ITO Vs Arulmigu Madhurakaliamman Temple (ITAT Chennai)
Ancient Temple Not Taxed on Technicalities- Delay in Registration & Return Filing No Bar- ITAT Chennai Upholds Exemption u/s 11
Chennai ITAT dismissed Revenue’s appeal & upheld the order of CIT(A) granting benefit of exemption u/s 11 to the Assessee-temple, despite delay in obtaining registration u/s 12AA & non-filing of the return in time.
The Assessee, a temple carrying on religious activities for over 1000 years, had not filed its return for AY 2017-18. During demonetisation, it deposited cash of ₹45.70 lakh. The AO completed best judgment assessment u/s 144, denying exemption u/s 11 & 12, & added excess of income over expenditure at ₹1.83 crore on the ground that no return or audit report in Form 10BB was filed & registration u/s 12AA was not in place.
Before CIT(A), the Assessee contended that although registration u/s 12AA was obtained on 07.02.2020, the proviso to section 12A(2) should be read as retrospective in operation, since the objects of the trust remained unchanged. It relied on Delhi ITAT’s ruling in Sree Ramkrishna Samity. CIT(A) observed that section 12A(ba) (mandating filing of return within the due date for exemption) was inserted by Finance Act, 2017 w.e.f. 01.04.2018 & did not apply for AY 2017-18. Prior to that, the law did not specifically require timely filing of return as a condition for claiming exemption. CIT(A) therefore held AO’s denial unsustainable & directed fresh assessment after granting exemption u/s 11, exercising powers under proviso to section 251(1)(a) (effective from 01.10.2024) to set aside the ex-parte order u/s 144.
On Revenue’s appeal, ITAT held that since the assessment was ex-parte, CIT(A) rightly exercised his powers to set aside assessment & direct fresh adjudication. The Assessee, upon remand, could furnish audit report & supporting evidence to establish eligibility for exemption. Tribunal agreed with CIT(A) that AO’s denial of exemption was not supported by law for AY 2017-18, as the amended provision of section 12A(ba) was not applicable. Accordingly, ITAT upheld CIT(A)’s order & dismissed Revenue’s appeal.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
