2024 (8) TMI 632 - HC - Income Tax

Entitlement for exemption u/s 2 (15) r.w.s. 12AA - whether the income received by the Kerala Cricket Association would partake of the nature of exempted income going by the provisions of Section 2 (15)? - HELD THAT - We are of the view that the present appeals need to be remanded to the Appellate Tribunal for a fresh adjudication on the facts, especially with regard to whether or not the amount made over to the assessee Cricket Association by the Board for Control of Cricket in India (BCCI) were in the nature of infrastructure subsidy or business income. We, therefore, set aside the impugned orders of the Income Tax Appellate Tribunal and remand the matter to the Tribunal for a fresh determination of the issue in the light of the observations of the Supreme Court in Ahmedabad Urban Development Authority 2022 (10) TMI 948 - SUPREME COURT . The Income Tax Appellate Tribunal shall consider the matter afresh as above and pass final orders in the appeal within an outer time limit of six months from the date of receipt of a copy of this judgment.

Issues:
1. Whether the income received by the Kerala Cricket Association during specific assessment years qualifies as exempted income under Section 2(15) of the Income Tax Act.
2. Whether the denial of exemption by the assessing authority and subsequent revision proceedings by the revenue were justified for the assessment years 2012-13 and 2013-14.
3. Whether the findings of the Appellate Tribunal regarding the entitlement for exemption under Section 2(15) of the IT Act are correct.
4. Whether the judgment of the Supreme Court in Assistant Commissioner of Income Tax (Exemptions) v. Ahmedabad Urban Development Authority impacts the present case.

Analysis:
1. The primary issue in the appeals was whether the income received by the Kerala Cricket Association during specific assessment years would be considered exempted income under Section 2(15) of the Income Tax Act. The assessing authority initially found the income to be hit by the proviso to Section 2(15), leading to the denial of exemption. However, the First Appellate Authority and subsequently the Appellate Tribunal disagreed with this view, allowing the claim for exemption by the Cricket Association.

2. For the assessment years 2012-13 and 2013-14, the assessing authority granted exemption to the Cricket Association, but the revenue initiated revision proceedings resulting in the denial of exemption by the Commissioner of Income Tax. The Tribunal, in further appeals by the Cricket Association, followed its earlier order and allowed the claim for exemption, leading to a dispute between the revenue and the Cricket Association regarding the entitlement to exemption.

3. The revenue raised substantial questions of law challenging the findings of the Appellate Tribunal regarding the entitlement for exemption under Section 2(15) of the IT Act. However, the judgment of the Supreme Court in a related case emphasized the need for a detailed examination of the nature of income received by State Cricket Associations, suggesting a remand of the present appeals to the Appellate Tribunal for fresh adjudication based on the observations of the Supreme Court.

4. In light of the Supreme Court's observations, the High Court decided to remand the appeals to the Appellate Tribunal for a fresh determination on whether the amounts received by the Cricket Association from the Board for Control of Cricket in India were infrastructure subsidy or business income. The Tribunal was instructed to consider the matter afresh within a time limit of six months and to allow both parties to present their contentions during the hearing of the appeals.

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