Income From Public Religious/Charitable Trusts Not Eligible For Exemption U/S 10(23BBA) Income Tax Act: Kerala High Court
The Kerala High Court has held that income derived from public religious/charitable trusts is not eligible for exemption under Section 10(23BBA) of the Income Tax Act. Section 10(23BBA) of the Income Tax Act, 1961, provides a complete exemption from income tax for the income of a body or authority that has been established, constituted, or appointed under any Central,...
The Kerala High Court has held that income derived from public religious/charitable trusts is not eligible for exemption under Section 10(23BBA) of the Income Tax Act.
Section 10(23BBA) of the Income Tax Act, 1961, provides a complete exemption from income tax for the income of a body or authority that has been established, constituted, or appointed under any Central, State, or Provincial Act specifically for the administration of public religious or charitable trusts or endowments.
Justice Ziyad Rahman A.A. stated that income derived from properties belonging to the deity or temple does not become the income of the administrative body merely because the body manages the institution. The administrative body must independently establish that the income claimed is its own statutory income in order to attract the exemption under Section 10(23BBA) of the Income Tax Act.
The bench noted that Section 10(23BBA) exempts only the income of a “body or authority” established, constituted or appointed under a Central, State or Provincial Act for the administration of public religious or charitable trusts or endowments, and does not extend exemption to the income of the religious institutions, temples, endowments or deities themselves. The proviso reinforces that the income of any trust, endowment or society administered by such body is not exempt.
In this case, the assessee/petitioners are either administrative bodies of various temples under the Malabar Devaswom Board or the temples represented by their administrative bodies.
The assessee is seeking the benefit of Section 10(23BBA) of the Income Tax Act, which provides for a complete exemption from Income Tax.
The assessees relied upon the various provisions contained in the Madras Hindu Religious and Charitable Endowments Act, 1951 (HR & CE Act), and also the relevant provisions, including Section 10(23BBA) of the Income Tax Act.
The assessee relied upon the HR&CE Act in view of the fact that all the temples are under the Malabar Devaswom Board, which was created under the said statute, and all the administrative bodies in charge of the affairs of these temples are constituted as per the scheme created under the HR&CE Act.
The revenue submitted that, going by the statutory stipulations contained under Section 10(23BBA) of the Act, the assessees are not entitled to get any exemption, in view of the fact that what is exempted is the income of the bodies established under the statute and not the income of the temples as such.
The bench opined that the public religious establishments governed by the bodies or authorities referred to above are not eligible for the exemption contemplated under Section 10(23BBA) of the Income Tax Act.
The exemption contemplated under section 10(23BBA) is only for the body or authority created by the statute, for governing the public religious institutions, but the said provision is not intended to provide exemptions to the public religious institutions governed by such body or authority. In other words, the exemption contemplated as per the said provision is for the income of bodies like Devaswom Board, Waqf Board, etc., and not to the religious establishments governed by such institutions, added the bench.
The bench held that exemption contemplated under Section 10(23BBA) is applicable only in respect of the bodies and authorities constituted, established and appointed under the Central, State or Provincial Act, and the same is not applicable to the 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, or any other law for the time being in force, which are being administered by the body or the authority referred to above.
In view of the above, the bench dismissed the petition.
Case Title: Madhur Sree Madanantheswara Vinayaka Temple v. Income Tax Officer
Case Number: WP(C) NO. 27452 OF 2023
Citation: 2025 LiveLaw (Ker) 806
Counsel for Petitioner/Assessee: Mahesh V Ramakrishnan
Counsel for Respondent/Department: Jose Joseph