M/S ARULMGU DEVI KARUMARIAMMAN THIRUKOIL, CHENNAI V. CIT (EXEMPTIONS), CHENNAI

ITA 1090/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2021 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 04-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. NATARAJA
• Keywords: Charitable institution; Retrospective amendment
• Section: 92; 12AA; 201; 43; 13; 10(23C)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1090/CHNY/2018 ( )( / ASSESSMENT YEAR : NOT APPLICABLE M/S ARULMIGU DEVI KARUMARIAMMAN THIRUKOIL, THIRUVERKADU, POONAMALLE TALUK, CHENNAI - 600077 PAN : AADTA 3737 H V. THE INCOME TAX OFFICER (EXEMPTIONS), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI N.V. BALAJI, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI S. NATARAJA, JCIT 1 / 2% / DATE OF HEARING : 26.09.2018 3') / 2% / DATE OF PRONOUNCEMENT : 16.11.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) DATED 0 3.11.2016 AS MODIFIED BY ORDER DATED 28.12.2017. 2. SHRI N.V. BALAJI, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSEE IS A HINDU RELIGIOUS TEMPLE SITUA TED IN THE 2 I.T.A. NO.1090/CHNY/18 OUTSKIRTS OF CHENNAI SINCE 1943. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE TEMPLE WAS UNDER THE MANAGEMENT OF INDIVID UALS TILL 1963. IN THE YEAR 1963, THE HINDU RELIGIOUS AND CH ARITABLE ENDOWMENTS TOOK OVER THE ADMINISTRATION. THE ASSES SEE-TEMPLE WAS ALSO NOTIFIED UNDER SECTION 80G(2)(B) OF THE IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDING TO THE LD. CO UNSEL, THE ASSESSEE-TEMPLE WAS GRANTED APPROVAL UNDER SECTION 10(23C) BY AN ORDER DATED 08.05.1989. IT WAS ALSO RENEWED SUB SEQUENTLY FROM TIME TO TIME TILL ASSESSMENT YEAR 2014-15. BY AN O RDER DATED 03.11.2016, THE CIT (EXEMPTIONS) GRANTED APPROVAL F ROM THE ASSESSMENT YEAR 2016-17. THEREFORE, ACCORDING TO T HE LD. COUNSEL, THE ASSESSING OFFICER DENIED EXEMPTION UNDER SECTIO N 10(23C) OF THE ACT FOR THE ASSESSMENT YEAR 2015-16 ON THE GROU ND THAT THERE WAS NO APPROVAL FOR THE ASSESSMENT YEAR 2015-16. A CCORDING TO THE LD. COUNSEL, WHAT WAS SOUGHT FOR BY THE ASSESSE E IS RENEWAL OF APPROVAL GRANTED EARLIER IN THE YEAR 1989. THEREFO RE, THE CIT (EXEMPTIONS) OUGHT TO HAVE RENEWED THE APPROVAL UND ER SECTION 10(23C) OF THE ACT FROM THE YEAR IN WHICH THE EARLI ER APPROVAL EXPIRED. 3 I.T.A. NO.1090/CHNY/18 3. SHRI N.V. BALAJI, THE LD. COUNSEL FOR THE ASSESS EE, FURTHER SUBMITTED THAT AS PER THE PROCEDURE, EARLIER, EVERY YEAR THE APPROVAL UNDER SECTION 10(23C) OF THE ACT HAS TO BE RENEWED. SUBSEQUENTLY, THE CBDT BY ITS CIRCULAR NO.7 OF 2010 DATED 27.10.2010 CLARIFIED THAT IT IS ONE TIME APPROVAL W HICH WOULD BE VALID UNTIL IT WAS WITHDRAWN. THE REQUIREMENT OF PERIODI CAL RENEWAL OF APPROVAL WAS DISPENSED WITH. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT (EXEMPTIONS) OUGHT TO HAVE GRANTED APPROVAL FROM THE ASSESSMENT YEAR 2015-16. ON A QUERY FROM THE B ENCH, WHEN THE ASSESSEE-TEMPLE WAS UNDER THE ADMINISTRATIVE CO NTROL OF HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS DEPARTMENT OF G OVERNMENT OF TAMIL NADU, HOW IT BECOMES A TAXABLE UNIT UNDER THE PROVISIONS OF INCOME-TAX ACT?, THE LD.COUNSEL CLARIFIED THAT E VEN THOUGH THE ADMINISTRATION AND MANAGEMENT OF THE ASSESSEE-TEMPL E WAS UNDER THE OFFICERS APPOINTED BY HINDU RELIGIOUS AND CHARI TABLE ENDOWMENTS DEPARTMENT OF GOVERNMENT OF TAMIL NADU, THE ASSESSEE-TEMPLE IS AN INDEPENDENT RELIGIOUS INSTITU TION AS SUCH, HENCE, IT IS AN ASSESSABLE UNIT UNDER THE PROVISION S OF INCOME-TAX ACT. FROM THE YEAR 1985, THE CIT (EXEMPTIONS) ALSO GRANTED APPROVAL UNDER SECTION 10(23C) OF THE ACT AS RELIGI OUS INSTITUTION REGULARLY. 4 I.T.A. NO.1090/CHNY/18 4. THE EXECUTIVE OFFICER / JOINT COMMISSIONER OF TH E ASSESSEE- TEMPLE WAS ALSO PRESENT IN THE COURT DURING THE COU RSE OF HEARING. THE EXECUTIVE OFFICER / JOINT COMMISSIONER OF THE A SSESSEE-TEMPLE CLARIFIED THAT SHE IS A GOVERNMENT EMPLOYEE UNDER T HE HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS BOARD / DEPARTM ENT. SHE WAS APPOINTED BY THE GOVERNMENT AND SALARY WAS PAID FROM CONSOLIDATED FUND OF STATE GOVERNMENT. HOWEVER, AS PER THE PROVISIONS OF HINDU RELIGIOUS AND CHARITABLE ENDOWM ENTS ACT, 1959, EVERY TEMPLE HAS TO REIMBURSE THE EXPENDITURE TOWARDS PAYMENT OF SALARY AND OTHER BENEFITS TO THE GOVERNM ENT. REFERRING TO SECTION 92 OF HINDU RELIGIOUS AND CHARITABLE END OWMENTS ACT, 1959, THE EXECUTIVE OFFICER / JOINT COMMISSIONER SU BMITTED THAT TO REIMBURSE THE EXPENDITURE INCURRED BY THE GOVERNMEN T, TOWARDS THE SALARY AND ALLOWANCES OF THE OFFICERS APPOINTED BY IT, EACH TEMPLE HAS TO CONTRIBUTE 12.5% OF ITS INCOME TO THE GOVERN MENT. EVEN THOUGH, INITIALLY THE SALARY WAS PAID BY THE GOVERN MENT TO THE EXECUTIVE OFFICER AND OTHER OFFICERS AND EMPLOYEES APPOINTED BY THE GOVERNMENT, IN FACT, IT WAS REIMBURSED BY RESPE CTIVE TEMPLES IN THE STATE. THEREFORE, THE EXECUTIVE OFFICER / JOI NT COMMISSIONER OF THE ASSESSEE-TEMPLE CLARIFIED THAT THE ASSESSEE-TEM PLE IS A 5 I.T.A. NO.1090/CHNY/18 RELIGIOUS INSTITUTION, HENCE, ELIGIBLE FOR REGISTRA TION UNDER SECTION 10(23C)(V) OF THE ACT. SHE ALSO CLARIFIED THAT THE ASSESSEE-TEMPLE IS AN ASSESSABLE UNIT UNDER THE PROVISIONS OF INCOME-T AX ACT. THE EXECUTIVE OFFICER / JOINT COMMISSIONER OF THE ASSES SEE-TEMPLE HAS ALSO CLARIFIED THAT ALL THE TEMPLES IN THE STATE OF TAMIL NADU IS AN INDEPENDENT TEMPLE / RELIGIOUS INSTITUTION AND ASSE SSABLE AS SUCH UNDER THE PROVISIONS OF INCOME-TAX ACT. THE EXECUT IVE OFFICER / JOINT COMMISSIONER OF THE ASSESSEE-TEMPLE HAS ALSO CLARIFIED THAT TO HER UNDERSTANDING AND KNOWLEDGE, ALL THE TEMPLES IN THE STATE ARE FILING RETURN OF INCOME REGULARLY. IT IS ALSO CLA RIFIED THAT THE OBJECT OF THE ASSESSEE TEMPLE IS PROVIDED IN SECTION 66 OF HI NDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959. 5. ON THE CONTRARY, SHRI S. NATARAJA, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT ALL THE TEMPLES IN T HE STATE OF TAMIL NADU AND UNION TERRITORY OF PUDUCHERRY ARE INDEPEND ENT RELIGIOUS INSTITUTIONS AND THEY ARE LIABLE FOR ASSESSMENT AS SUCH UNDER THE PROVISIONS OF INCOME-TAX ACT. ACCORDING TO THE LD. D.R., IT IS OPEN TO THE INDEPENDENT TEMPLES TO APPLY FOR REGISTRATIO N EITHER UNDER SECTION 12AA AS RELIGIONS INSTITUTION OR APPLY FOR APPROVAL UNDER SECTION 10(23C)(V) OF THE ACT BEFORE THE CIT (EXEMP TIONS). 6 I.T.A. NO.1090/CHNY/18 REFERRING TO THE COMMUNICATION SAID TO BE RECEIVED FROM CIT (EXEMPTIONS), THE LD. D.R. CLARIFIED THAT ALL THE R ELIGIOUS AND CHARITABLE INSTITUTIONS ARE NOW UNDER THE CONTROL O F CIT (EXEMPTIONS) AT CHENNAI. AS PER THE SAID COMMUNICATION SAID TO BE RECEIVED FROM CIT (EXEMPTIONS), CHENNAI, THE LD. D.R. SUBMIT TED THAT THERE ARE ABOUT 35,793 TEMPLES IN THE STATE OF TAMIL NADU AND UNION TERRITORY OF PUDUCHERRY. HE ALSO CLARIFIED THAT MA NY TEMPLES ARE PERFORMING ORUKALA POOJAI AND THEIR GROSS TOTAL I NCOME IS LESS THAN 2.5 LAKHS, HENCE, THEY ARE NOT LIABLE TO FILE RETUR N OF INCOME. THE LD. D.R. FURTHER CLARIFIED THAT ABOUT 782 TEMPLES I N THE STATE OF TAMIL NADU AND UNION TERRITORY OF PUDUCHERRY HAVE OBTAINE D PERMANENT ACCOUNT NUMBER, OUT OF WHICH, 43 TEMPLES ARE IN CHE NNAI RANGE AND 739 TEMPLES ARE IN COIMBATORE RANGE. THE LD. D .R. FURTHER CLARIFIED THAT OUT OF 782 TEMPLES WHICH OBTAINED PE RMANENT ACCOUNT NUMBER, ONLY 131 TEMPLES FILED RETURN OF INCOME AND OTHER TEMPLES HAVE NOT FILED ANY RETURN OF INCOME. ON A QUERY FR OM THE BENCH WHETHER ANY ACTION WAS TAKEN OR INITIATED AGAINST T HOSE TEMPLES WHICH HAVE NOT FILED RETURN OF INCOME?, THE LD. D.R . CLARIFIED THAT SUCH INFORMATION IS NOT AVAILABLE WITH CIT (EXEMPTI ONS) IMMEDIATELY AND IT HAS TO BE COLLECTED FROM THE RESPECTIVE ASSE SSING OFFICERS OF THE RANGE. 7 I.T.A. NO.1090/CHNY/18 6. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBM ITTED THAT THE ASSESSEE-TEMPLE IS A RELIGIOUS INSTITUTION, THE REFORE, IT WAS APPROVED AS RELIGIOUS INSTITUTION UNDER SECTION 10( 23C)(V) OF THE ACT FROM THE YEAR 1989. HOWEVER, ACCORDING TO THE LD. D.R., THE ASSESSEE HAS NOT APPLIED FOR RENEWAL OF APPROVAL GR ANTED EARLIER. THEREFORE, THE APPLICATION FILED IN 2016 WAS TREATE D AS APPLICATION FOR FRESH APPROVAL UNDER SECTION 10(23C)(V) OF THE ACT AND THE CIT (EXEMPTIONS) HAS ACCORDINGLY GRANTED APPROVAL FROM THE ASSESSMENT YEAR 2016-17 BY AN ORDER DATED 03.11.201 6. THIS ORDER WAS SUBSEQUENTLY MODIFIED BY THE CIT (EXEMPTI ONS) BY AN ORDER DATED 28.12.2017. SINCE THE RENEWAL APPLICAT ION WAS NOT FILED IN TIME, ACCORDING TO THE LD. D.R., THE CIT (EXEMPT IONS) HAS RIGHTLY GRANTED FRESH APPROVAL FROM THE ASSESSMENT YEAR 201 6-17. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSEE CANNOT CLAIM ANY RETROSPECTIVE EFFECT OF APPROVAL UNDER SECTION 10(2 3C)(V) OF THE ACT. IN OTHER WORDS, ACCORDING TO THE LD. D.R., THE ASSE SSEE CANNOT CLAIM ANY APPROVAL FROM THE ASSESSMENT YEAR 2015-16 . 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE- TEMPLE IS ONE OF THE TEMPLES IN THE STATE OF TAMIL NADU, WHICH IS 8 I.T.A. NO.1090/CHNY/18 BEING MANAGED BY HINDU RELIGIOUS AND CHARITABLE END OWMENTS DEPARTMENT OF THE GOVERNMENT OF TAMIL NADU. IN ORD ER TO EXAMINE THE STATUS OF THE ASSESSEE-TEMPLE, WE NEED TO GO TH ROUGH THE LEGISLATIVE HISTORY OF THE RELIGIOUS INSTITUTIONS I N THE STATE. 8. BEFORE INDEPENDENCE, FORMER RULERS AND BRITISH G OVERNMENT ASSERTED THEIR SOVEREIGN POWER TO VISIT ENDOWMENTS AND TO PREVENT AND REDRESS ABUSES IN THE MANAGEMENT. IN 1817, THE BRITISH GOVERNMENT PROCLAIMED MADRAS ENDOWMENT ESCHEATS REG ULATION NO.VII OF 1817 CONFERRING GENERAL SUPERINTENDENCE O N ALL THE ENDOWMENTS OF HINDU TEMPLES IN THE ERSTWHILE BOARD OF REVENUE. THE ERSTWHILE BOARD OF REVENUE HAD TO ENSURE THAT A LL SUCH ENDOWMENTS WERE DULY APPROPRIATED TO THE PURPOSE FO R WHICH THEY WERE DESTINED BY THE GOVERNMENT OR INDIVIDUALS BY W HOM SUCH ENDOWMENTS WERE MADE. THE BOARD OF REVENUE WAS AUT HORIZED TO APPOINT LOCAL AGENTS. THE LOCAL AGENTS SO APPOINTE D BY THE BOARD OF REVENUE COULD NOT FUNCTION PROPERLY OWING TO LACK O F MECHANISM TO ENFORCE THEIR INSTRUCTIONS AND ORDERS. ACCORDINGLY , REGULATION VII OF 1817 WAS REPEALED BY AN ACT XX OF 1863. UNDER ACT XX OF 1863, LOCAL TEMPLE COMMITTEE WAS FORMED AS A SUCCESSOR TO BOARD OF REVENUE. THIS LOCAL TEMPLE COMMITTEE ALSO COULD NO T FUNCTION 9 I.T.A. NO.1090/CHNY/18 PROPERLY. AS A CONSEQUENCE, A SEPARATE LEGISLATION WAS PASSED BY THE ERSTWHILE MADRAS LEGISLATURE, KNOWN AS MADRAS H INDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1927. HINDU RELIGIO US AND CHARITABLE ENDOWMENTS BOARD WAS FORMED UNDER THE AB OVE ACT. POWERS WERE CONFERRED ON THE SAID BOARD TO FRAME SC HEMES FOR MANAGEMENT OF TEMPLES. IN CASE THE TEMPLE OR ENDOW MENT WAS MISMANAGED, AN AUTHORITY WAS CONFERRED ON THE HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS BOARD TO TAKE OVER THE AD MINISTRATION BY MAKING A STATUTORY NOTIFICATION 9. SUBSEQUENTLY, THE MADRAS HINDU RELIGIOUS AND CHA RITABLE ENDOWMENTS BOARD CONSTITUTED UNDER MADRAS HINDU REL IGIOUS AND CHARITABLE ENDOWMENTS ACT, 1927, WAS ABOLISHED BY E NACTING ANOTHER ACT KNOWN AS MADRAS HINDU RELIGIOUS AND CHA RITABLE ENDOWMENTS ACT, 1951. BY MADRAS HINDU RELIGIOUS AN D CHARITABLE ENDOWMENTS ACT, 1951, THE ADMINISTRATION OF RELIGIO US INSTITUTIONS AND CHARITABLE ENDOWMENTS WERE VESTED IN A HIERARCH Y OF OFFICERS WITH DEFINED JURISDICTION AND HEADED BY A COMMISSIO NER. THE ACT EMPOWERS THE AUTHORITIES CONCERNED TO APPOINT TRUST EES IN THE PLACE OF HEREDITARY TRUSTEES WHO WERE NOT FUNCTIONING. A N AREA COMMITTEE WAS ALSO FORMED FOR ALL THE NON-LISTED TEMPLES. 10 I.T.A. NO.1090/CHNY/18 10. THE MADRAS HINDU RELIGIOUS AND CHARITABLE ENDOW MENTS ACT, 1951 WAS SUBSEQUENTLY REPEALED BY TAMIL NADU H INDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959. IN FACT, TAMIL NADU HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959 CONSOLIDATES THE LAW RELATING TO THE ADMINISTRATION AND GOVERNANCE OF HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS AND IN STITUTIONS. THE PROVISIONS OF HINDU RELIGIOUS AND CHARITABLE ENDOWM ENTS ACT, 1959 WERE ALSO EXTENDED TO JAIN RELIGIOUS INSTITUTI ONS OR ENDOWMENTS. HIERARCHY OF OFFICERS WERE APPOINTED F OR MANAGING THE RELIGIOUS INSTITUTIONS, TEMPLES, ENDOWMENTS AND MATH, ETC. IN THE STATE OF TAMIL NADU AND THE UNION TERRITORY OF PUDUCHERRY, THERE ARE ABOUT 38000 TEMPLES ARE IN EXISTENCE, BES IDES ENDOWMENTS, MATH, ARAKATTALAI AND TRUSTS WHICH ARE ESTABLISHED FOR PROVIDING SERVICE TO VARIOUS TEMPLES IN THE STATE. BEFORE GOING INTO THE ISSUE ARISES IN THIS APPEAL, WE HAVE TO SEE WHA T IS A TEMPLE. THE WORD TEMPLE IS DEFINED IN SECTION 7(20) OF HI NDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959 AS FOLLOWS:- ' TEMPLE' MEANS A PLACE BY WHATEVER DESIGNATION KNOWN , USED AS A PLACE OF PUBLIC RELIGIOUS WORSHIP AND DEDICATE D TO, OR FOR THE BENEFIT OF, OR USED AS OF RIGHT BY, THE HIN DU COMMUNITY OR OF ANY SECTION THEREOF, AS A PLACE OF PUBLIC RELIGIOUS WORSHIP 11 I.T.A. NO.1090/CHNY/18 RELIGIOUS INSTITUTION IS DEFINED IN SECTION 7(18) OF HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959 AS FOLLOWS:- RELIGIOUS INSTITUTION MEANS A MATH, TEMPLE OR SPEC IFIC ENDOWMENT AND INCLUDES:- (1) A SAMATHI OR BRINDAVAN OR (2) ANY OTHER INSTITUTION ESTABLISHED OR MAINTAINE D FOR RELIGIOUS PURPOSE. 11. RELIGIOUS CHARITY, RELIGIOUS ENDOWMENT, SP ECIFIC ENDOWMENT ARE ALSO DEFINED IN SECTION 6(16), 6(17) AND 6(19) OF THE HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959. THEREFORE, A TEMPLE IS A RELIGIOUS INSTITUTION INDE PENDENTLY BESIDES SAMADHI, BRINDAVAN, ETC. THE WORD SAMADHI BRIND AVAN ARE ALSO DEFINED IN HINDU RELIGIOUS AND CHARITABLE ENDOWMENT S ACT, 1959. IN VIEW OF THE ABOVE, SUCH RELIGIOUS INSTITUTIONS, NAMELY, TEMPLE, SAMADHI, BRINDAVAN, MATH, ARAKATTALAI, ENDOWMENT AR E INDEPENDENT ASSESSABLE UNIT UNDER THE INCOME-TAX ACT. THE QUES TION NOW ARISES FOR CONSIDERATION IS WHETHER THESE TEMPLES, MATH, E NDOWMENTS, ARAKATTALAI, TRUST WHICH ARE BEING ADMINISTERED AND MANAGED BY THE OFFICERS OF HINDU RELIGIOUS AND CHARITABLE ENDOWMEN TS DEPARTMENT ARE PART OF GOVERNMENT DEPARTMENT OR IT IS AN INDEP ENDENT ASSESSABLE UNIT AS SUCH? IT IS CLARIFIED BY BOTH T HE LD. COUNSEL FOR THE ASSESSEE-TEMPLE AS WELL AS THE LD. D.R. THAT EV ERY RELIGIOUS 12 I.T.A. NO.1090/CHNY/18 INSTITUTION, TEMPLE, MATH IS AN INDEPENDENT UNIT OF ASSESSMENT UNDER THE INCOME-TAX ACT EVEN THOUGH THEY ARE ADMINISTERE D AND MANAGED BY GOVERNMENT OFFICERS APPOINTED BY HINDU R ELIGIOUS AND CHARITABLE ENDOWMENTS DEPARTMENT OF GOVERNMENT OF T AMIL NADU. 12. TO CLARIFY FURTHER, WE HAVE CAREFULLY GONE TH ROUGH THE PROVISIONS OF HINDU RELIGIOUS AND CHARITABLE ENDOWM ENTS ACT, 1959. SECTION 12 OF HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959 CLARIFIES THAT THE COMMISSIONER, ADDITION AL COMMISSIONER, JOINT COMMISSIONER, DEPUTY COMMISSIONER, ASSISTANT COMMISSIONER AND OTHER OFFICERS AND SERVANTS INCLUD ING EXECUTIVE OFFICERS OF RELIGIOUS INSTITUTIONS EMPLOYED SHALL B E THE SERVANTS OF GOVERNMENT AND THEIR SALARY, ALLOWANCE, PENSION AND OTHER REMUNERATIONS SHALL BE PAID IN THE FIRST INSTANCE O UT OF CONSOLIDATED FUND OF THE STATE. THE COMMISSIONER SUBSEQUENTLY, OUT OF TAMIL NADU HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ADMI NISTRATION FUND, SHALL REPAY TO THE GOVERNMENT THE SUMS PAID B Y THE GOVERNMENT TOWARDS SALARY, ALLOWANCE, PENSION AND O THER REMUNERATIONS TO THE GOVERNMENT EMPLOYEES. SECTION 92 OF HINDU RELIGIOUS AND CHARITABLE ENDOWMENT ACT, 1959 PROVID ES FOR PAYMENT OF 12.5% OF THE TEMPLES INCOME TO THE GOVE RNMENT 13 I.T.A. NO.1090/CHNY/18 ACCOUNT IN RESPECT OF SERVICE RENDERED BY THE GOVER NMENT AND THEIR OFFICERS. THEREFORE, IT IS OBVIOUS THAT ALL THE TE MPLES WHETHER THEY ARE LISTED TEMPLES OR NON-LISTED TEMPLES OR CALLED OTHERWISE, MATH, ENDOWMENTS, RELIGIOUS TRUSTS AND OTHER BODIES WHICH MANAGE THE PROPERTY OF TEMPLES ARE INDEPENDENT ASSESSABLE UNIT S UNDER THE PROVISIONS OF INCOME-TAX ACT. 13. WE HAVE ALSO CAREFULLY GONE THROUGH THE PROVISI ONS OF SECTION 10(23C)(V) OF THE INCOME-TAX ACT, 1961 WHIC H READS AS FOLLOWS:- 10(23C) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF (I) . . . . . . . (II) . . . . . . . (III) . . . . . . . (IIIA) . .. . . . . (IIIAA) . . .. .. . . . (IIIAAA) . . . . . . (IIIAB) . . . . . . (IIIAC) . . . . . . (IIIAD) . . . .. . .. (IIIAE) . . . . . .. (IV) . .. .. .. .. .. (V) ANY TRUST (INCLUDING ANY OTHER LEGAL OBLIGATI ON) OR INSTITUTION WHOLLY FOR PUBLIC RELIGIOUS PURPOSES, ( WHICH MAY BE APPROVED BY THE PRESCRIBED AUTHORITY), HAVING RE GARD TO THE MANNER IN WHICH THE AFFAIRS OF THE TRUST OR INS TITUTION ARE ADMINISTERED AND SUPERVISED FOR ENSURING THAT T HE INCOME ACCRUING THERETO IS PROPERLY APPLIED FOR THE OBJECTS THEREOF. 14 I.T.A. NO.1090/CHNY/18 14. THEREFORE, IN VIEW OF SECTION 10(23C)(V) OF THE ACT, THE ASSESSEE BEING A PUBLIC RELIGIOUS TEMPLE / INSTITUT ION IS ENTITLED FOR APPROVAL BY THE COMMISSIONER (EXEMPTION). IN FACT, THE COMMISSIONER (EXEMPTION) GRANTED APPROVAL UNDER SEC TION 10(23C)(IV) OF THE ACT BY AN ORDER DATED 03.11.2016 FROM THE ASSESSMENT YEAR 2016-17 WHICH WAS SUBSEQUENTLY MODI FIED BY AN ORDER DATED 28.12.2017 AS IF THE APPROVAL WAS GRANT ED UNDER SECTION 10(23C)(V) OF THE ACT. FROM THE MATERIAL A VAILABLE ON RECORD IT APPEARS THAT THE APPROVAL UNDER SECTION 1 0(23C) OF THE ACT WAS GRANTED FROM 08.05.1989 BY NOTIFICATION NO.8354 . THEREFORE, THE ASSESSEE IS SEEKING ONLY RENEWAL OF EARLIER APP ROVAL. HENCE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE COMMISSIONER (EXEMPTION) IS NOT JUSTIFIED IN RESTRICTING THE APP ROVAL FROM ASSESSMENT YEAR 2016-17. THE APPROVAL OUGHT TO HAV E BEEN RENEWED FROM THE ASSESSMENT YEAR 2015-16. THEREFOR E, THE IMPUGNED ORDER OF THE COMMISSIONER (EXEMPTION) DATE D 03.11.2016 AS MODIFIED VIDE ORDER DATED 28.12.2017 IS MODIFIED . THE COMMISSIONER (EXEMPTION) IS DIRECTED TO GRANT APPRO VAL UNDER SECTION 10(23C)(V) FROM ASSESSMENT YEAR 2015-16, SO THAT THE APPROVAL UNDER SECTION 10(23C)(V) OF THE ACT CAN BE CONTINUED 15 I.T.A. NO.1090/CHNY/18 WITHOUT ANY BREAK. HOWEVER, THE COMMISSIONER (EXEM PTION) AND ASSESSING OFFICER SHALL TAKE INTO CONSIDERATION THE OBJECT OF THE TEMPLE AS PROVIDED IN SECTION 66 OF THE TAMIL NADU HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1959 AND ENSURE THAT THE TEMPLE FUNDS ARE SPENT ONLY FOR THE PURPOSE WHICH IS PROVI DED IN SECTION 66 OF THE HINDU RELIGIOUS AND CHARITABLE ENDOWMENT ACT , 1959. IN OTHER WORDS, DURING THE COURSE OF ASSESSMENT, IF TH E ASSESSING OFFICER FINDS THAT THE PROVISION OF SECTION 66 OF H INDU RELIGIOUS AND CHARITABLE ENDOWMENT ACT, 1959 WAS VIOLATED OR THE TEMPLE FUNDS ARE SPENT CONTRARY TO SECTION 66 OF THE SAID STATE ACT, THEN THE ASSESSEE IS NOT ELIGIBLE FOR ANY EXEMPTION. 15. EVEN THOUGH THERE ARE ABOUT 38000 TEMPLES IN TH E STATE OF TAMIL NADU AND PONDICHERRY, THE COMMISSIONER (EXEMP TION) CLAIMS THAT 782 TEMPLES HAVE OBTAINED PAN NUMBERS, OUT OF WHICH, ONLY 131 TEMPLES FILED THE RETURN OF INCOME. IT IS NOT KNOWN WHAT ACTION HAS BEEN TAKEN BY THE DEPARTMENT AGAINST OTHER TEMP LES, MATH, ENDOWMENTS, TRUSTS, WHICH HAVE NOT FILED THEIR RETU RN OF INCOME. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT EVE N THOUGH ALL THE TEMPLES, MATH, ENDOWMENT, MOSQUES AND CHURCHES, ETC . ARE PRIMARILY PERFORMING RELIGIOUS FUNCTIONS IN THIS ST ATE, UNDER THE 16 I.T.A. NO.1090/CHNY/18 PROVISIONS OF INCOME-TAX ACT, THEY ARE ALL INDEPEND ENT TAXABLE UNITS. THEREFORE, IT IS FOR THE INCOME-TAX AUTHORITIES TO BRING ALL THE TEMPLES, CHURCHES, MOSQUES, WAKF, ENDOWMENTS, MATH, KATTALAI AND WHATEVER OTHER NAME THEY ARE CALLED, INCLUDING GURU DWARA, SIKH, JAIN BUDDHIST TEMPLE TO THE TAX NET. IF NO ACTION WAS TAKEN SO FAR IN RESPECT OF OTHER TEMPLES, MOSQUES, WAKF, CHURCHES, MATH, ENDOWMENTS, KATTALAI, TRUSTS, GURUDWARA, SIKH, JAIN S OR BUDDHIST TEMPLE, ETC. THE CONCERNED INCOME-TAX AUTHORITIES S HALL ENFORCE THE PROVISIONS OF INCOME-TAX ACT IMMEDIATELY. WHILE EN FORCING THE PROVISIONS OF INCOME-TAX ACT, THE ASSESSING AUTHORI TY AND COMMISSIONER (EXEMPTION) SHALL KEEP IN MIND THE REL IGIOUS FREEDOM GUARANTEED UNDER THE CONSTITUTION, MORE PARTICULARL Y, UNDER ARTICLE 25 AND 26 OF CONSTITUTION OF INDIA. WITHOUT AFFECT ING THE INDIVIDUAL FREEDOM GUARANTEED UNDER ARTICLE 25 AND 26 OF THE C ONSTITUTION, THE COMMISSIONER (EXEMPTION) AND OTHER AUTHORITIES SHAL L TAKE IMMEDIATE ACTION TO BRING ALL THE TEMPLES AND OTHER RELIGIOUS INSTITUTIONS SUCH AS MOSQUE, WAKF, CHURCH, MATH, EN DOWMENT KATTALAI, GURUDWARA, SIKH, JAIN OR BUDDHIST TEMPLE, ETC. WITHIN THE TAX NET. 17 I.T.A. NO.1090/CHNY/18 16. WITH THE ABOVE OBSERVATION, THE IMPUGNED ORDER OF THE COMMISSIONER (EXEMPTION) IS MODIFIED AND THE COMMIS SIONER (EXEMPTION) IS DIRECTED TO GRANT APPROVAL UNDER SEC TION 10(23C)(V) OF THE ACT FROM THE ASSESSMENT YEAR 2015-16. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 16 TH NOVEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 16 TH NOVEMBER, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. CIT (EXEMPTIONS), CHENNAI. 4. 79 -2 /DR 5. :( ; /GF.