2020 (3) TMI 344 - HC - Income Tax

Exemption envisaged u/s 10 (23C) (v) - The respondent being aware of this did not apply for approval under Section 10 (23C) (v) for the Assessment Year 2015- 2016 by September 2015 as required under Section 10 (23C). The respondent filed an application for exemption later in the year 2016. - ITAT allowed the benefit of exemption for the AY 20105-16 also - HELD THAT - There is no question of law arising for consideration as the appeal is devoid of merits. However, liberty is given to the Department to proceed against the trustees and committee members dealing with administration and the monies of the temple for the mismanagement and misappropriation leading to loss of public monies and the Government revenue, if any.

Summary

Issues:
1. Exemption under Section 10 (23C) (v) of the Income Tax Act, 1961 for a Hindu temple.
2. Failure to apply for approval under Section 10 (23C) for the Assessment Year 2015-2016.
3. Appeal against the order of the Income Tax Appellate Tribunal.
4. Consideration of mismanagement and misappropriation leading to loss of public monies.

Analysis:

1. The case involved the respondent, a Hindu temple managed by the Hindu Religious and Endowment Department of the Government of Tamil Nadu, seeking exemption under Section 10 (23C) (v) of the Income Tax Act, 1961, which exempts income received by trusts or institutions operating for religious or charitable purposes from income tax calculation. The approval for exemption was granted through a government notification and required renewal. The respondent failed to apply for approval for the Assessment Year 2015-2016 in time, resulting in the income being liable for tax.

2. The respondent filed a belated application for exemption in 2016, which was granted by the appellant effective from the assessment year 2016-2017 onwards. However, since the application for the Assessment Year 2015-2016 was not submitted within the specified timeframe, the exemption could not be granted for that year, making the income taxable. The appellant's order was subsequently modified, leading to a challenge by the respondent before the Income Tax Appellate Tribunal.

3. The Income Tax Appellate Tribunal allowed the respondent's appeal against the appellant's order, prompting the appellant to file the present appeal before the High Court. The High Court, after hearing arguments from both sides, found no question of law for consideration in the appeal, dismissing it but granting liberty to the Department to take action against the trustees and committee members for mismanagement and misappropriation causing loss of public monies and government revenue.

4. In conclusion, the High Court dismissed the appeal with no costs, emphasizing the lack of merit in the appeal while highlighting the possibility of action against those responsible for mismanagement and misappropriation within the temple administration.