Dodda Ganapathi Mallikarjuna Swamy Devastana Vs ITO (ITAT Bangalore)
Temple Trust – eligibility u/s10(23BBA) is a mixed question of law & facts; Tribunal Clarifies Exemption Rules for Religious Institutions under Section 10(23BBA); Case Remanded as ITAT Finds CIT(A) Wrongly Denied Temple Exemption Under Section 10(23BBA)
The dispute concerned denial of exemption to a temple trust. CIT(A) had refused exemption u/s 10(23BBA) solely on the ground that Assessee had not filed its return of income, holding that filing of return was a pre-condition for claiming exemption.
Before the Tribunal, Assessee accepted that exemption u/s 11 was not applicable but contended that exemption u/s 10(23BBA) was fully available since the entity was a temple administered by trustees under the control of a statutory authority. It was argued that, as per CBDT Circular No. 4/2002 dated 16.07.2002, filing of a return is not mandatory for claiming exemption u/s 10(23BBA).
Tribunal held that the CIT(A)’s reasoning was legally incorrect because the CBDT Circular expressly clarifies that such institutions are not required to file returns for availing exemption. However, since the lower authorities had not verified whether the Assessee fulfilled other statutory conditions prescribed u/s 10(23BBA), the Tribunal remanded the matter to the AO for fresh verification of eligibility, directing that the claim be examined in light of the CBDT Circular after giving reasonable opportunity of hearing.
