ITO (EXEMPTIONS), WARD-1(4), HYDERABAD vs. SRI VEERABHADRA SWAMY TEMPLE, WARANGAL

PDF · subscribers
ITA 1213/HYD/2024Status: DisposedITAT Hyderabad03 June 2025AY 2016-17Bench: SHRI VIJAY PAL RAO (Vice President), SHRI MADHUSUDAN SAWDIA (Accountant Member)9 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal, while noting that res judicata does not apply to income tax proceedings, upheld the principle of consistency. It ruled that since the revenue had accepted the assessee's exemption under Section 10(23BBA) for A.Y. 2019-20, and no change in facts or law was shown, a consistent approach should be adopted for A.Y. 2016-17. Therefore, the CIT(A)'s order allowing the exemption was confirmed, and the revenue's appeal was dismissed.

What were the facts?

The assessee, Sri Veerabhadra Swamy Temple, did not file its Return of Income for A.Y. 2016-17. The AO, noticing large cash deposits, reopened the assessment and treated the deposits as unexplained income under Section 69, denying exemption under Section 10(23BBA). The CIT(A) deleted the addition, allowing the exemption by relying on the fact that the AO had granted the same exemption for A.Y. 2019-20, leading the revenue to appeal.

What were the issues?

1. Whether the assessee, a temple, is eligible for exemption under Section 10(23BBA) of the Income Tax Act. 2. Whether the principle of consistency applies in tax proceedings when the facts and law are identical across assessment years, despite the non-applicability of res judicata.

Which sections of the Income-tax Act were involved?

Section 10(23BBA),Section 69,Section 133(6),Section 139,Section 142(1),Section 143(2),Section 144,Section 144B,Section 147,Section 148,Section 148A,Section 148A(d)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad

Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA

Hearing: 06/05/2025

(निर्धारण वर्ा/Assessment Year:2016-17) Income Tax Officer (Exemptions), Sri Veerabhadra Swamy Temple, Ward-1(4), Hyderabad. Vs. Warangal. PAN:AADAS5109E (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri K.V. Chalamaiah, C.A. रधजस् व द्वधरध/Revenue by: Shri Rahul Singhania, SR-DR सुिवधई की तधरीख/Date of hearing: 06/05/2025 घोर्णध की तधरीख/Pronouncement: 03/06/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by the revenue in the case of Sri Veerabhadra Swami Temple (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 19.09.2024 for the A.Y. 2016-17.

2.

The revenue has raised the following grounds of appeal :

“1. The order of the Ld.CIT(A) is erroneous both on facts and in law.

2. The Ld.CIT(A) erred in not considering the fact that section 10(23BBA) clearly distinguishes between the 'bodies' that manage the temples and the temples themselves'. While it specifically exempts the income of any trust, endowment or society etc that are managing the religious places such as temples from tax exemption, it categorically states that the religious places themselves, i.e temples etc are themselves not exempted from taxation.

3. The Ld.CIT(A) erred in not appreciating the fact that the principle of res judicata does not apply to income tax proceedings and each year's assessment is final only for that year and does not govern later years, as observed by the Hon'ble Supreme court in the case of New jehangir Vakil Mills Co Ltd Vs CIT; [1963] 49 ITR 137 (SC)(full bench). The Ld.CIT(A) erred in placing basis on the assessment order of the assessee for the A.Y 2019-20- where AO has accepted the exemption claim u/s 10(23BBA)- in arriving at the decision for the present year.

4. The Ld.CIT(A) erred in placing reliance on the Judgments of Hon'ble High Court of Kerala in the case of Payyanur Sree Subrahmanya Swami Temple v. ITO (W.P. (C) No. 8524 of 2019) and the judgment of Honourable Rajasthan High Court, in the case of CIT v. Bade Mathureshji Temple Board and gave relief to the assessee without appreciating the fact that, the facts and circumstances of the above cases are different from the present assessee's case.

5.

Any other ground that may be urged at the time to time of hearing of the case.”

3.

The brief facts of the case are that the assessee is a temple, did not file any Return of Income (“ROI”) for A.Y. 2016-17. Based on information of large cash deposits, a notice u/s.148 of the Income Tax Act, 1961 (“the Act”) was issued by the Learned Assessing Officer (“Ld. AO") on 31.03.2021 to the assessee. Subsequently, several other notices u/s.142(1) of the Act and show cause notice were also issued to the assessee. However, the assessee did not respond to any of the notices during the assessment proceedings. The Ld. AO, based on information collected u/s.133(6) of the Act, found that the assessee had deposited cash of Rs.1,88,88,326/- in its bank account with Andhra Pradesh Grameen Vikas Bank, Korivi, Mahabubabad. In absence of any explanation from the assessee, the Ld. AO treated the cash deposits as unexplained income u/s. 69 of the Act and completed the assessment u/s.147 r.w.s. 144 on 31.03.2022, determining the total income of the assessee at Rs.1,88,88,326/-.

4.

Aggrieved with the order of Learned Assessing Officer (“Ld. AO”), the assessee filed appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee claimed that the income of the assessee is exempted u/s.10(23BBA) of the Act. The Ld. CIT(A) accepted the claim of the assessee and deleted the addition made by the Ld. AO.

5. Aggrieved with the order of Ld. CIT(A), the revenue is in appeal before us. The Learned Department Representative (“Ld. DR”) submitted that, the Ld. CIT(A) allowed the exemption u/s.10(23BBA) of the Act to the assessee on the ground that, the Ld. AO has allowed the same to the assessee for A.Y. 2019- 20, without considering the facts that the principle of res judicata is not applicable to the income tax proceedings. He further submitted that, section 10(23BBA) of the Act grants exemption only to statutory bodies or authorities constituted under law for the administration of public religious or charitable trusts, and not directly to individual temples. Since the assessee is not an authority or body in accordance with the provisions of section 10(23BBA) of the Act, exemption u/s.10(23BBA) cannot be granted to the assessee. In support of their submission, the Ld. DR placed reliance on the decision of Hon'ble Madras High Court in the case of M/s. Sri Amirthakadeswaraswamy Devasthanam Dharumapuram Adheenam Vs. ACIT & Others (W.P. No.29315 of 2019 pronounced on 18.02.2021). It was accordingly submitted that, the order of Ld. CIT(A) is liable to be set aside.

6.

Per contra, the Learned Authorised Representative (“Ld. AR”) invited our attention to page nos.8 to 12 of the paper book and submitted that, the assessee is registered under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowment Act, 1987 and has been issued a certificate u/s.43(1) of the said action. He also submitted that, all the assets and income of the assessee are under the supervision and control of Endowment Department of the state government. Hence, the assessee is eligible for exemption u/s.10(23BBA) of the Act. The Ld. AR further invited our attention to the assessment order for A.Y. 2019-20 placed at page nos.1 to 3 of the paper book and submitted that, the Ld. AO has accepted the claim of the assessee u/s.10(23BBA) of the Act vide assessment order dated 26.02.2024. Therefore, on the principle of consistency, the exemption cannot be denied for the A.Y. 2016-17 in the absence of any change in facts or law.

7.

We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through the assessment order for A.Y. 2019-20 in the case of the assessee, placed at page nos.1 to 3 of the paper book, which is to the following effect :

---- Space left intentionally---- 7.1 On perusal of above, we found that after going through the submission filed by the assessee, the Ld. AO has allowed the exemption u/s.10(23BBA) of the Act to the assessee for A.Y. 2019-20 vide his order dated 26.02.2024. It is undisputed that the order for A.Y. 2016-17 was an ex-party order and the Ld.

AO could not adjudicate on the issue of allowability of exemption u/s 10(23BBA) of the Act to the assessee. However for A.Y. 2019-20 the Ld. AO has allowed the exemption u/s.10(23BBA) of the Act to the assessee for A.Y. 2019-20 after going through the submission filed by the assessee. The facts and legal provision applicable to A.Y. 2016-17 and A.Y. 2019-20 are claimed to be identical by the assessee. Further, no distinguishable material with regard to any change in facts or law has been brought to our notice by the revenue. We are in agreement with the contention of the revenue, that principle of resjudicata is not applicable to the income tax proceedings. But when there is no changes in facts or law, a consistent approach should be adopted by the revenue. Accordingly, when the revenue has accepted a particular view for A.Y. 2019-20, it is not allowed to take a different view for A.Y. 2016-17. Therefore, when the Ld. AO has allowed the exemption u/s.10(23BBA) of the Act to assessee for A.Y. 2019-20, we do not find any reason to interfere with the impugned order of Ld. CIT(A) allowing the exemption u/s.10(23BBA) of the Act for A.Y. 2016-17. Therefore, we allow the exemption u/s.10(23BBA) of the Act for A.Y. 2016-17 to the assessee.

Accordingly, the appeal filed by the revenue is dismissed.

In the result, the appeal filed by the revenue is dismissed. 8.

More judgments on Section 10(23BBA)

All 26 judgments and leading authorities on Section 10(23BBA) →

Recent GST High Court judgments

Search GST case law →