whether the promotion of sports can be regarded as 'charitable purpose' within the meaning of section 2(15) of the Income-tax Act, 1961. - Income Tax - 594/CBDT

INSTRUCTION NO. 594/CBDT Dated : August 23, 1973 Section(s) Referred: 2(15) Statute: Income - Tax Act, 1961 It is stated that the Board had occasion to consider the question whether the promotion of sports can be regarded as 'charitable purpose' within the meaning of section 2(15) of the Income-tax Act, 1961. 2. Finance Act, 1973 has amended section 80-G of the Income-tax Act, 1961, by which donations made to sports associations or institutions, which have been approved under section 10(23) of the Income-tax Act, 1961 will now qualify for deduction under section 80-G as if they were donations made to charitable institutions. Because sports associations are dealt with in a specific provision, the Board in consultation with the Ministry of Law has decided that such associations cannot claim exemption under section 11 of the Income-tax Act. Thus, income of only those sports associations will qualify for exemption which have been approved by the Central Govt. under section 10(23) of the Income-tax Act and also satisfy the other conditions laid therein. Recognition certificate under section 80-G should, therefore , not be issued to the institutions and associations engaged in the conduct of sports activities unless they have been approved under s. 10(23) of the I.T. Act. The deductions in respect of donations to the Sports Associations approved under s.10(23) can be claimed by producing a copy of the order of approval or that of a certificate granted by the C.I.T. under S.80-G. Care may be taken to see that no recognition certificate is issued to sports associations not approved in this manner. 3. In the past, in some of the Commissioners' charges such institutions have been treated as charitable and recognition certificates under section 80-G have also been issued to sports institutions although promotion of the game of sports was not a 'charitable purpose'. It would, therefore, be necessary to have a review of such cases with a view (a) to bring to tax the income of such institutions or associations to the extent it is now feasible and (b) to cancel the certificates under s. 80-G already issued. A report of the results achieved of the scrutiny carried on may kindly be sent to the Board by 15th October, 1973.