TaxTMI 
TaxTMI 
2025 (7) TMI 1163
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....18335/2024 before the Hon'ble High Court. 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 please....
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....e reproduced as under: 1. The NFAC has grossly erred on facts and law of the case. 2. 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 co....
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....les administered by it would result in obnoxious results and redundant. The words "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" 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 Comm....
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....e properly administered and their income is duly appropriated for the purposes for which they were found or exist. (2) Without prejudice to the generality of the foregoing provisions, the Commissioner 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 religiou....
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..... Commissioner and audited by Comptroller and Auditor General of India and audit report is submitted to the Government unlike in other registered charitable, religious institutions where accounts are audited by Chartered Accountants. 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....
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....s where such sales are undertaken as an un remunerative enterprise with a view to propagate religion; (f) sale proceeds of jewels, vahanams, provisions or other articles or livestock purchased by the charitable or religious institution or 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 institution....
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....d Endowments Administration Fund. The Endowments Administration Fund shall vest in the Commissioner. (2) (a) The following amounts shall be credited to the Endowments Administration Fund, namely: ......... (iv) the amounts recovered under 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 expe....
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....nstituted by the Government and shall be administered in such manner as may be prescribed. 22. For the grounds urged herein before and those to be urged at the time of hearing, Humbly prayed that this Hon'ble Tribunal may be pleased 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 do....
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.... liable to pay the govt. amount from the income derived by it and such contribution is required to be made annually to the endowment administration fund for actual expenditure incurred towards such services as may be prescribed u/s 65 of the Endowment Act. He has further 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 p....
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....f the Act. 9.1 On appeal, the CIT (A) has deleted the addition u/s 69A, however, since the assessee has not filed any return of income, therefore, the claim of exemption u/s 11(1) of the Act was denied and consequently, the entire receipts/income of the assessee was taxed in 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,....
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....h are in the form of Section 43 Certificate, 12A Registration Certificate, Bank Accounts and summary of cash deposits, Time deposits account, Receipts and Payments Account, Computation of Total Income. These additional evidences were forwarded to the jurisdictional assessing officer and the assessing 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. ....
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....t, 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. 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 en....
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.... body or authority (whether or not a body corporate or corporation sole) established, constituted or appointed by or under any Central or State or Provincial Act which provides for the administration of any one or more the following, that is to say, public religious r 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 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 asses....
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....om devotional activities and worship offerings. It is very common that the traditional practice of monetary contributions tends to favour cash transaction over the other mode of payments. Accordingly it appears to me that the above sources of the time/cash deposit are genuine and accordingly the plea of the appellant is accepted. Therefore, addition made by the AO of Rs.6,96,63,345/- on account of unexplained money u/s 69A deserves to 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 2....
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....ithin due dates. In this case, neither the return of income nor the Form 10B has been filed by the appellant within the due date of filing the Return of income. Hence the appellant becomes ineligible to avail the benefit of the exemption /s 11 of the Act. Further Commissioner of Income Tax (Appeals) has no power under section 119(2)(b) to condone delay in filing the return of income as well as the Form 10B. Hence, before me, the various reasons furnished by the appellant in respect of 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 ....
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.... the provisions of sub-section (1) shall not apply to the anonymous donation received by the assessee. However, this section provides only the rate of tax applicable on the anonymous donation received by the assessee and in case the said anonymous donation is not liable to tax as per sub-sec (1) of Section 115BBC of the Act, then the same will be assessed under the normal provisions of the Act and on commercial basis. In other words, instead of assessing the entire donation, only the surplus after 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 provid....
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....dheenam vs. ACIT (Supra) has considered this issue in Para 12 to 17 and Para 37 as under: "12. The provisions of Section 10(23BBA) of the IT Act are extracted below: Section 10(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 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 relig....
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....tion was thus extended to those bodies or authorities set up under a Central, State or Provincial Act, that are entrusted with the administration of public religious and charitable trusts and endowments that include within their ambit temples, maths, wakfs, churches, synagogues, agiaries and other places of public religious worship and religious and W.P. Nos. 29312 & 29315 of 2019 charitable endowments as also societies formed under the Societies Registration Act for dispensation of religious and charitable purposes. 16. Since the overseeing authorities are constituted 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 e....
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....ment of the Hon'ble Madras High Court in the case of Sri Amirthakadeswaraswamy Devasthanam Dharumapouram Adheenam vs. ACIT (Supra), we hold that the provisions of section 10(23BBA) are not applicable on the income of the assessee temple but this provision is applicable only on the income of the administrative body or authority constituted/appointed under the Endowment Act. 14. In the result, both the appeals filed by the assessee are partly allowed. Order pronounced in the Open Court on 3rd July, 2025. ============= Document 1 நீ 30களிலà¯à®à®¸à¯ கை கெலà¯à®²à¯ˆà®²à¯ˆ à®à®¸à¯à®µà¯ˆà®¯à®¾ ஜூஸà¯, வதà¯à®¸à¯BO 20500, 40 22, 300198 0g SRI VENKATESWARASWAMY VARI DEVASTHANA JAMALAPURAM (V), YERRUPALEM (Mdl), Khammam Dist, TS - 507 2 Email : [email protected] Ph: 08749 - 279855 Dt.12.01.2024 To The Commissioner of Income tax. NATIONAL FACELESS APPEAL CENTRE (NFAC) INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, DELHI Sir Sub: Notice under section 250 of the Income-tax Act, 1961 - SIR VENKATESWARA SWAMY VARI....
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.... Show cause Notice u/s 144 of the Income-tax Act, 1961 dated 17/03/2022 the description of transactions of Rs.6,96,63,345/- for the A.Y.2013_14 with the PAN AAMTS2301Q proposed to be added are as under and the fact is also submitted by us in the remarks column: S. no. Information description Amount (Rs.) Fact / Remarks 1 Time deposit exceeding Rs. 2,00,000/- with the banking company 2,20,97,610/- The actual deposits are only Rs38,31,412/- and the rest are auto renewal of deposits of earlier years by the banker. 2 Deposit in cash 69,74,763/- The aggregate of actual Document 3 aggregating Rs. 2,00,000/- or more with a banking company. 3. Deposited cash of Rs. 10,00,000/- or more with the savings bank account. 4,05,90,972/- TOTAL 6,96,63,345/- cash deposit for the financial year 2012-13 in all the bank accounts of the temple are Rs 1,78,86,924/- only . ((Kindly refer attachment No 3,4 and 5 in Facts evidence attachment )) As per the bank statements and books of accounts of the institution the aggregate of cash deposits in all the bank accounts for the FY 2012-13 relevant to the AY 2013-14 are Rs1,78,86,924/- only .Further , the time deposits made....
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....ion to the fact no 9 of appeal where in we have clearly submitted that .............. by that time, the institution left with no choice for compliance, except to make an appeal to the higher authorities to set aside the assessment completed u/s 144 r.w.s 147 of the Income Tax Act." I reproduce the Fact No 9 for your kind reference which read as under : 9. The institution is being administered by the employees of the endowments department and out sourcing employees, for day to day operations of the institution. The staffs are habituated/trained to work only under traditional methods (manual) and are not aware of the electronic mode of operations, e-filing and faceless assessment procedures under Income Tax Act. In view of this, the management of the institution is not aware of the notices issued under electronic mode in the e-filing portal for the Asst. Year 2013-14 u/s 148 dated 26.03.2021, u/s 142(1) dated 30/06/2021 and 13/10/2021, Notices u/s 142(1) dated 20/12/2021, u/s 142(1) dated 11/03/2022 and show cause notice dated 17/03/2022. 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....