AYYAPPA SEVA SAMGHAM BOMBAY vs. DY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 5 1

1/11 451-oswpl-35754-2023-J.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO. 35754 OF 2023 Ayyappa Seva Samgham Bombay, Plot No. 185 Shree Ayyappa Temple Road, Bangur Nagar, Goregaon (West), Mumbai-400 104. …Petitioner Versus Deputy Commissioner of Income Tax, Central Circle-5(1), Air India Building, 19th Floor, Nariman Point, Mumbai-400 021. …Respondent Mr. S. C. Tiwari a/w Ms. Rutuja N. Pawar for Petitioner. Ms. Swapna Gokhale for Respondent-Revenue. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 20th February 2024 JUDGMENT : (Per K. R. Shriram, J.) 1. Rule. Rule is made returnable forthwith by consent of parties. 2. Prayer (a) in the petition reads as under : “a) The Petitioner respectfully prays that they are entitled for a writ of certiorari or any other writ in the nature of certiorari, or any other appropriate writ, directions or orders of this Hon'ble Court for quashing and setting aside forthwith the impugned order (Exh.J) made by the Respondent and direct the Respondent to refund the taxes paid/recovered from the petitioner which are determined by the Respondent himself in the impugned order at Rs. 40,06,299/- (Exh.J) along with interest payable thereon under the provisions of the Act.” 3. The prayer is based on the fact that the impugned order dated 30th November 2023 allegedly giving effect to the order of Income Gitalaxmi CNR No : HCBM020357672023 Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

2024:BHC-OS:2943-DB

2/11 451-oswpl-35754-2023-J.doc Tax Appellate Tribunal (“ITAT”) records the total taxes paid by Petitioner at Rs. 40,06,299/-. Mr. Tiwari submits that the order giving effect, impugned in the petition, has not correctly given effect to the order of ITAT and the Income Tax Computation Form dated 30th November 2023 wrongly records that after adjusting the tax of Rs. 40,06,299/- paid by assessee, a further amount of Rs. 4,23,47,009/- is payable. Mr. Tiwari submits that the Assessing Officer (“AO”) has not even bothered to consider the order of the Hon’ble ITAT and has simply reproduced and proceeded to do what was done in the original assessment order that came to be impugned by assessee. 4. Assessee admittedly is a charitable organization under Section 12A of the Income Tax Act, 1961 (“the Act”). Paragraph 2 of the original assessment order dated 26th December 2019 under Section 143(3) of the Act for Assessment Year (“AY”) 2017-2018 records, “the assessee is registered as charitable organization under Section 12A of the Act and runs a temple and community hall at Bangur Nagar, Goregaon, Mumbai. The details filed by assessee has been perused and carefully deliberated upon.” This assessment order proceeded to tax a sum of Rs. 2,88,96,000/- as ‘unexplained money’ under Section 69A of the Act after giving exemption under Section 11 of the Act. 5. Petitioner’s income consists of voluntary contributions from devotees and followers. According to Petitioner, these voluntary Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

3/11 451-oswpl-35754-2023-J.doc contributions are deemed income chargeable to tax under Section 12(1) of the Act and exempted subject to the provisions of Sections 11 to 13 of the Act. For AY 2017-2018, Petitioner filed its return of income on 24th February 2018 declaring its entire income exempt from tax under Section 11 of the Act. On the same day, Petitioner also filed Audit Report in Form 10B. The then AO picked up Petitioner’s case for scrutiny and issued a notice under Section 143(2) of the Act. During the relevant assessment year, there was demonetization of high currency from 8th November 2016 to 13th December 2016. During AY 2017-2018, Petitioner had deposited in bank cash amounting to Rs. 6,21,86,235/-. The AO completed the assessment and passed an assessment order on 26th December 2019 for a total income of Rs. 2,88,96,000/- not accepting the explanation of Petitioner as regards cash deposits. In the assessment order, the AO has, however, accepted the gross receipts of Rs. 7,77,84,626/- were exempted under provisions of Section 11 of the Act and the deductions made by Petitioner from the gross receipts in the computation of income filed were correct. 6. This assessment order later came to be revised, by an order dated 31st March 2021, passed by the Commissioner of Income Tax (Exemptions), Mumbai under Section 263 of the Act on the ground that there was a shortfall of Rs. 18,11,617/- in the amount of Rs. 2,88,96,000/- worked out and assessed by the AO. He, therefore, set Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

4/11 451-oswpl-35754-2023-J.doc aside the order of AO with a direction to make the assessment order de novo. 7. The new AO did not restrict himself to the shortfall of Rs. 18,11,617/-, but held that Petitioner was not entitled to even the exemption under Section 11 of the Act because on verification of case records, it was seen that assessee has filed Form 10B on 24th February 2009, whereas it was required to be filed on or before the specified date referred to in Section 44AB of the Act. As assessee has failed to file Form 10B within the due date, the claim of exemption under Section 11 made by assessee was disallowed. 8. Before we proceed further, we would make an observation that this amounted to reviewing the earlier assessment order, which the AO was not authorized to or empowered to. As held in Jindal Photo Films Limited v. The Deputy Commissioner of Income Tax1, “If that were not the legal position, it would result in placing an unrestricted power of review in the hands of the assessing authorities depending on their changing moods.” It amounted to a change of opinion because the earlier AO has already given a finding that Petitioner was entitled to exemption under Section 11 of the Act. 9. The new AO completed the assessment and passed an order afresh on 23rd February 2022 assessing the income at Rs. 1. [1998]234 ITR 170 (DELHI). Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

5/11 451-oswpl-35754-2023-J.doc 7,75,34,407/-. He held that out of this amount, a sum of Rs. 3,07,77,671/- being cash deposited by Petitioner, was assessable under Section 69A of the Act and, therefore, came in the purview of Section 115BBE of the Act. This is notwithstanding in the assessment order dated 26th December 2019 (first assessment order), the AO had accepted the expenses of Petitioner as bona fide expenses to the tune of Rs. 3,96,77,300/- and had even deducted the amount for arriving at the net income. 10. Aggrieved Petitioner filed an appeal before the Commissioner of Income Tax (Appeals) (“CIT(A)”). Petitioner raised various grounds including the ground that the finding of AO that Form 10B was filed only on 24th February 2019 was not correct because the form had, in fact, been filed on 24th February 2018. The CIT(A) disposed Petitioner’s appeal by directing the AO as under : “In any case, the filing of Form 10B is a matter of fact and can easily be verified by the AO. If Form No. 10B has been filed before the specified date referred to in Section 44AB, the claim of exemption under Section 11 of the Act shall not be disallowed. The AO is directed to verify the same and allow accordingly. The claim of the Appellant is allowed in the above terms.” The CIT(A) did not accept Petitioner’s submission against assessment of Rs. 3,07,77,671/- under Section 115BBE read with Section 69A of the Act and partly confirmed the order of AO to that extent. 11. Impugning this order, Petitioner filed an appeal before the ITAT. Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

6/11 451-oswpl-35754-2023-J.doc The grounds taken by Petitioner have been reproduced in the order of ITAT as under : “The assessee has raised the following grounds of appeal : "1. That on the facts and in the circumstances of the case and in law, learned Assessing Officer has erred in determining total income of the appellant at Rs. 7,75,34,410/- as against NIL declared by the appellant. 2. Without prejudice to the generality of the ground of appeal no. 1 above, on the facts and in the circumstances of the case and in law, learned Assessing Officer has erred in not considering and disallowing the deductions claimed by the appellant and allowed by the Assessing Officer in the assessment order u/s 143(3) made on 26.12.2019. 3. Without prejudice to the generality of the ground of appeal no. 1 above, on the facts and in the circumstances of the case and in law, learned Assessing Officer has erred in holding that Rs. 3,07,77,671/- was chargeable to tax u/s 115BBE of the Act as the same is considered by him as unexplained money u/s 69A of the Act. 4. That the impugned order being contrary to law, evidence and facts of the case may kindly be set aside, amended or modified in the light of the grounds of appeal enumerated above. 5. That each of the grounds of appeal enumerated above is without prejudice to and independent of one another. 6. That the appellant craves leave to reserve to himself the right to add to, alter or amend any of the aforesaid grounds of appeal before or at the time of hearing and to produce such further evidence, documents and papers as may be necessary.” 12. The ITAT, by an order dated 15th May 2023, accepted the plea of Petitioner that for assessment year in question Petitioner’s total income should be computed as ‘Nil’ as against Rs. 7,75,34,410/- assessed by the AO in the assessment order dated 23rd February 2022 in pursuance to the order under Section 263 of the Act. Paragraph 6 of the order of ITAT reads as under : Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

7/11 451-oswpl-35754-2023-J.doc “6. In the light of above discussion on judicial pronouncements and factual matrix of the case, we are of the considered view that section 69A has no applicability in the present case, hence section 115BBE of the Act. Accordingly, Ground Nos. 1 & 2 raised by the assessee is allowed.” 13. While coming to this conclusion, the ITAT has also correctly recorded that Section 69A of the Act was not applicable to the facts and circumstances of this case. So also, the provisions of Section 115BBC of the Act because Sub-section (1) of Section 115BBC will not apply to donations like that has been received by Petitioner in donation boxes from numerous devotees, who have offered the offerings on account of respect, esteem, regard, reverence and their prayer for their deity/siddha peeth. Paragraphs 8, 9 and 10 of the order of ITAT read as under : “8. The assessee is running a temple of Lord Ayyappa and a community hall and there was no change in the aims and objects of the assessee in comparison to the earlier year. The Assessing Officer while framing the original assessment categorically stated that the activities of the assessee are charitable within the meaning of section 2(15) and there was no change in the aims and objects of the assessee as compared to the earlier years. The provisions of section 115BBC(1) are applicable for the anonymous donations received by any university or other educational institution or any hospital or any trust or institution referred to in sub-clauses (iiiad) or (vi) or (iiiae) or (via) or (iv) or (v) of clause (23C) of section 10. However, sub-section (2) of section 115BBC provides that the said provisions are not applicable to any anonymous donation received by any trust or institution created or established wholly for religious purposes. 9. In the instant case, the assessee is established for religious and charitable purposes and the anonymous donation was not received with specific direction that such donation is for any university or other educational institution, or any hospital or other medical institution run by the assessee-trust. Therefore, the Assessing Officer will not be justified in making the addition even by invoking the provisions of section 115BBC(1). To Strengthen our view, we relied on Hon'ble Delhi High Court in the matter of [2015] 62 taxmann.com 358 (Del.) CIT (E) v. Bhagwan Shree Laxmi Naraindham Trust, [2022] 143 taxmann.com 281 (Mum. - Trib.) DCIT v. Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

8/11 451-oswpl-35754-2023-J.doc Jayananad Religious Trust. 10. A careful reading of the entire section of section 115BBC reveals that the provisions have been meant to check the inflow of

black

money/unaccounted

money

into

the system/institutions such as universities, educational institutions, medical institutions, etc. and it has been provided that the record of the donor along with name and address etc. should be maintained. Sub-section (2) specifically excludes anonymous donations received by an institution which are other than any anonymous donations made with a direction that such donation is for university, medical institution etc. When we read clause (a) and clause (b) of sub-section (2) in harmony and in conscience with each other then it becomes clear that the provisions of sub-section (1) will not apply to the donations like that has been received by the assessee in donation boxes from numerous devotees who have offered the offerings on account of respect, esteem, regard, reference and their prayer for the deity/siddha peeth. Such type of offerings are made/put into the donation box by numerous visitors and its generally not possible for any such type of institutions to make and keep record of each of the donor with his name address etc. Even sometimes the donors out of their esteem, respect and regard and selflessness they do not want that their name be registered as a donor before the deity for whom they make the prayer in the belief that the deity is the ultimate giver of all the worth and virtues of their life. Now reverting to the definition of anonymous donations under sub-section (3) of section 115BBC, it is found that it has been mentioned that anonymous donations means voluntary contributions where the person receiving such contributions does not maintain a record of the identity indicating the name and address of the person making such contribution and charitable trust as in the case of the assessee. It is generally not only difficult but also not possible to maintain such type of record. A perusal of the entire section 115BBC shows that the provisions of said section are not applicable to the institutions like that of assessee-trust as the same are meant to check the inflow of unaccounted/black money into the system with a modus operandi to make out as a part of the accounts of the institutions like university, medical institutions where the problem relating to the receipt of capitation fees, etc. is generally highlighted. Under such circumstances, there is no justification on the part of the Commissioner (Appeals) in taxing the offerings received in the hundis/donation boxes as income of the assessee under section 115BBC.” 14. Therefore, the only task that was left for the AO, was to give the refund of the taxes paid. This is because the ITAT has held that there was no income chargeable to tax. We should also observe that it has not been even argued before the ITAT that Section 44AB of the Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

9/11 451-oswpl-35754-2023-J.doc Act was applicable or that the Form 10B was filed after the due date because we do not find any such submissions recorded in the order of ITAT. Notwithstanding this, the AO once again called upon Petitioner to furnish complete set of Form 10B and also to justify why the claim of exemption under Section 11 of the Act be allowed. Strangely, the AO, one Mr. Meet Kumar, who has also filed the affidavit-in-reply, has stressed upon the time limit specified under Section 44AB of the Act ignoring the fact that it was not even argued before the ITAT and it had already been accepted in the original assessment order dated 26th December 2019 that Petitioner was entitled to deductions/ exemptions under Section 11 of the Act. We find it rather unacceptable that the officer has tried to take shelter under a paragraph of the order of ITAT where the Tribunal has only narrated what was the order passed by the CIT(A). Though we would have wanted to make observations against the said officer, we exercised restraint in view of the request made by Ms. Gokhale. 15. The AO has also gone ahead to hold that Petitioner was not entitled to claim exemption under Section 11 of the Act and thereby reviewed the order. The ITAT having accepted Petitioner’s plea that for the assessment year in question, Petitioner’s total income should be computed as ‘Nil’, the only task before the AO was to issue refund to Petitioner of all taxes paid or recovered from Petitioner for AY 2017-2018. Since before the Hon’ble ITAT there was no controversy Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

10/11 451-oswpl-35754-2023-J.doc as regards the date of filing of return by Petitioner or Form 10B, the AO cannot, in the garb of giving effect to the order of ITAT, initiate a new controversy. 16. In the circumstances, in our view, the order giving effect dated 30th November 2023(impugned in the petition) has to be quashed and set aside. Ordered accordingly. 17. As observed in Credit Swiss Business Analysis (India) Pvt. Ltd. v. ACIT, Circle-15(1)(2), Mumbai 2 by ITAT, for determining the due taxes the AO should avoid bringing far-fetched fancies and ideas. Without understanding the basic philosophy of income tax, provisions are referred to so that any assessee can be taxed at any cost. It is not a fair or judicious approach to deal with the subjects of the State. 18. Ms. Gokhale, Counsel for the Department states that within two weeks an order giving effect by strictly complying with the order of ITAT and this Court shall be passed and within a further period of two weeks refund will be issued. We also note these are our directions as well. The Principal Commissioner of Income Tax shall assign this work to an officer other than Mr. Meet Kumar and shall also ensure that orders are complied with in the right perspective. 2. (2016) 72 taxmann.com 131. Gitalaxmi Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21

11/11 451-oswpl-35754-2023-J.doc 19. In these circumstances, Rule is made absolute in terms of prayer clause (a) as referred above. 20. Petition disposed. No order as to costs. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) Gitalaxmi GITALAXMI KRISHNA KOTAWADEKAR Digitally signed by GITALAXMI KRISHNA KOTAWADEKAR Date: 2024.02.23 17:25:24 +0545 Uploaded on - 23/02/2024 Downloaded on - 27/10/2026 21:48:21 Powered by TCPDF (www.tcpdf.org)