3.2022 by the National e- Assessment Centre, Delhi assessing the taxable incomes at Rs. 6,96,63,345. 4. In the case of the assessee assessment for the AYr. 2013-14 was reopened by issue of notices u/s. 148 of the Act dated 26-3-2021 as the assessee has not filed its return of income though there are substantial transactions in the bank accounts of the assessee to the tune of Rs. 6,96,63,345. As t....
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....inister and to maintain temples. Hence, exemption is allowable to organizations, which maintains temples, but not to the temples. Further, the assessee temple is registered u/s. 12A of the Income tax Act, it can get exemption of income by filing Income Tax Return. However, for the year under consideration assessee has not filed its return of income. 9. Further, assessee has stated that in the absence of knowledge about e-filing and faceless assessment procedures under Income tax Act, the management of the institution is not aware of the notices issued under electronic mode in the e-filing portals for the A.Y. 2013-14 u/s. 148 dated 26-03-2021, u/s. 142(1) dated 111-032022 and show cause notice dated 17-03-2022 and it came to know about the aforementioned notices and order, issued in electronic mode, only during the end of March, 2022 after issue of order u/s. 147 rws 144 rws 144B of the Income tax Act dated 28-03-2022 Din ITBA/AST/S/147/2021-22/1041820638. As stated by the assessee, It is pertinent to mention here that that the assessee has came to know and received assessment order u/s. 147, but it has not known the notices that were issued prior to completion of the assessment.....
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....eligious worship ) or societies for religious or charitable purposes registered as such under the Societies Registration Act, 1860 (21 of 1860), or any other law for the time being in force. Provided that nothing in this clause shall be construed to exempt from tax the income of any trust, endowment or society referred to therein;] 8 In view of the above, Sec. 10(23BBA) is applicable to the organizations or institutions established by Central or State Act to administer and to maintain temples. Hence, exemption is allowable to organizations, which maintains temples, but not to the temples. Further, the assessee temple is registered u/s. 12A of the Income tax Act, it can get exemption of income by filing Income Tax Return. However, for the year under consideration assessee has not filed its return of income. 5.4. From the above observation of the AO I am also of the considerate opinion the appellant was liable for filing the return of income for the year under consideration. Section Sec. 10(23BBA) is applicable to the organizations or institutions established by Central or State Act to administer and to maintain temples. Hence, exemption is allowable to organizations, which mai....
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....be deleted. Accordingly, ground made by appellant on this issue is allowed. 5.7. It is pertinent to mention here that though the appellant succeeded on the merits of the issues contended in this appeal however it could be seen from the facts of the case that the appellant has not filed return of Income for the year under consideration neither u/s 139 of the act nor against the notice u/s 148 of the Act. In view of the above facts notice for enhancing the income of the appellant was issued and relevant para of the same is reproduced as under: SHOW CAUSE NOTICE FOR ENHANCEMENT OF INCOME This refers to your appeal against the assessment order passed u/s 147 r.w.s. 144 of the Act by the AO for the assessment year 2013-14 dated 28/03/2022 wherein addition ofRs.6,96,63,345/- has been made which is being contested by you in appeal. In response to above addition, you have submitted detailed reply which was remanded to AO for his comments U/r 46A of the Act. After receiving of remand report, the same was duly forwarded to appellant for their comment. Your comment/submission with respect to addition of Rs. 6,96,63,345/- has been received which is being perused and duly considered. 03....
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....f the non filing of and the audit report and the return thereon becomes meaningless. As per CBDT Circular No. 273, dated 3-6-1980, CBDT had authorized only the jurisdictional Commissioner/Director of Income-tax to condone delay in filing Form 10B. The appellant in its submission made has submitted a condonation of delay application which was addressed to the Commissions of Income Tax (Exemptions). 5.9. Further, it is evident from the computation of income filed by the appellant that it had claimed total exemption of Rs. 1,69,75,429/- u/s 11(1) of the Act. So at this juncture since the appellant has not filed return of income as well as the form 10B of the act exemption u/s 11 of the act cannot be granted to the appellant at present. Accordingly, the claim of exemption of Rs. 1,69,75,249/- u/s 11(1) is hereby disallowed and accordingly added to the income of the appellant subject to the fate of condonation application. Thus, the AO is directed to consider total income of the appellant is Rs. 1,69,75,249/- for the year under consideration. The ground raised by the appellant is this regard is hereby rejected. 9.2 The assessee has not brought anything on record to show that in the a....
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....deducting the expenditure incurred by the assessee will be taxed as income of the assessee. Thus, the A.O is directed to assess the income of the assessee in terms of section 56 & 57 of the I.T. Act instead of the entire donations. 13. The other contention of the assessee before the Tribunal is only on the applicability of 10(23BBA) of the Act. For ready reference, the provisions of sec 10(23BBA) of the Act are quoted as under: "Section 10(23BBA) in The Income Tax Act, 1961 (23BBA) any income of any body or authority (whether or not a body corporate or corporation sole) established, constituted or appointed by or under any Central, State or Provincial Act which provides for the administration of any one or more of the following, that is to say, public religious or charitable trusts or endowments (including maths, temples, gurdwaras, wakfs, churches, synagogues, agiaries or other places of public religious worship) or societies for religious or charitable purposes registered as such under the Societies Registration Act, 1860 (21 of 1860), or any other law for the time being in force: Provided that nothing in this clause shall be construed to exempt from tax the income of any ....
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....mples, gurdwaras, wakfs, churches, synagogues, agiaries or other place of public religious worship) or societies for religious or charitable purposes registered as such under the Societies Registration Act, 1860 (21 of 1860), or any other law for the time being in force. Provided that nothing in this clause shall be construed to exempt from tax the income of any trust, endowment or society referred to therein;]' 13. Sub-clause 10(23BBA) was inserted by insertion, the memorandum explaining its objects states as follows: Exemption from income-tax in the case of statutory bodies or authorities for the administration of public religious or charitable trusts or endowments, etc. Section 9 of the Wakfs Act, 1954 provides for the establishment of the Board of Wakfs for each State for the general superintendence of all wakfs in that State. Section 8A of the Wakfs Act provides for the establishment of the Central Wakf Council for the purpose of advising the Central Government on matters concerning the working of State Wakf Boards and due administration of the wakfs. In the cases of public religious or charitable trusts or endowments of other communities, there are similar bodies set ....
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.... only to administer or manage the affairs of the religious and charitable endowments vested in them, and do not engage in any commercial activity, it was felt that any income that may arise or accrue to them would not bear the nature of taxable income for the purposes of the Income Tax Act. Thus, the body/ authority constituted under the Central, State or Provincial Act, and vested with the administration of a public religious or charitable trust encompassing places of worship, stood exempted from the application of the IT Act. It was made clear in the proviso to Section 10(23BBA) that the exemption did not extend to the constituents of that body/ authority whose income is liable to tax, in accordance with law. 17. A three tier structure is envisaged, a Central, State or Provincial enactment (tier) (i)), a body or authority set up under aforesaid Central, State or Provincial enactment in the nature of a public religious or charitable trust (tier) (ii)) and temples, maths, wakfs, churches, synagogues, agiaries and other places of public religious worship, religious and charitable endowments and societies (tier (iii)). The grant of exemption is conditional upon the existence of the....