2019 (5) TMI 1155 - AT - Income Tax

Exemption u/s 11 - Registration u/s.12AA denied - work of the assessee society is to promote Cricket - according to the Revenue, the assessee is engaged in activities of business, trade and commerce or is rendering services in relation to such business, trade or commerce and therefore, registration u/s.12AA of the Act was denied to the assessee - HELD THAT - As decided in assessee's own case 2019 (5) TMI 1134 - ITAT RAIPUR the assessee is receiving money from BCCI as subsidy for providing services in the IPL matches, for conducting Cricket matches for hiring ground only to promote the Cricket and encouraging new talent in the field of Cricket and objects of all the other Cricket associations of any other state are similar in nature. Therefore, the assessee has not provided any services to any trade, commerce or industry as defined in the proviso to section 2(15) of the Act. In the case of the assessee, since it is for promotion of Cricket, it may not be benefiting the entire mankind but those being benefited are definitely identifiable and they are sections of public. The work of the assessee society is to promote Cricket so as to bring forth new talents and provide opportunity to the people for representing the State as well as the Country. Therefore, the object of the assessee is for charitable purpose and nothing else - Decided in favour of assessee.

Summary

Issues:
- Condonation of delay in filing appeal
- Rejection of application for registration u/s.12AA of the Income Tax Act, 1961

Condonation of Delay:
The appeal was found to be time-barred by 878 days, but the delay was condoned after assessing the reasons for the delay, which were beyond the assessee's control. The deliberate conduct was not attributed to the assessee, and even the Ld. DR had no objection to condoning the delay. Consequently, the delay was condoned, and the appeal was heard on merits.

Rejection of Registration u/s.12AA:
The crux of the grievance was the rejection of the application for registration u/s.12AA of the Act. The Revenue contended that the assessee's activities were in the nature of trade, commerce, or business, thus denying registration. The assessee argued that its sole object was to promote Cricket in Chhattisgarh, bringing in new talent, and the funds received were for associate services during IPL matches. The Revenue's observation was based on the grant received from BCCI, which was involved in IPL matches.

Judicial Analysis:
The Tribunal examined the objects of the assessee society, emphasizing the promotion of Cricket in Chhattisgarh and nurturing new talent. Comparisons were drawn with similar cases where registration was granted based on charitable activities. The Tribunal highlighted that the objects of the society were solely for promoting Cricket, not for commercial purposes. It was established that the activities did not fall under the proviso to section 2(15) of the Act, as they were not commercial in nature.

Precedents and Legal Interpretation:
Reference was made to the case of DCIT Vs. Tamil Nadu Cricket Association, where similar activities were deemed non-commercial. The Tribunal also cited the decision in CIT Vs. Gujarat Maritime Board, emphasizing that activities primarily for the welfare of the public are charitable. The Tribunal stressed that the object of the assessee society was charitable, focusing on promoting Cricket and benefiting identifiable sections of the public.

Decision and Direction:
Based on the analysis of facts, legal precedents, and the charitable nature of the activities, the Tribunal set aside the order rejecting registration u/s.12AA. Following previous decisions, the Tribunal directed the Commissioner of Income Tax (Exemption) to grant registration to the assessee society. Consequently, the appeal of the assessee was allowed.

This detailed analysis and legal interpretation led to the favorable decision for the assessee, emphasizing the charitable nature of their activities and the promotion of Cricket for the welfare of the public.