SRI SOMESHWARA LAXMI NARASIMHA SWAMY TEMPLE PALAKURTHY,WARANGAL V. ITO., EXEMPTION WARD-1(4), HYDERABAD

ITA 1410/HYD/2024

AI Insights

The case involves multiple appeals by Sri Someshwara Laxmi Narasimha Swamy Temple against the orders of the Commissioner of Income Tax (Appeals) and the Commissioner of Income Tax (Exemptions), which were initially dismissed due to procedural delays and non-compliance with notices. The Tribunal found that the delays were not intentional but due to administrative oversights and lack of facilities for digital communication at the temple. The core issue revolved around the assessment of donations received by the temple, where the AO had taxed the gross receipts without allowing any deductions for expenditures. The Tribunal referenced a similar case (Zoos and Parks Authority of Telangana Vs. DCIT) to support the decision that only net income should be taxed if the income is assessed under normal provisions of the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717011 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2018-2019
• Appeal Filed On: 31-12-2024
• Other Referred Cases: Zoos and Parks Authority of Telangana Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: SAI PRASAD
• Keywords: Condonation of delay; Set aside; Reasonable cause; Period of limitation; Charitable institution; Time period of passing order
• Section: 147; 148; 12

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice President and Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.1408/Hyd/2024 to 1410/Hyd/2024 (निर्धारण वर्ा/Assessment Year: 2015-16, 2016-17 and 2018-19) Sri Someshwara Laxmi Narasimha Swamy Temple Palakurthy PAN : AAGAS8382Q Vs. Income Tax Officer, Exemption Ward-1(4) Hyderabad (Appellant) (Respondent) आ.अपी.सं /ITA No.141/Hyd/2025 (निर्धारण वर्ा/Assessment Year: 2024-25) Sri Someshwara Laxmi Narasimha Swamy Temple Palakurthy PAN : AAGAS8382Q Vs. Commissioner of Income Tax (Exemptions) Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri K.A.Sai Prasad, AR रधजस् व द्वधरध/Revenue by: Dr.Sachin Kumar, DR सुिवधई की तधरीख/Date of Hearing: 19/08/2025 घोर्णध की तधरीख/ Date of Pronouncement: 22/08/2025 आदेश / ORDER PER BENCH : These four appeals filed by the assessee are directed against three separate orders of the Commissioner of Income Tax (Appeals) [“Ld.CIT(A)”], National Faceless Appeal Centre, Delhi, all Printed from counselvise.com 2 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple dated 08.10.2024 for the A.Y.2015-16, 2016-17 and 2018-19 respectively and order dated 26.02.2024 of Commissioner of Income Tax (Exemptions) [“Ld.CIT(E)”], whereby the application of the assessee for registration u/s 12AB of the Income Tax Act, 1961 (“the Act”) was rejected. 2. The assessee has raised common grounds in the appeals arising from the orders of the Ld.CIT(A) for the A.Y.2015-16, 2016-17 and 2018-19. The grounds raised for the A.Y.2015-16 are reproduced as under : 3. The Ld.AR of the assessee has submitted that the Ld.CIT(A) has dismissed all the three appeals of the assessee as not maintainable on the ground of delay of 13, 11 and 14 days respectively. He has further submitted that the assessee temple Printed from counselvise.com 3 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple is managed by the administrator appointed by the Government body under Endowment Act and due to transfer of Executive Officer, the assessee could not represent before the Ld.CIT(A) to prosecute these appeals and consequently, the Ld.CIT(A) has dismissed all the three appeals of the assessee on the ground of delay. The Ld.AR has submitted that there was minor delay in filing the appeals before the Ld.CIT(A) and due to the reason of transfer of the Executive Officer and non-receipt of the notices issued by the Ld.CIT(A) on the e-mail ID of the assessee temple, there was no participation on behalf of the assessee before the Ld.CIT(A), which has resulted in the dismissal of these appeals. He has pointed out that the assessee temple is not having any facility of computer or internet and therefore, except the Executive Officer, nobody else could have responded to the notices issued by the Ld.CIT(A). He has filed the petition for condonation of delay before the Ld.CIT(A) in all the three appeals and submitted that the delay before the Ld.CIT(A) of 13, 11 and 14 days in filing these three appeals was neither intentional nor deliberate, but due to the circumstances, which were beyond the control of the assessee temple. He has pointed out that due to urgent temple administrative work connected with year-end rituals and unavoidable official commitments of the Executive Officer, the appeals could not be filed within the prescribed time. Thus, he has pleaded that the delay in filing the appeals before the Ld.CIT(A) may be condoned and the appeals of the assessee may be admitted for adjudication on merits. Printed from counselvise.com 4 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple 4. On the other hand, the Ld.DR has vehemently opposed to the condonation of delay in filing the appeals before the Ld.CIT(A) and submitted that the assessee has not disputed the delay in filing the appeals, but, there was no application for condonation of delay filed by the assessee before the Ld.CIT(A). He has further submitted that in the absence of any application for condonation of delay as well as non-compliance to the notices issued by the Ld.CIT(A), the appeals of the assessee filed belatedly were not maintainable and accordingly dismissed by the Ld.CIT(A) as not maintainable. He has relied upon the impugned orders of the Ld.CIT(A). 5. We have considered the rival submissions as well as the material on record. There is no dispute that there was delay of 11 to 14 days in filing these appeals before the Ld.CIT(A). The Ld.CIT(A) has given reasons for dismissal of the appeals, being barred by limitation in para 2.2 to 2.5 and 2.12 as under : Printed from counselvise.com 5 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple 6. Identical reasons have been given by the Ld.CIT(A), while passing all the three impugned orders. Thus, it is clear that the Ld.CIT(A) has issued the notice to the assessee dated 27.09.2024, pointing out the discrepancy of delay in filing the appeals and Printed from counselvise.com 6 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple when there was no response on behalf of the assessee to the said notice, the appeals of the assessee were dismissed, being barred by limitation. The assessee has explained the cause of delay as due to urgent temple administrative work connected with year- end rituals and unavoidable official commitments of the Executive Officer, the appeals could not be filed within the limitation period and therefore, there was delay of 11 to 14 days in filing these three appeals before the Ld.CIT(A). Having considered the facts and circumstances and particularly, when the assessee temple is managed by the administrator appointed by the Government under the Endowment Act and the Ld.CIT(A) has given only one opportunity to the assessee to explain the delay in filing these appeals, we are satisfied that the assessee was having a reasonable cause for delay and therefore, in the interest of justice, we condone the delay of 13 days, 11 days and 14 days in filing these appeals before the Ld.CIT(A) for the A.Y. 2015-16, 2016-17 and 2018-19 respectively. 7. On the merits of the issue, the Ld.AR of the assessee has submitted that the AO has assessed the entire hundi collection/donations, without allowing the corresponding expenditure incurred by the assessee and therefore, the assessment framed by the AO u/s 147 r.w.s.144B is highly arbitrary and unjustified. He has pointed out that for all the three years, the AO has made addition of the entire amount of hundi donation, without allowing expenditure/deductions, whereas, the AO ought to have assessed the correct income in the hand of the Printed from counselvise.com 7 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple assessee. In support of his contention, he has relied upon the decision of this Tribunal dated 06.05.2025 in the case of the Zoos and Parks Authority of Telangana Vs. DCIT in ITA No.114 to 118/Hyd/2025. 8. On the other hand, the Ld.DR has submitted that the assessee has not filed the return of income for all these three assessment years and the AO has reopened the assessment by issue of notice u/s 148A of the Act and when there was no response on behalf of the assessee to the notice issued u/s 148A, the AO then issued notice u/s 148 on 28.04.2022 and framed the assessment by considering the donation received by the assessee during the respective assessment years. Thus, he has submitted that the decision relied upon by the Ld.AR in the case of Zoos and Parks Authority of Telangana (supra) is distinguishable on facts. He has relied upon the orders of the authorities below. 9. In the rejoinder, the Ld.AR has submitted that the assessee was under the impression that after the administration of the assessee temple was taken over by the Government under the Endowment Act, the income of the assessee is not liable to tax, in view of the provisions of section 10(23BBA) of the Act, and therefore, the assessee did not file the return of income for these assessment years. 10. We have considered the rival submissions as well as the relevant material on record. The AO has assessed the entire Printed from counselvise.com 8 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple donations received by the assessee to tax, without allowing any expenditure or deduction. The AO has also considered the provisions of section 10(23BBA), which shows that even the Revenue is not denying this aspect that the income is exempt u/s 10(23BBA) in respect of the temple/Trust, whose administration is under the control of the Government as per the Endowment Act. The AO has made the addition on the ground that the assessee has not filed any record to show that the assessee is a public/religious/charitable Trust falling under the provisions of section 10(23BBA) of the Act. The relevant observation of the AO is as under : 11. Therefore, only because of non-representation of the assessee and non-compliance to the notice issued by the AO on Printed from counselvise.com 9 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple the part of the assessee, the AO assessed the entire donation to tax. The AO has not given the finding that the provisions of section 10(23BBA) are not appliable on the income of the assessee. Even otherwise, the AO is duty bound to assess the correct income of the assessee, while framing the assessment on best judgment basis and cannot assess the income of the assessee in arbitrary manner. The coordinate Bench of this Tribunal in the case of Zoos and Parks Authority of Telangana Vs. DCIT (supra) has also considered this issue in para 9 as under : “9. Having said so, let us come back to the assessment of income of the assessee society. The Assessing Officer having rejected the exemption u/sec.11 of the Act has considered gross receipts of the assessee society for the purpose of taxation. It was the argument of the Learned Counsel for the Assessee that, in case exemption is denied u/sec.11 of the Act, then, income of any trust or institution or society should be considered under normal provisions of the Act and ought to have allowed the expenditure/ deduction and only net income as per the financial statements should be brought to tax. In this case, the Assessing Officer after rejecting exemption u/sec.11 of the Act has taxed gross receipts without allowing deduction towards expenditure. It is well settled principle of law that, once the income of any Trust/Institution or Society is considered as AOP and assessed under normal provisions of the Act, then, all permissible deductions including expenditure incurred out of said income should be allowed as deduction. This view is supported by the decision of ITAT-C-Bench, Chennai in the case of Kingston Educational Trust vs., DCIT (supra) where the Tribunal after considering certain judicial precedents in light of Judgment of Hon’ble Madhya Pradesh High Court in the case of Kaluram Ganeshram (HUF) vs., CIT [1988] 172 ITR 154 (MP) held that, only net income needs to be taxed. Therefore, we are of the considered view that, the Assessing Officer and the learned CIT(A) are erred in taxing gross receipts of the assessee society instead of net income as per the financial statements. However, fact remains that since the assessment order is u/sec.143(1), the Assessing Officer does not have an occasion to verify the correctness of various Printed from counselvise.com 10 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple expenditure claimed by the assessee. Therefore, in our considered view, the matter needs to go back to the file of Assessing Officer for further verification. Thus, we set aside the orders of the learned CIT(A) and restore the issue back to the file of Assessing Officer for reconsideration of the issue. The Assessing Officer is directed to verify the claim of the assessee society in light of relevant books of accounts and financial statements furnished by the assessee society and allow the claim of deduction towards various expenditure out of income and tax only the net income as per the financial statements of the assessee filed for all the assessment years. Accordingly, all the appeal of the assessee society are allowed for statistical purposes.” 12. Accordingly, in the facts and circumstances of the case, the impugned order of the Ld.CIT(A) is set aside and the matter is remanded to the record of the AO for fresh adjudication, after giving one more opportunity of hearing to the assessee. ITA No.141/Hyd/2025 13. There is a delay of 275 days in filing the appeal before the Tribunal. The assessee has filed a petition for condonation of delay, which is supported by the affidavit of the Executive Officer of the assessee temple. The Ld.AR of the assessee has submitted that the notice as well as the impugned order was sent to the e- mail ID of the assessee temple, however, there was no facility with the assessee temple for log in into the e-mail ID as there is no facility of computer or internet connection in the premises of the assessee temple. He has further submitted that the Executive Officer was also not aware about the notice issued to the e-mail ID of the assessee temple and therefore, he could not notice the Printed from counselvise.com 11 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple impugned order passed by the Ld.CIT(E), rejecting the application for registration u/s 10AB of the Act. The Ld.AR has thus submitted that the delay in filing the appeal is neither deliberate nor willful, but due to lack of knowledge of the impugned order passed by the Ld.CIT(E) and until when the return of income for the A.Y.2024-25 was filed for claiming exemption u/s 11 and 12 of the Act. The Chartered Accountant of the assessee verified about the registration u/s 12AB of the Act and then found the impugned order passed by the Ld.CIT(E). Thus, the Ld.AR has submitted that immediately thereafter, the present appeal has been filed belatedly. He has thus prayed that the delay of 275 days in filing the present appeal may be condoned as the Ld.CIT(E) has rejected the application of the assessee on the ground that there was no compliance to the notice issued to the assessee and not decided the matter on merits. 14. On the other hand, the Ld.DR has opposed to the condonation of delay and submitted that it is a case of negligence on the part of the assessee, as after granting the provisional registration, the assessee filed the present application, but did not pursue the same before the Ld.CIT(E) and further, the present appeal was not filed within the limitation period and there is abnormal delay of 275 days in filing the present appeal. Thus, the Ld.DR has contended that the assessee does not deserve condonation of delay in filing the appeal. Printed from counselvise.com 12 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple 15. We have considered the rival submissions as well as perused the impugned order passed by the Ld.CIT(E). We have also gone through the contents of the affidavit filed by the Executive Officer, which is reproduced as under : Printed from counselvise.com 13 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple 16. Since the application of the assessee for registration u/s 12AB was rejected due to non-filing of the relevant details on record and non-compliance of notice issued by the Ld.CIT(E), therefore, in the facts and circumstances of the case, when the assessee temple is managed by the administrator/Executive Officer appointed by the Government under the Endowment Act Printed from counselvise.com 14 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple and delay in filing the appeal has occurred due to the confusion between the Executive Officer and temple staff about the impugned order sent to the e-mail ID of the assessee temple, then taking the lenient view, we condone the delay of 275 days in filing the present appeal, subject to cost of Rs.1,000/- to be deposited in the Prime Minister National Relief Fund, within a period of one month from the date of this order. It is made clear that the cost to be paid by the Executive Officer, who is responsible for the delay in filing the present appeal. 17. The assessee has raised the following grounds of appeal: 18. We have heard the Ld.AR as well as the Ld.DR and carefully perused the impugned order passed by the Ld.CIT(E). The Ld.CIT(E) has rejected the application of the assessee for want of non-compliance on behalf of the assessee to the notice issued by the Ld.CIT(E). Accordingly, in the facts and circumstances of the case as discussed while condoning the delay and in the interest of justice, the impugned order of the Ld.CIT(E) is set aside and the matter is remanded to the record of the Ld.CIT(E) for reconsideration of the application of the assessee for registration Printed from counselvise.com 15 ITA No.1408 to 1410/Hyd/2024 & 141/Hyd/2025 Sri Someshwara Laxmi Narasimha Swamy Temple u/s 12AB of the Act after verification and examination of the relevant record to be filed by the assessee as well as after giving an appropriate opportunity of hearing to the assessee. 19. In the result, all the four appeals of the assessee are allowed for statistical purpose. Order pronounced in the Open Court on 22nd August, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE PRESIDENT Hyderabad, Dated 22nd August, 2025 L.Rama, SPS Copy to: S.No Addresses 1 Sri Someshwara Laxmi Narasimha Swamy Temple, Palakurthy, C/o Katrapati & Associates, 1-1-298/2/b/3, Sowbhagya Avenue Apts., 1st Floor, Ashok Nagar, Hyderabad 2 The Commissioner of Income Tax (Exemptions), Hyderabad 3 The Income Tax Officer, Exemption, Ward-1(4), Hyderabad 4 The Pr.Commissioner of Income Tax (Exemptions), Hyderabad 5 The DR, ITAT, Hyderabad Benches 6 Guard File By order, Printed from counselvise.com "