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2021 (2) TMI 860 - HC - Income TaxExemption u/s 10(23BBA) - Exemption from income-tax in the case of statutory bodies or authorities for the administration of public religious or charitable trusts or endowments, etc. - whether the petitioner Devasthanams fall within the structure of Section 10(23BBA)? - devasthanams had made cash deposits - non filing of return of income - HELD THAT:- The Sri Vaithiyanathaswamy Devasthanam was under the supervision and administration of the British till, in 1842, its management was handed over to the Pandarasannadhi of Dharmapuram Adheenam, who has been managing the same since then, through a Kattalai Thambiran. The handing over is pursuant to the enactment of the Religious Endowments Act, 1863. The scheme sets out a framework for governance and administration of the assets and receipts of the devasthanam and constituent temples by the Pandarasannadhi, who was named as trustee. Suffice it to say that the Supreme Court set aside the appointment of the Executive Officer confirming the scheme as framed originally. Thus, the temples, endowments and charities comprising the Vaithiyanathaswamy or Velur Devasthanam continue to be administered and managed till date by a Kattalai Thambiran appointed periodically by the Pandarasannathi in his capacity as trustee under a scheme of administration framed in a scheme suit filed under Section 92 of the Civil Procedure Code 1908 in line with the provisions of the Madras Hindu Religious & Charitable Endowment Act, 1951 (‘1951 Act’) and its precursor enactments, in the year 1919. In light of the above facts, the requirements of Section 10(23BBA) appear to be satisfied in this case (i) the body or authority being the Devasthanam, (ii) the required enactments being the Civil Procedure Code 1909 (Central) and the Madras Hindu Religious & Charitable Endowment Act, 1951 (State) and precursor State enactments (iii) the devasthanam holding within its fold several constituent temples as detailed in paragraph 2 of this order. The argument of the Sri Amirthakadeswaraswamy Devasthanam to the effect that it should be deemed to have been constituted under the 1863 Central Act is, in my view, not liable to be accepted as the link is too circuitous and indirect. While one could take a purposive view on the meaning of ‘established, constituted or appointed’ in Section 10(23BBA), the object and spirit of the provision is to bifurcate the managerial entity from the temple/religious establishment that it manages, in order that the roles, functions and two income-generating apparatus, are clearly demarcated. This is not possible in the absence of a scheme as there is no clarity on the bifurcation of assets or functions. The intention of the exemption under Section 10(23BBA) is to benefit only those entities whose role is managerial or administrative and not commercial, engaged with the purpose of income generation. In the case of the Sri Vaithyanathaswamy devasthanamhe role of the Pandara Sannidhi is as a trustee, and that of the Kattalai Thambiran is as a Manager. All incomes earned by the constituent temples vest in the respective deities. Thus, the apparent division of roles enables the grant of exemption to the managerial entity leaving the constituent temples to bear the brunt of taxation, subject to any claim for exemption that may be made by the latter, to be considered in accordance with law. This enabling feature is absent in the case of the Sri Amithakadeswaraswamy devasthanam and for this reason, we reject its arguments. As regards the argument of the revenue to the effect that ‘body’ or ‘authority’ referred to in Section 10 (23BBA) would be the HR&CE Board, this argument is misconceived as the Hindu Religious and Charitable Endowments Department constitutes an arm of the State Government which is, in any event, not liable to tax. The reference in Section 10 (23BBA) to ‘body’ or ‘authority’ cannot thus be the HR&CE Department but an independent authority constituted under a Central, State or Provincial Act. The argument that the Central Wakf Board is equitable to the HR&CE department is rejected. Petition relating to Vaithyanathaswamy Devasthanam is allowed, but it is made clear that the individual constituent temples, endowments and charities are liable to tax in the light of the proviso to Section 10(23BBA). It is open to the income–tax authorities to proceed accordingly qua the constituents of the devasthanam, in accordance with law. Petition relating to Sri Amirthakadeswarasamy Devasthanam is dismissed.
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