Ujjaini Mahakali Devasthanam Vs ITO (ITAT Hyderabad)
192-Year-Old Government-Administered Temple – 607-Day Delay Condoned; Reopenings & 271B Penalties Remanded as AO Earlier Granted 10(23BBA) Exemption
In these six appeals—two against reassessment orders u/s 147 r.w.s.144 & four against penalties u/s 271B—the Assessee, a 192-year-old temple under the Telangana Endowments Act, explained a 607-day delay in filing appeals. Tribunal noted that the temple is administered entirely by the State Government, its PAN was wrongly created as “Firm,” & it was under a bona fide belief that its income is automatically exempt u/s 10(23BBA), as earlier accepted by the Department itself in the AY 2017-18 assessment order.
AO had taxed the entire bank deposits (Hundi collections) in the reopened years, & NFAC dismissed appeals ex-parte. Tribunal held that the belief in exemption was reasonable, the temple had no functional control over administration, & not condoning the delay would cause grave injustice—especially when the Department had itself granted 10(23BBA) exemption in a subsequent year. Delay was therefore condoned subject to ₹30,000 cost, directing deposit to PMNRF.
On merits, Tribunal found that AO/NFAC had passed ex-parte orders without examining the exemption claim, nature of donations, expenses, or corpus, despite clear contrary findings in AY 2017-18. Hence, Tribunal set aside all assessment orders for AYs 2015-16 & 2016-17 & remanded them to AO for fresh adjudication after proper opportunity.
