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TMI Blog2014 (3) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(15) of the Act. We, therefore, feel that the assessee deserves a fair opportunity to explain its position on all the issues which provoked the DIT (E) to cancel the registration granted u/s 12A - Thus remit the matter back to the file of the DIT (E), who shall communicate to the assessee all the issues, which according to him, has changed the object of the assessee thereby violating the conditions of registration u/s 12AA(3). Assessee s appeal is allowed for statistical purposes. - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For the Appellant : Shri V.Siva Kumar For the Respondent : Shri P. Somasekhar Reddy ORDER PER SAKTIJIT DEY, J.M: This appeal by the assessee is directed against the order dated 31/5/2012 of DIT (E), Hyderabad cancelling the registration u/s 12AA(3) of the Act. 2. Briefly stated the assessee a society registered under the A.P. Societies Registration Act was granted registration u/s 12A of the Act w.e.f. 20-1-1997. As stated by the assessee, from the date of grant of registration u/s 12A of the Act, the assessee had been enjoying exemption u/s 11 of the Act for all the subsequent assessment year. A survey u/s 133A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiated proceedings for cancelling the registration granted u/s 12A of the Act. It was also submitted by the assessee-society that the prime object of the society is to encourage and develop the game of cricket. It was submitted that the assessee has neither changed its objective nor deviated from its activity of promoting cricket in the areas covered by erstwhile state of Hyderabad and the activities carried on by it do not constitute any activity in the nature of trade, commerce or business. It was submitted that the assessee society consists of 215 member clubs, spread geographically over the area covered by the erstwhile state of Hyderabad and each of those clubs encourage cricket within their district, municipality, village etc. It was submitted that the sport of cricket is promoted by providing grounds to carry on practice matches/coaching/leagues etc. 4. Further, support is provided to the member clubs by providing cricketing equipments, dresses and qualified umpires to conduct matches and assessee conducted league matches among the affiliated clubs. It selects an official team to represent assessee in various tournaments conducted across the country by Board of Cricket Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple who watch the event and therefore the ticketing and other arrangement are meant to meet such objective. 5. With reference to accommodation charges, it was submitted that stadium constructed in Hyderabad consist of accommodation facilities to be let out to the sports personnel/sports related officials during the course of pre and post events coaching camps etc. The accommodation charges go towards the maintenance of facility created for that purpose and such activities are not carried out with any commercial intent. With regard to hall booking charges, swimming pool and gym charges, it was submitted that HCA promoted a club for the benefit of all its members where facilities such as swimming pool, gym and other sports activities are proposed to be provide. The complete infrastructure envisaged under the club facility has not yet been completed. Pending completion of such infrastructure facilities, HCA allowed its members to utilise the hall for their private purposes and the fee collected for gym and swimming pool is directly related to the promotion of sports activity and these activities are not carried out with a view to run trade, commerce or business. With regard to adverti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that the sale of tickets is commercial in nature violating the objects of the society. He noted that on several occasions, the assessee was in receipt of huge amounts towards sponsorship in connection with various matches conducted by it and correspondingly, it also claimed expenditure on payment of commission on sponsorship amount. He concluded that the receipts by way of sponsorship were in the nature of commercial receipts. On the aforesaid basis, the DIT (E) ultimately concluded that since the assessee is pursuing commercial activity, it is not entitled for registration u/s 12A of the Act and accordingly passed the impugned order cancelling the registration u/s 12AA(3) of the Act. Being aggrieved of the said order, the assessee is in appeal before us. 8. The preliminary grievance of the assessee as raised in ground Nos. 4 and 5 is with regard to the violation of rules of natural justice. The learned AR submitted that the DIT (E) had cancelled the registration by pointing out certain issues which were never raised in the show cause notice issued by him or even not put across to the assessee at the time of personal hearing before him. The learned AR submitted that tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advancing the game of cricket. It was thus submitted that had the DIT (E) offered a reasonable opportunity of being heard to the assessee these issues could have been properly explained by the assessee to the DIT (E) enabling him to take a different view in the matter. It was therefore contended that the order passed by the DIT (E) is in violation of rules of natural justice and the same is to be cancelled. 9. The learned DR, however, strongly supporting the order of the DIT (E) submitted that since the assessee has indulged in activities which are purely of commercial nature as pointed out by the DIT (E) in the show cause notices as well as in his order, the cancellation of registration u/s 12AA(3) of the Act is perfectly in order. 10. We have considered the submissions of the parties and perused materials on record. From the submission of the learned AR, it can be seen that the grievance of the assessee is that the DIT (E) has cancelled the registration granted u/s 12AA of the Act on various issues which were neither mentioned in the show cause notices nor were put across to the assessee at the time of hearing. Therefore, without affording opportunity to the assessee to respond t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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