Income of Devaswom Board Exempt u/s 10(23BBA), But Not the Temples It Administers: Kerala HC [Read Order]
: The court distinguished a previous decision of the same court in Payyannur Sree Subrahmanya Swami Temple case, noting that it was based on a statement by the respondents and did not involve a detailed legal analysis.
The Kerala High Court has ruled that the income tax exemption under Section 10(23BBA) of the Income Tax Act, 1961 applies only to administrative bodies like the Devaswom Board, and not to the temples themselves that are administered by such bodies.
The bench held that "Section 10(23BBA) provides exemption only to bodies or authorities established under state enactments for the administration of religious institutions, but not to the religious institutions themselves"
The petitions were filed by various temples and their administrative bodies under the Malabar Devaswom Board, seeking income tax exemption under Section 10(23BBA). The petitioners challenged assessment orders and sought refunds of TDS amounts collected from deposits made in the name of the temples.
The issue before the court was whether the income of temples themselves is exempt under Section 10(23BBA) or only the income of the administrative bodies that manage them. The petitioners argued that since the temples are administered by bodies created under the Madras Hindu Religious and Charitable Endowments Act, 1951, they should be entitled to exemption.
The court, comprising Justice Ziyad Rahman A.A., analyzed the provisions of Section 10(23BBA) and the Madras Hindu Religious and Charitable Endowments Act. The court noted that Section 10(23BBA) exempts income of "any body or authority established, constituted or appointed by or under any Central, State or Provincial Act" for the administration of religious institutions, but the proviso clarifies that this does not extend to the income of the religious institutions themselves.
The court observed that there are separate provisions (Sections 11 and 12) for exemption of income of religious institutions, while Section 10(23BBA) is specifically meant for administrative bodies like the Devaswom Board, which may not be eligible for exemption under Sections 11 and 12.
The court distinguished a previous decision of the same court in Payyannur Sree Subrahmanya Swami Temple case, noting that it was based on a statement by the respondents and did not involve a detailed legal analysis.
The court also relied on a Madras High Court decision in Sri.Amrithakadeswaraswamy Devasthanam Dharumapuram Adheenam, which had held that individually constituted temples are liable to pay tax in light of the proviso to Section 10(23BBA).
Consequently, finding that the income of temples is not exempt under Section 10(23BBA), the court disposed of the writ petitions while allowing the petitioners to pursue other remedies available to them. The court clarified that if the administrative bodies have separate income of their own, they may claim exemption under Section 10(23BBA).
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