DY. COMMISSIONER OF INCOME TAX(EXEMPTIONS)-2(1),MUMBAI, MUMBAI vs. SHREE KASHI MATH SAMSTHAN VARANASI, MUMBAI

आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 30.12.2024 is filed by the Revenue against the order passed by the Learned Commissioner of Income-tax, Appeal/ADDL/JCIT(A)-4, Chennai [hereinafter referred to as “CIT(A)”] pertaining to assessment order u/s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 15.12.2019 as passed by the ACIT, Exem., Circle-2, Mumbai for the Assessment Year [A.Y.] 2017-18.

are as under:-

2. Whether on the facts and circumstances of the case and in law, the NFAC has erred in holding that by specifying on the Hundi that the Kanika would be for corpus of the Samsthan, ignoring the fact that the such mentioning by the assessee trust does not satisfy the conditions mentioned u/s 11(1)(d) of the Act.

3. Whether on the facts and circumstances of the case and in law, the NFAC has erred in allowing the donation of Rs. 84,32,908/-under head ‘moolnidhi’ as corpus donation u/s 11(1)(d) of the I.T. Act, ignoring the fact that the assessee trust had failed to substantiate that the donations are received with specific directions from the donor.

4. Whether on the facts and circumstances of the case and in law, the NFAC has erred in holding that the offerings made by the devotees are made in specific platter and is specifically kept for ‘moolnidhi’ i.e. corpus, ignoring the fact that the such mentioning by the assessee trust does not satisfy the conditions mentioned u/s 11(1)(d) of the Act.

3. Facts of the case are that the assessee Trust, is an ancient Religious Institution which is registered under Section 12A of the Act and also approved u/s 10(23c)(v).For the relevant year the assessee had returned Nil income. By his order the ld. AO treated the sum of Rs 2,58,83,109/-, being ‘Padapooja Kanika’ and ‘Hundi Kanika’ claimed as donation by the assessee towards corpus as normal donation and added to gross income denying exemption u/s 11(1)(d) of the Act.

4. Ground nos.1 and 2 pertain to the donations received by way of HUNDI KANIKA of Rs.1,74,50,201/- which was treated as income on the ground that the letters of the donors with specific direction for corpus donation were not in the possession of the assessee. In the subsequent appeal before the ld.CIT(A), the assessee submitted that since the number of devotees are huge and they are visiting the Maths to seek to fulfil their aspirations, it is impracticable to obtain details from each devotee. Hence, it is clearly written on the Hundi in which Kanikas were/are offered by the devotees that the donation that is made is towards the Corpus of the Samsthan. It was observed that Hundi kanika are basically the offerings made by the devotees to Hundi. Usually, a hundi is kept in the temple premises with closed surface wherein the devotees can come and offer their money into it. In this process, as claimed by the assessee, it is highly impractical to obtain the details of each of the devotee as pointed out by the AO. Since it had furnished details that it has been specified on the Hundi that the Kanika would be for the Corpus of the Samsthan, it is implicit that when kanika was collected from a devotee he was appraised of the object for which such kanika was being donated by him and unmistakably indicated that it is his specific direction and his desire that his offering shall form part of the Corpus. Further, it was also stated that these voluntary contributions specifically offered by the devotees in Hundi, by tradition and practice, have been treated by the Samsthan as donation to the corpus for all these years and the Income Tax Department has also accepted this stand for all the earlier years. Considering these facts and case laws relied on by the assessee, the addition made in this regard was deleted by the ld.CIT(A).

5. Before us, the assessee reiterated the same submission as before the ld.CIT(A). It is stated that the Branch Maths of Shree Kashi Math Samsthan, Varanasi are bound to keep at least one Hundi in front of the Deity for Mooladhana Kanike (Corpus Donation), for utilizing the said Kanike (Corpus Donation) amount for capital expenditure and major periodical and non-recurring expenditure. This is warranted in terms of the custom and usage, prevailing in the Samsthan, from time immemorial. As per the customs and traditions followed by the Samsthan, the Math is bound to conduct at periodical intervals various religious rituals like Homa, Havana and different poojas etc. to meet the spiritual requirements of the Math and the devotees. Repairs and maintenance of building, various ornaments, Vahana such as Pallike (Palanquin), Ratha (Chariot) etc and various rituals followed are also required to be conducted. These rituals/ repairs etc., require huge expenditure and they are not part of the daily rituals/repairs of the Branch Maths. So, the system of keeping Hundis in Maths, as dictated by the wisdom of our revered senior Gurus in the Guru Parampara, who prescribed for providing of Mooladhana Hundi (Corpus Fund Hundi) has been in vogue from the earliest times. Accordingly, such Hundis are kept in the Maths. Further, since the number of devotees are huge and they are visiting the Maths to seek to fulfil their aspirations, it is impracticable to obtain details from each devotee. Hence, it is clearly written on the Hundi in which Kanikas were offered by the devotees, that the donation that is made is towards the Corpus of the Samsthan. A few sample copies of the photographs which were shown to the AO were furnished which shows the system prevailing in the Samsthan. Since, it has been specified on the Hundi that the Kanika would be for the Corpus of the Samsthan, it is implicit that when kanika was collected from a devotee he was appraised of the object for which such kanika was being donated by him. Otherwise, he has alternative options to give his offerings as Guru Kanika, Deity Kanika, Seva Kanika, General Donations etc. This act of the donor of putting the contribution to the Hundi where it is stated that it is towards Corpus, unmistakably indicates that it is his specific direction and his desire that his offering shall form part of the Corpus. These Hundis are opened periodically in the presence of the two independent witnesses by the Vyavasthapak Committee members. At the time of opening of Hundi Box, the proceedings are recorded and signed by all the members present, accordingly the same has been properly recorded in the books of accounts and is banked on the immediate next available opportunity. 5.1 It is further stated that the manner in which specific direction is to be made for Corpus Donation has not been laid down in the Act or in the Income Tax Rules, 1962. There is no method or mode prescribed by law of giving such directions. These voluntary contributions specifically offered by the Devotees in Hundi, by tradition and practice, have been treated by the Samsthan as donation to the corpus for all these years and the Department has also accepted this stand for all the earlier years. There is no reason as to why the same should be taken as taxable income for this year when there is no change either in the objects or in the system of accounting or in the treatment of donation as compared to earlier years. There has been no change in facts and the treatment in accounts being consistently followed over years and accepted by the Department. Reliance is placed on AddI/JCIT(Appeals)-1, Chandigarh dated 25.11.2024, order No.ITBA/APL/S/250/2024-25/1070610590(1),CIT vs. Bhartiya Samskriti Vidyapith Trust to 282/ Bangalore/2013 dt. 13.11.2013(Kar), ITAT Mumbai Bench (SMC III) in the case of ITO Vs Diamond Jubilee Trust and 1956(MUM) of 1998, March 5, 2001 (2002 120 Taxmann 86 (MUM.) (MAG.), ITAT Agra Bench in the case of ITO (Exemptions), Agra Vs M/s Shri Girraj Sewak Samiti, Danghati, Goverdhn Mathura to 33/Agra/2017 dt. 09.03.2018,Hbl. ITAT Chandigarh Bench in the case of Shree Mahadevi Tirath Sharda Ma Seva Sangh Vs ITO 133 TTJ (UO) 157 (Chd).

7. Ground nos.3 and 4 relate to similar donation known as PADAPOOJA KANIKA Rs.84,32,908/-which was also treated as income u/s 11(1)(d) of the Act by the AO. In the subsequent appeal, the assessee submitted before the ld.CI(A) that the offerings for the Padapooja are made by the devotees in a big platter specifically kept for contributing towards “Moolanidhi” i.e. Corpus Fund, of the Samsthan which is a capital receipt. The said amount has been taken as donation towards the Corpus of Shree Samsthan and accordingly recorded in the books of accounts. The ld.CIT(A) observed that padapooja kanika are the offerings made to the Swamiji of the temple by the devotees when they visit the temples. As stated by the appellant, it is noted that on the platter in which Padapooja Kanika is offered it is clearly written that the donation is made towards the Moolanidhi i.e. Corpus of the Samsthan. Since, the number of Devotees are huge and they are visiting Swamiji to seek to fulfill their aspirations, it is impracticable to obtain letter from each Devotee. This act of the donor of putting the contribution to the Platter where it is stated that it is towards Corpus, unmistakably indicates that it is his specific direction and his desire that his offering shall form part of the Corpus. Further it is also noted that the manner in which specific direction is to be made for Corpus Donation has not been laid down in the Act. Further, these voluntary contributions specifically offered by the Devotees as paadapooja kanika, by tradition and practice, have been treated by the Samsthan as donation to the corpus for all these years and the Department has also accepted this stand for all the earlier years. Hence, considering these facts and case laws relied on by the assessee, the addition made in this regard was deleted by the ld.CIT(A).

8.1 It is further stated that the manner in which specific direction is to be made for Corpus Donation has not been laid down in the Act or in the Income Tax Rules, 1962. There is no method or mode prescribed by law of giving such directions. These voluntary contributions specifically offered by the devotees, by tradition and practice towards the corpus of the Samsthan, have been treated by the Samsthan as donation to the corpus for all these years and also the Income Tax Department has also accepted this stand for all the earlier years. There is no reason as to why the same should be taken as Taxable Income for this year. There has been no change in facts and the treatment in accounts being consistently followed over years and accepted by the Department. He has placed on reliance on several case laws which are already discussed in para 5 (supra) while adjudicating ground nos.1 and 2.

8.2 It is also submitted further that in own case of the assessee for the A.Y. 2015-16 order u/s.250 passed by the AddI/JCIT (A)-1, Chandigarh in which donation received towards corpus for the said purpose has been considered and also in the order u/s 250 passed by the Addl/JCIT(Appeals)-4, Chennai dated 30.12.2024 and subsequent years orders being completed under section 143(3) without making additions to the said issues. This proves that the Department has accepted the manner in which the donations have been treated consistently over the years. It is contented that in view of the Supreme Court decision in the case of Radhasoami Satsang Vs. CIT 193 (ITR) 321, the matter should be allowed in the favour of the Respondent and the Department appeal be dismissed.