ITAT Gives Fresh Opportunity to Temple Trust to Explain Delay and Pursue Exemption Claim

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has restored the appeal of Arulmigu Vanabadra Kaliamman Temple to the Commissioner of Income Tax (Appeals) after finding that the first appellate authority had dismissed the appeal solely on the ground of delay without examining the merits of the case.

The temple, which is administered by the Tamil Nadu Hindu Religious and Charitable Endowments (HR&CE) Department, had filed its return for AY 2022-23 declaring nil income after claiming an exemption of Rs 4.44 crore under Section 11 of the Income Tax Act. However, while processing the return under Section 143(1), the Centralised Processing Centre (CPC) denied the exemption and raised a tax demand of Rs 1.92 crore on the ground that the audit report in Form 10B had not been electronically filed within the prescribed time.

Aggrieved by the adjustment, the temple filed an appeal before the CIT(A). The appeal, however, was filed with a delay of more than two years. Although the assessee mentioned in Form 35 that a separate condonation petition explaining the delay had been enclosed, the appellate authority found that no such application was actually filed. Despite granting opportunities to rectify the defect, no response was received from the assessee, leading to dismissal of the appeal in limine.

Before the Tribunal, the temple submitted that the delay occurred because the administrative office managing the temple had limited tax expertise and relied upon advisors who failed to take timely action. It was argued that the lapse was inadvertent and that the matter deserved consideration on the merits. The assessee also assured the Tribunal that it would fully cooperate in further proceedings.

After examining the record, the Tribunal observed that the appeal had indeed been dismissed only because no condonation application was available on record. Considering the circumstances and in the interest of justice, the Bench held that the assessee should be given another opportunity to explain the delay.

Thus, the ITAT set aside the order of the CIT(A) and remanded the matter back to the first appellate authority with a direction to allow the temple to file a proper condonation petition explaining the delay. The CIT(A) was directed to examine the condonation request and thereafter decide the appeal in accordance with the law after providing a reasonable opportunity of hearing.

The Tribunal also cautioned the assessee to be diligent in future proceedings and to file all necessary submissions and supporting documents promptly. As a result, the appeal was allowed for statistical purposes.

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