Background
Finance Act, 1979
Exemption from income-tax in the
case of statutory bodies or authorities for the administration of public
religious or charitable trusts or endowments, etc. - Section 10(23BBA)
9.1
Section 9 of the Wakfs Act, 1954 provides for the establishment of the Board of
Wakfs for each State for the general superintendence of all wakfs in that
State. Section 8A of the Wakfs Act provides for the establishment of the
Central Wakf Council for the purpose of advising the Central Government on
matters concerning the working of State Wakf Boards and due administration of
the wakfs. In the cases of public religious or charitable trusts or endowments
of other communities, there are similar bodies set up under enactments in force
in different States. These bodies or authorities set up by or under the
Central, State or Provincial Acts are entrusted with the administration of
public religious or charitable trusts within their jurisdiction. These public
religious or charitable trusts also cover temples, maths, masjids, churches,
synagogues, agiaries and other places of public religious worship, other
religious and charitable endowments, as also societies formed for religious or
charitable purposes under the Societies Registration Act, 1860. Such bodies or
authorities, during the course of administration of such trusts or
institutions, are at times in receipt of income chargeable to tax. Since these
bodies or authorities do not carry on any activity for profit, the Finance Act,
1979 has inserted a new clause (23BBA) in section 10 to grant exemption in
respect of income arising to any body or authority established, constituted or
appointed under any enactment for the administration of such public religious
or charitable trusts or endowments or societies for religious or charitable
purposes. It has been specifically provided that the exemption under the new
clause would not apply to the income of the trust, endowment or society and
accordingly the tax treatment of the income thereof will continue to be
governed by the other provisions of the Income-tax Act.
9.2 This
provision has been made with retrospective effect from 01.04.1962, i.e., from
the commencement of the Income-tax Act, 1961.
Text
of Section 10(23BBA)
[1][10(23BBA).
any income of any body or authority (whether or not a
body corporate or corporation sole) established, constituted or appointed by
or under any Central, State or Provincial Act which provides for the
administration of any one or more of the following, that is to say, public
religious or charitable trusts or endowments (including maths, temples,
gurdwaras, wakfs, churches, synagogues, agiaries or other places of public
religious worship) or societies for religious or charitable purposes
registered as such under the Societies Registration Act, 1860 (21 of 1860), or
any other law for the time being in force:
PROVIDED that nothing in this clause shall be
construed to exempt from tax the income of any trust, endowment or society
referred to therein;]
KEY NOTE
1. Inserted by the Finance Act, 1979, with
retrospective effect from 01.04.1962.
Categories of assesses to whom
the exemption is available
The body
/ authority, which is established or appointed or constituted under any Central
or State or Provincial Act, are the specified categories of assessee eligible
for exemption under section 10(23BBA) of the Income Tax Act.
Conditions for Exemption
Any
income of the specified categories of the assessee which provides
administration of any of the following-
§
Public,
religious or charitable trust; or
§
Endowments
(including temples; Maths; wakfs; churches; gurdwaras; or other places of
public religious worship); or
§
Societies
for charitable or religious purposes (registered under the Societies
Registration Act, 1860, or any other law for the time being in force).
It is
very important to note here that exemption available under section 10(23BBA)
does not apply to the income of any such trust or endowments or societies.
Amount of exemption available
The
entire amount which qualifies for exemption under section 10(23BBA) is
available as an exemption. There is no upper limit prescribed under the Act.
Posted On: 15 JUL 2019 6 : 51PM by PIB Delhi [Ministry of Education]
Government of India is running
Seva Bhoj Yojana for providing assistance to charitable religious institutions
for serving free food to public - Culture Minister
Seva Bhoj
Yojna is a Central Sector Scheme for providing reimbursement of CGST and
Central Government’s share of IGST paid by charitable/religious institutions on
purchase of specific raw food items for serving free food to public / devotees.
The
specific raw food items covered under the Scheme are (i) Ghee (ii) Edible Oil
(iii) Sugar/Burra/Jaggery (iv) Rice (v) Atta/Maida/Rava/Flour and (vi) Pulses.
Under the
scheme of Seva Bhoj Yojna, the financial assistance will be provided for free
‘prasad’ or free food or free ‘langar’ / ‘bhandara’ (community kitchen) offered
by charitable/religious institutions like Gurudwara, Temples, Dharmik Ashram,
Mosques, Dargah, Church, Math, Monasteries etc.
These
Charitable Religious Institutions should have been distributing free food in
the form of ‘prasad’, ‘langar’/bhandara (community kitchen) to at least 5000
persons in a calendar month for at least past 3 years.
Criteria
for financial assistance:
(i) A Public Trust or society or body corporate,
or organisation or institution covered under the provisions of section 10
(23BBA) of the Income Tax Act, 1961 (as amended from time to time) or
registered under the provisions of section 12AA of the Income Tax Act, 1961,
for charitable/religious purposes, or a company formed and registered under the
provisions of section 8 of the Companies Act, 2013 or section 25 of the
Companies Act, 1956, as the case may be, for charitable/ religious purposes, or
a Public Trust registered as such for charitable/religious purposes under any
Law for the time being in force, or a society registered under the Societies
Registration Act, 1860, for charitable/religious purposes can apply under Seva
Bhoj Yojna.
(ii) The applicant Public Trust or society or body
corporate, or organisation or institution, as the case may be, must be involved
in charitable/religious activities by way of free and philanthropic
distribution of food/prasad/langar (Community Kitchen)/ bhandara free of cost
and without discrimination through the modus of public, charitable/religious
trusts or endowments including maths, temples, gurdwaras, wakfs, churches,
synagogues, agiaries or other places of public religious worship.
(iii) The
institutions/organizations should have been distributing free food, langar and
prasad to atleast 5000 persons in a calendar month can apply under the scheme.
(iv) Financial Assistance under
the scheme shall be given only to those institutions which are not in receipt
of any Financial Assistance from the Central/State Government for the purpose
of distributing free food.
(v) The Institution/Organization blacklisted
under the provisions of Foreign Contribution Regulation Act (FCRA) or under the
provisions of any Act/Rules of the Central/State shall not be eligible for
financial assistance under the scheme.
Quantum
of assistance:
Financial
Assistance in the form of reimbursement shall be provided where the institution
has already paid GST on all or any of the raw food items listed below:
(i) Ghee
(ii) Edible oil
(iii) Sugar / Burra / Jaggery
(iv) Rice
(v) Atta / Maida / Rava /Flour
(vi) Pulses
NOTE
This
information was given by the Minister of State (I/c) of Culture and Tourism,
Shri Prahlad Singh Patel in a written reply in the Lok Sabha today.
Exemption under section 10(23BBA)
is applicable only to income of administrative body or authority
constituted/appointed under Endowment Act and not to income of temple or
endowment it manages
Assessee
was a temple managed by the Endowment Commissioner under the Telangana
Charitable and Hindu Religious Institutions and Endowments Act, 1987. It did
not file return of income or the audit report in Form 10B and claimed that its
income was exempt under section 10(23BBA), as it was managed by a Government
authority, and alternatively, under sections 11 and 12. The Assessing Officer
rejected the claim and held that the exemption under section 10(23BBA) was not available
to the temple itself. On appeal, the Commissioner (Appeals) held that the
temple was not eligible under section 10(23BBA) and, due to non-filing of
return and audit report, also not entitled to exemption under sections 11 and
12. On the assessee's appeal to the Tribunal:
Held : In the case in hand, no doubt the administration of
the assessee temple is given to the Administrator appointed by the State Govt.
under the Telangana Charitable & Hindi Religious Institutions Endowment
Act, 1987, in short, 'Endowment Act'. Therefore, the income of the said
administrative body or authority is exempted under section 10(23BBA) and not
the income of the temple or trust which is administered by the said authority.
The proviso to this section makes it clear that nothing in this clause shall be
construed to exempt from the tax income of any Trust/Endowment or Society referred
to in the said clause. Therefore, the Legislature has made it clear without any
ambiguity that only the income of the authority appointed for administering the
temple/trust or endowment or society as referred in the said clause is exempt
and not the income of the Trust/Endowment or Society itself. The provisions of
section 10(23BBA) are not applicable on the income of the assessee temple but
this provision is applicable only on the income of the administrative body or
authority constituted/appointed under the Endowment Act.
The learned DR has submitted that the provisions of section
10(23BBA) of the Act are not applicable to the temple itself/endowment temples.
In support of his contention, he has relied upon the judgment of the Hon'ble
Madras High Court in the case of Sri Amirthakadeswaraswamy
Devasthanam Dharumapauram Adheenam v. ACIT in [W.P. Nos. 29312 & 29315 of 2019 & WMP. Nos.
29115 & 29111 of 2019 & 2325 of 2020 WP.No.29312 of 2019 dated 18.02.2021]
and submitted that the Hon'ble High Court has held that the exemption is
extended to those bodies or authorities set up under the Central/State Govt. or
provincial Acts that are entrusted with the administration of public religious
and charitable trust/endowment that included within their ambit viz., Temples/Math/Waqf/Churches/ Synagogue/Agiaries and
other placed of public religious worship. The Hon'ble High Court has further
observed that these overseeing authorities are constituted only to administer
or manage the affairs of religious and charitable endowments vested in them and
do not engage in any commercial activities and therefore, any income that may
arise or accrue to them would not bear the nature of the taxable income for the
purpose of income tax Act. Thus, the learned DR has submitted that the assessee
temple is not entitled for the benefit of section 10(23BBA) of the Income Tax
Act, 1961 and liable to tax.
Accordingly, the provisions of section 10(23BBA) are
applicable only on the income of the body or authority established, constituted
or appointed by the State Govt. or the Central Govt. under the Central or State
or Provincial Act for administration of public religious or charitable trust or
endowments and not on the income of the Endowment i.e. Mosque/Temples/Church/Gurudwara etc., The amount paid
to the administrative authority or body as constituted under the Act is
certainly a statutory obligation on the part of the temple to pay such amount
as per the provisions of the Act and to that extent, the same will be excluded
from the income of the assessee temple for the purpose of computation of total
income. Even otherwise, the public religious trusts or temples are eligible for
registration under section 12A or 12AA and consequently, the benefit of
sections 11 and 12 and therefore, the provisions of section 10(23BBA) are not
applicable to these Trusts/Temples. Respectfully following the judgment
of the Hon'ble Madras High Court in the case of Sri Amirthakadeswaraswamy Devasthanam Dharumapouram Adheenam v. ACIT (supra), we hold that the provisions of section 10(23BBA) are
not applicable on the income of the assessee temple but this provision is
applicable only on the income of the administrative body or authority
constituted/appointed under the Endowment Act. [In favour of revenue] (Related Assessment years : 2013-14
and 2016-17) - [Venkateswara Swamy
Devasthanam v. ITO(Exemption) [2025] 176 taxmann.com 183 (ITAT Hyderabad)]
Denial of registration was not
valid on the ground that the assessee has wrongly claimed exemption under
sections 10(23BBA) and 10(23C)(v) - Registration under section 12AA was not
dependent either upon section 10(23BBA) or 10(23C)(v) - Directed to consider
application under section 80G for approval afresh
Assessee-society,
engaged in carrying of charitable and religious activity, filed an application
seeking registration under section 12A. CIT (E) rejected the exemption on
grounds that; firstly, assessee had without any approval wrongly claimed
deduction under sections 10(23BBA) and 10(23C)(v); secondly, assessee could not
explain source of investment made in construction of a new building and ;
thirdly, assessee had received corpus donation in absence of registration under
section 12AA Held that wrong claim of
exemption under sections 10(23BBA) and 10(23C)(v) would not debar assessee from
getting registration under section 12AA as registration under section 12AA was
not dependent either upon section 10(23BBA) or 10(23C)(v). In response to query raised regarding
investment in construction of building, assessee had furnished supporting
evidence to explain such source. Receipt of corpus donation in absence of
registration under section 12AA should not cloud vision of Commissioner (E) at
stage of granting registration under section 12AA. There was nothing on record
to suggest that either activities of assessee-society were not genuine or
objects were not of charitable or religious nature. On facts the Tribunal
directed the CIT (E) to grant registration. Fact that authority
concerned was directed to grant registration under section 12AA to assessee,
matter was to be remanded back to Commissioner (E) for considering assessee’s
application under section 80G for
approval afresh.- [Sanatan Dharam Sabha
v. CIT (2022) 218 TTJ 529 : 215 DTR 361 : 196 ITD 474 (ITAT Delhi)]
Assessee-Board constituted by
District Judge under section 92 of Code of Civil Procedure for administration
of a public religious charitable trust would be eligible for exemption under
section 10(23BBA)
It is a
case where a Board for management of the temple was constituted by the District
Judge under section 92 of the CPC. The creation of the Board being under the
Central Act of 1908 thus section 10(23BBA) of the Act of 1961 applied. The
Tribunal accordingly dismissed the appeal preferred by the revenue while
maintaining the order of the Commissioner of Income Tax (Appeal). In our
opinion, section 10 (23BBA) of the Act applies to a body or authority (whether or
not a body corporate or corporation sole) established, constituted or appointed
by or under any Central, State or Provincial Act which provides for
administration of any public religious or charitable trusts or endowments etc.
In the
instant case, the Board was constituted by the District Judge under section 92
CPC for administration of a public religious charitable trust. In view of
above, we find that the Board was established under the Central Act, that too,
for administration of a public religious charitable trust.
In view
of above, section 10(23BBA) of the Act of 1961 has rightly been applied by the
Tribunal. Section 11 and 12 apply where a body or authority is not created in
the manner given under section 10(23BBA) of the Act but the case in hand is not
covered by section 11 and 12 of the Act of 1961.
We find
that the learned Tribunal has rightly decided the issue and the present appeal
against the said order does not involve any substantial question of law so as
to entertain it. We further find that similar issue was considered by the
Orissa High Court in the case of Jagannath
Temple Managing Committee v. CIT (2008) 299 ITR 56. The judgment aforesaid
has been referred by the Tribunal while dismissing the appeal preferred by the
revenue. The ratio propounded therein applies to the case. In the light of
aforesaid, we find no illegality in the order of the learned Tribunal. The
appeal does not involve substantial question of law. The appeal is accordingly
dismissed. [In favour of assessee]
(Related Assessment years : 2008-09 and
2009-10) - [CIT, Kota v. Bade Mathuresh
ji Temple Board (2017) 299 CTR 198 : (2018) 99 taxmann.com 452 (Raj.)]
Petitioner-committee, constituted under Shri Jagannath Temple
Act, 1955was entitled to total exemption from tax under section
10(23BBA); neither it could be asked to file return nor any direction could be
given to bank to deduct tax at source from amounts due to it petitioner
The petitioner-committee was
constituted under the Shri Jagannath Temple Act, 1955. It had been contended by
the petitioner that section 10(23BBA) granted complete exemption to any income
of any such body or authority established under the said Act as of the
petitioner. The activities of the petitioner were concerned with the
administration of a body which was solely engaged in public religious worship
or in charitable purposes, and the said administration vested in a statutory
committee which was set-up under the State Act. The petitioner challenged the
order passed by the Income-tax Officer, to the effect that Letter No. 1015,
dated 17-8-1995, issued by the Assistant Commissioner granting exemption to the
petitioner under section 10(23BBA) stood withdrawn with an immediate effect.
Apart from withdrawing the exemption, various other notices were issued to it
under section 142 and letters to the bankers and others were issued under
sections 201 and 201(1A) and notices under section 221(1) had also been issued
which had been impugned in the petition.
Held that, admittedly, the said
order was passed changing the petitioner's status relating to grant of
exemption from payment of income-tax which facility the petitioner was enjoying
since 1962. Therefore, the said order definitely visited the petitioner with
civil consequences and affected its right in so far as its income was
concerned. The principles of natural justice was, therefore, attracted to the
situation. Admittedly, the said order had been passed without giving the
petitioner an opportunity of hearing. Any post decisional hearing given to the
petitioner would not comply with the requirement of natural justice. Further,
in the instant case the petitioner was a body corporate with perpetual
succession and a common seal and was created under section 5 of the shri
Jagannath Temple Act, 1955. Therefore, the proviso to section 10(23BBA) would
not apply to the petitioner and the exemption which had been granted to the
petitioner under section 10(23BBA) was a total unconditional exemption.
It is clear from the CBDT’s Circular
No. 4 of 2002, dated 16.07.2002 that the body or authority which is covered
under section 10(23BBA) is not statutorily required to file any return of
income under section 139 nor any tax is required to be deducted at source from
such authority under section 194A. Therefore, in the instant case the direction
of the income-tax authority in the notice purported to have been issued under
section 142(1) for submission of return by the petitioner was contrary to the
mandate of the said circular. Equally, the direction to deduct tax at source
under section 194A in respect of income of the petitioner, which was totally
exempted under section 10(23BBA), was not authorized under law.
The revenue had urged that the petitioner had no locus standi to challenge the notices and orders issued to the bankers for deduction of tax at source. In the instant case, if such tax was to be deducted from the income of its then its income would be reduced, whereas the petitioner's income enjoyed total protection from tax deduction under section 10(23BBA). As the petitioner was entitled to enjoy the total statutory protection under section 10(23BBA), no part of its income could be deducted by way of payment of tax and if it was so deducted, it amounted to unauthorized deduction of its income and against such deduction the petitioner had the locus standi to maintain instant writ petition. Therefore, the aforesaid argument did not hold good. The various directions which had been issued consequent to the said letter to the bank for deduction of tax (TDS) were, accordingly, to be set aside. The petitioner was not required to file any return under section 142(1) and the directions given by the revenue to that effect were unauthorized and of no legal consequence. [In favour of assessee] (Related Assessment year : 2005-06) - [Jagannath Temple Managing Committee v. CIT (2008) 299 ITR 56 (Orissa)]
