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2018 (9) TMI 1311 - AT - Income TaxDenial of benefit of section 11 and 12 - denial on the ground that the activities of the assessee are commercial in nature and proviso to section 2(15) are attracted - assessee association is receiving income from corporate boxes, Champion League T-20 matches, income from IPL matches, membership subscription fee, tournament subsidy and sponsorship money. It is also receiving income from sale if liquor etc. - Held that - Since the Assessing Officer following his order for assessment year 2009-10 has denied the benefit of section 11 and 12 of the assessee and since the order for assessment year 2009-10 has already been decided in favour of the assessee by the Tribunal, therefore, in absence of any contrary material brought to our notice by the DR against the order of the Tribunal, the order of the ld. CIT(A) allowing the benefit of section 11 and 12 to the assessee is upheld. The grounds raised by the Revenue are accordingly dismissed.
Issues Involved:
1. Eligibility for exemption under Section 11(1) of the Income Tax Act. 2. Nature of activities as charitable or commercial under Section 2(15) of the Income Tax Act. 3. Validity of the withdrawal of registration under Section 12A. Issue-wise Detailed Analysis: 1. Eligibility for Exemption under Section 11(1): The primary issue revolves around whether the assessee, an Association of Persons (AOP), is eligible for exemption under Section 11(1) of the Income Tax Act. The assessee filed its return declaring Nil income and claimed exemption under Section 11(1) for its activities related to promoting cricket. The Assessing Officer (AO) denied this exemption, citing the commercial nature of the assessee's income sources, including corporate boxes, IPL matches, and sponsorship money. The CIT(A) overruled the AO, directing the AO to allow the exemption under Section 11(1), stating that the activities of promoting cricket fall under charitable purposes as per Section 11(1) and do not attract the proviso to Section 2(15). 2. Nature of Activities as Charitable or Commercial: The AO argued that the assessee's activities were commercial, invoking the proviso to Section 2(15) which excludes activities involving trade, commerce, or business from the definition of charitable purposes. The CIT(A) and the Tribunal found that the promotion of cricket is a charitable activity. The Tribunal referenced past judgments, including the case of Tamil Nadu Cricket Association vs. DIT(E), where similar activities were deemed charitable. It was emphasized that receiving sponsorship and telecasting fees does not convert the activity into a commercial one. The Tribunal concluded that the assessee's activities are intrinsically linked to promoting cricket and do not constitute trade, commerce, or business. 3. Validity of the Withdrawal of Registration under Section 12A: The assessee's registration under Section 12A was withdrawn by the DIT (Exemptions) with effect from 01.04.2009, based on the AO's findings that the activities were commercial. The CIT(A) restored the registration, and the Tribunal upheld this decision, noting that the assessee's primary and predominant activity is promoting cricket, which is a recognized charitable activity. The Tribunal cited its previous order, where it quashed the DIT(E)'s order of cancellation of registration, reinforcing that the assessee's activities do not fall within the ambit of trade, commerce, or business. Conclusion: The Tribunal upheld the CIT(A)'s decision to allow the exemption under Section 11(1) and restore the registration under Section 12A, dismissing the Revenue's appeal. The Tribunal's analysis confirmed that the assessee's activities are charitable and not commercial, ensuring the continuation of tax benefits under the Income Tax Act. The appeal filed by the Revenue was dismissed, affirming the assessee's eligibility for exemption and registration as a charitable institution.
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