ORDER :

1. These writ petitions have been filed by the Sri Vaithiyanathaswamy and Sri Amirthakadeswaraswamy Devasthanams and raise important issues on the interpretation of Section 10(23BBA) of the Income Tax Act, 1961 (IT Act).

2. The impugned notice and order in W.P.No.29315 of 2019 have been issued to Sri Vaithiyanathaswamy Devasthanam, also known as the Velur Devasthanam, comprising the Vaitheeswaran Koil at Sirkazhi Taluk, Thanjavur, Sri Veeratteswara Swami Temple, Korkkai, Mayiladuthurai Taluk, Sri Kutramporutheeswarar Temple, Thalaignayiru, Mayiladuthurai Taluk, Sri Lakshmipureeswarar Temple, Thirunandriyur, Mayiladuthurai Taluk, Sri Maruthapureeswarar Temple, Maruvatthur, Sirkazhi Taluk, Sri Mariyamman Temple, Sri Angalaparameswari Temple, Sri Ayyanar Temple, Sri Pidariyamman Temple, Sri Thirowbathaiyamman Temple, Vaitheeswaran koil, Sirkazhi Taluk, Sri Ayyanar Temple, Neikuppai, Sirkazhi Taluk, (‘constituent temples’) shrines in the aforesaid temple premises and endowments and charities. As for the petitioner in W.P.29312 of 2019, the Amirthakadeswaraswamy Devasthanam comprises the Sri Amirthakadeswara Swami Temple, Thirukkadaiyur, Tranqubar Taluk, Sri Veeratteswara Swami Temple, Parasaloor, Tranqubar Taluk, Sri Thuraikattum Vallalar Swami Temple, Vilanagar, Tranqubar Taluk, Sri Mariyamman Temple, Ottangadu Temple, Tranqubar Taluk, Sri Agneeswara Swami Temple, Udayavar Koil Pathu, (Panjakkai), Tranqubar Taluk, Sri Edirkaleswarar Temple, Thirukkadaiyur, Tranqubar Taluk and Sri Kathayamman Temple, Thirukkadaiyur, Tranqubar Taluk (‘constituent temples’) along with shrines for other deities and endowments. Both Devasthanams come under the supervision and management of the Dharmapuram Adheenam and are jointly referred to as ‘devasthanams’ and singly as ‘devasthanam’ for convenience and clarity. All the constituent temples are listed in terms of Section 45(3) of the Tamil Nadu Hindu Religious and Charitable Endowments Act 1959 (HR&CE Act).

3. The Dharmapuram Adheenam (‘Adheenam’) is a Saivite Mutt, based in Mayiladuthurai that oversees the administration and management of 27 temples dedicated to the worship of Lord Shiva and His consorts. The temples are grouped into smaller devasthanams under the overall management of the Adheenam, each devasthanam administering major and minor temples shrines, charities and endowments.

4. The devasthanams claim that they are regularly audited by the HR&CE Department and the collections from Hundis and donations, and income from endowments and other properties are properly accounted for, deposited in their bank accounts and utilised towards their objects.

5. While so, the devasthanams had made cash deposits of amounts of Rs.11,40,800/- and Rs.38,84,660/- (Sri Vaithiyanathaswamy Devasthanam) and Rs.60,21,054/- (Sri Amirthakadeswara Swami Devasthanam) for assessment year (AY) 2017-18 which came to the attention of the Income Tax Department. No returns of income in terms of the provisions of the IT Act had been filed by the devasthanams and notices under Section 142(1) thus came to be issued calling upon the devasthanams to file returns of income. The notices were followed up with reminders to which also, there was no compliance by the devasthanams. Thus, a communication dated 09.03.2018 came to be issued by the Principal Commissioner of Income Tax bringing to the notice of the devasthanams the extension of due date for filing of a ROI for AY 2017-18, upto 31.03.2018. He urged that the opportunity be utilised and returns of income filed within the extended period. In response, the devasthanams, setting out the history of their constitution, explained that the deposits comprise voluntary donations made in specified bank notes (SBN) in their hundis. They claimed an exemption in terms of Section 10(23BBA) of the IT Act and prayed that the proposed proceedings for assessment be dropped. The petitioners also requested the refund of any amounts deducted as tax at source.

6. Communication dated 05.08.2019