2024 (9) TMI 133 - AT - Income Tax

Denial of exemption claimed u/s.11 - assessee is engaged in promoting the game of cricket in the State of Gujarat and registered u/s.12AA - Charitable activity u/s 2(15) or not? - as per AO assessee earns income out of sale of tickets, sale of space, conduct Indian Premier League IPL matches which is a commercial venture of BCCI, TV rights and which is mixture of Sports, entertainment and business, thus involved in carrying on the activity of advancement of any other object of general public utility and such as in the nature of trade, commerce or business. HELD THAT - Recording the above submissions of rival parties and respectfully following Apex Court Judgement in the case of AUDA 2022 (10) TMI 948 - SUPREME COURT the orders passed by the Lower Authorities are hereby set aside to the file of Ld. Assessing Officer and direct the AO to pass fresh orders in line of the directions given by Hon ble Supreme Court wherein held so far as the state cricket associations are concerned (Saurashtra, Gujarat, Rajasthan, Baroda and Rajkot), this Court is of the opinion that the matter requires further scrutiny. In light of the discussion in paragraphs 228-238 of the judgment. Accordingly, a direction is issued that the AO shall adjudicate the matter afresh after issuing notice to the concerned assessees and examining the relevant material indicated in the previous paragraphs of this judgment. Thus adjudicate the matter afresh by giving proper opportunity of hearings to the assessee - Appeals filed by the Assessee and Revenue are allowed for statistical purposes.

Summary

Issues:
Cross appeals filed by Assessee and Revenue against separate appellate orders relating to Assessment Years 2011-12 to 2017-18; Delay in filing appeals by Assessee; Grounds of Appeal raised by Assessee and Revenue; Assessment of income of Saurashtra Cricket Association; Interpretation of charitable purpose for sports associations; Setting aside orders for fresh assessment by Assessing Officer.

The Appellate Tribunal ITAT Ahmedabad heard cross appeals filed by the Assessee and Revenue against separate appellate orders concerning Assessment Years 2011-12 to 2017-18. The appeals were filed by the Assessee and Revenue due to different dates of appellate orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The Tribunal noted a delay in filing the Assessee's appeals, but after the Assessee provided evidence that the appeals were electronically filed within the time limit, the delay was considered rectified, and the appeals were proceeded with.

The Assessee raised multiple Grounds of Appeal for the Assessment Year 2012-13, questioning the dismissal of the appeal by the CIT(A) without considering their powers, failure to address the grounds of appeal, and refusal to accept the claim despite orders from ITAT and High Court. On the other hand, the Revenue raised several issues for the Assessment Year 2011-12, including the applicability of exemptions under various sections of the Income Tax Act and the allowance of certain claims without considering the Assessing Officer's findings.

Regarding the assessment of income of Saurashtra Cricket Association (SCA), the Assessing Officer had denied exemption claimed under Section 11 of the Act, considering SCA's activities as commercial due to involvement in IPL matches and TV rights. However, the High Court of Gujarat had previously held that SCA's activities were not commercial in nature, emphasizing that any surplus generated was reinvested into cricket promotion, not for profit. The Supreme Court also directed the matter back to the Assessing Officer for further scrutiny in light of the changed definition of charitable purpose.

In light of the Supreme Court's directions, the Tribunal set aside the orders of the Lower Authorities and directed the Assessing Officer to pass fresh orders after reevaluating the matter as per the Supreme Court's judgment. Both the Assessee and Revenue appeals were allowed for statistical purposes, emphasizing the need for cooperation from the Assessee in providing necessary details for the fresh assessment.

In conclusion, the Tribunal's judgment addressed the issues of delay in filing appeals, grounds of appeal raised by both parties, the assessment of SCA's income, and the interpretation of charitable purpose for sports associations. The decision to set aside the orders for fresh assessment by the Assessing Officer was based on the Supreme Court's directives, ensuring a thorough reevaluation of the matter in line with the legal provisions.