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A. K. GANGULY, C. J. AND I. MAHANTY, J.
Shri Jagannath Temple Managing Committee, Puri
Versus
Commissioner of Income-tax, Bhubaneswar and Ors.
W. P. (C) No. 1922 of 2007
Decided on : 11 -10 -2007
Income-tax - Shri Jagannath Temple Managing Committee - Section 10(23BBA) of the Income-tax Act - 10(23BBA) - Summary of Acts and Sections: Section 10(23BBA) of the Income-tax Act - The judgment discusses the withdrawal of exemption granted to the petitioner under Section 10(23BBA) of the Income-tax Act and the subsequent notices issued under various sections of the Act. The court examines the legal provisions of Section 10(23BBA) and its applicability to the petitioner, highlighting the unconditional exemption granted to bodies established under a Central, State, or Provincial Act for the administration of public religious or charitable trusts or endowments. The court also emphasizes the principles of natural justice and the requirement of pre-decisional hearing before withdrawing exemption. The judgment concludes by quashing the impugned order and the consequential directions issued by the Revenue.
Fact of the Case:
The petitioner, Shri Jagannath Temple Managing Committee, challenged the withdrawal of exemption granted under Section 10(23BBA) of the Income-tax Act and various notices issued by the Income-tax authorities. The court found that the withdrawal of exemption and the subsequent directions were passed without giving the petitioner an opportunity of pre-decisional hearing, violating the principles of natural justice. The court also highlighted the unconditional exemption granted to bodies established under a Central, State, or Provincial Act for the administration of public religious or charitable trusts or endowments.
Finding of the Court:
The court held that the impugned order withdrawing exemption and the consequential directions were passed without giving the petitioner an opportunity of pre-decisional hearing, violating the principles of natural justice. The court quashed the impugned order and the consequential directions issued by the Revenue.
Issues: The issues revolved around the withdrawal of exemption granted under Section 10(23BBA) of the Income-tax Act and the legality of the subsequent notices issued by the Income-tax authorities. The court examined the applicability of Section 10(23BBA) to the petitioner and the requirement of pre-decisional hearing before withdrawing exemption.
Ratio Decidendi: The court emphasized the principles of natural justice and the requirement of pre-decisional hearing before withdrawing exemption. The court also highlighted the unconditional exemption granted to bodies established under a Central, State, or Provincial Act for the administration of public religious or charitable trusts or endowments. The judgment established that the post-decisional hearing given by the Revenue was an empty ritual and did not comply with the requirement of natural justice.
Final Decision: The court quashed the impugned order dated 12th October, 2006 and the various directions issued by the Revenue, holding that the petitioner is not required to file any return under Section 142(1) of the Income-tax Act and the directions given by the Revenue to that effect are unauthorized and of no legal effect. The petition was allowed.
Judgement
A. K. GANGULY, C. J. :- In this matter the petitioner is Shri Jagannath Temple Managing Committee being represented by its Chief Administrator. The subject-matter of challenge in this petition is the order dated 12-10-2006 passed by the Income-tax Officer, Puri Ward, Puri to the effect that letter No. 1015, dated 17-8-1995, issued by the Assistant Commissioner of Income-tax, Circle-1, Bhubaneswar granting exemption to the petitioner under Section 10(23BBA) of the Income-tax Act stands withdrawn with immediate effect. Apart from withdrawing exemption, various other notices were issued under Section 142 of the Income-tax Act (hereinafter, 'the Act') and letters to the Bankers and others were issued under Sections 201 and 201 (1A) of the Act and notices under Section 221(1) of the Act have also been issued and have been impugned in this petition.
2. Shri Jagannath Temple Managing Committee (hereinafter, the 'said Committee'), the petitioner herein, has been constituted by the State Government under the provisions of Shri Jagannath Temple Act, 1954 (Orissa Act II of 1955) (hereinafter, the 'Act of 1955'). The Act of 1955 was assented to by the President of India on 15th October, 1955.
3. From a perusal of the preamble of the Act of 1955, it is clear that the temple of Lord Jagannath of Puri, since its inception has been and suit is an institution of unique national importance and attracts millions of Hindu devotees from all over the world. The temple stands as a symbol of Hindu religions traditions and an icon of faith, belief and worship for countless Hindu devotees all over the world. As such in order to properly organize its management and to formulate a scheme of running the affairs of the temple, the Act of 1955 was enacted.
4. The Committee, i.e. the petitioner is a body corporate under the said Act of 1955 and having a perpetual succession and a common seal, and can sue and be sued in its own name. This Committee is constituted under Section 5 and under Section 6 thereof, the Committee shall consist of a large number of members of whom the Raja of Puri shall be the Chairman and an officer, not below the rank of Additional Chief Secretary, shall be the ex-officio member and its working Chairman. The Committee shall also consist of Chief Administrator appointed under sub-section (1) of Section 19 of the said Act.
5. Under Section 25 of the Act of 1955 the Chief Administrator shall, each year, prepare a budget in the prescribed manner and form a budget estimate of the receipts and expenditure of the Temple and its endowments in the next year and shall place it before the Committee which may approve it with or without modification. After the budget is approved by the Committee, the same shall be placed before the State Government for sanction. The State Government before sanctioning the budget can make various queries under Section 25(2). Under Section 28, it is provided that there shall be constituted a Fund called "Shri Jagannath Temple Fund" which shall be vested in and be administered by the Committee. The fund shall consist of the income derived from the movable and immovable properties of the Temple, contributions by the State Government either by way of grant or by way of loan, all fines and penalties imposed under the said Act, recoveries under the said Act, other gifts or contributions made by the public, local authorities or institutions. The said Fund shall be utilized for the purpose permitted under the said Act and for any of the purposes mentioned in sub-section (2) of Section 28. Section 28-C provides for constitution of a Fund called "Shri Jagannath Temple Foundation Fund". The said Fund shall vest in and be administered by the Foundation Fund Committee constituted under sub-section (6) of Section 28-C of the said Act. The said Foundation Fund Committee shall consist of the Chief Minister of the State of Orissa who shall be the Chairman, the Law Minister who shall be the Vice-Chairman, the Secretary to the
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