NOIDA GOLF COURSE SOCIETY,NOIDA vs. JCIT, NOIDA

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ITA 2053/DEL/2015Status: DisposedITAT Delhi08 August 2025AY 2010-118 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the assessee is a golf club registered under Section 12A. For AY 2009-10 and 2010-11, the AO added interest income as income from other sources, and the CIT(A) upheld these additions, doubting the assessee's activities and relying on the principle of mutuality. However, the Tribunal observed that in AY 2018-19, the AO, in an order dated 04.03.2021, did not treat the interest income as taxable and considered the assessee as a business enterprise in the absence of ineligibility under Sections 11 and 12. In the interest of justice, the Tribunal set aside the orders of the AO and CIT(A) for AY 2009-10 and 2010-11. The matters were restored to the AO for verification of facts and figures presented in paragraph 7 of the synopsis and to pass a fresh order, keeping in view the AO's order for AY 2018-19, after providing the assessee a fair opportunity of hearing. No other grounds were argued or left undecided.

What were the facts?

The assessee, Noida Golf Course Society, filed returns declaring nil income for assessment years (AY) 2009-10 and 2010-11. The society is registered under Section 12A of the Income Tax Act, 1961. For AY 2009-10, the Assessing Officer (AO) made an addition of Rs. 56,99,607/- under the head 'income from other sources' on account of interest income. For AY 2010-11, a similar addition of Rs. 34,97,366/- was made. The Commissioner of Income-Tax (Appeals) dismissed the assessee's appeals against these additions. The assessee is in appeal before the Income Tax Appellate Tribunal (ITAT) against the orders of the CIT(A).

What were the issues?

1. Whether the assessee is eligible for exemption under Section 11(1)(c) of the Income Tax Act, 1961, given its registration under Section 12AA and the nature of its activities, including running a restaurant and swimming pool as auxiliary facilities for members, and whether any surplus is utilized for furthering its charitable objects. Assessee's contentions: The AO and CIT(A) erred in not allowing exemption under Section 11(1)(c) and Section 11(1). The golf course activities, including the restaurant and swimming pool, are not for profit motive but to facilitate members. Any surplus is used for the golf course's objects, not for members' benefit. The objectives are charitable under Section 2(15). The AO's reliance on the Bangalore Club vs. CIT case is misplaced as the facts regarding the 'Principal of Mutuality' are different. The AO himself treated the assessee as a charitable entity in AY 2018-19, allowing exemption under Section 11(1). Revenue's contentions: The revenue argued that the appellant/assessee cannot be permitted to take a new plea.

Which sections of the Income-tax Act were involved?

Section 11(1)(c),Section 11(1),Section 2(15),Section 12A,Section 12AA,Section 11,Section 12,Section 250,Section 143(1),Section 143(3),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI

Before: SHRI M BALAGANESH

For Appellant: Shri Rajiv Sharma, Adv
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 04.08.2025

Heard together (2 matters)

ITA No. 2052/DEL/2015
ITA No. 2053/DEL/2015

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R

PER VIMAL KUMAR, JUDICIAL MEMBER:

1.

The assessee’s appeals are against separate orders dated 25.01.2015 of Learned Commissioner of Income-Tax (Appeals), Noida (hereinafter referred as “the Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961 ( hereinafter referred as “the Act”) arising out of orders dated 07.12.2011 and 26.03.2013 of the Additional Commissioner of Income Tax, Range-1, Noida (hereinafter referred as “Ld. AO") for the Act for assessment years 2009-10 and 2010-11 respectively.

2.

Since, both the appeals involve similar facts, grounds and issues are heard together for sake of convenience, and are being decided by this order. for assessment year 2009-10 are that assessee filed return of income on 29.09.2009 declaring nil income. The case was processed under Section 143(1) of the Act on 19.03.2010. The assessee Society is registered under Section 12A of the Act vide CIT, Meerut Order dated 15.11.2000. In this case, addition exceeding Rs.10,00,000/- had been made in earlier years, therefore, the case was selected for compulsory scrutiny. Notice under Section 143(2) of the Act dated 17.09.2010 was issued. Notice under Section 142(1) dated 29.06.2011 along with questionnaire was issued. Further notices under Section 142(1) dated 10.08.2011 and 25.10.2011 were issued. Shri Nikhil Goyal, CA, learned counsel for assessee attended proceedings and furnished details. From income and expenditure account, it was noticed that the assessee had earned interest income from bank interest and interest on income tax refund of Rs.56,99,607/- liable to be taxed under the head “income from other sources”. The assessee filed reply dated 23.08.2011. On completion of proceedings, Ld. AO made addition of Rs.56,99,607/- under the head “income from other sources” for assessment year 2009-10.

5. Against orders dated 07.12.2011 and 25.03.2013 of Ld. AO, appellant/assessee preferred separate appeals before Ld. CIT(A) which were dismissed vide orders dated 25.01.2015.

6. Being aggrieved, appellant/assessee preferred present appeals with following identical grounds:

“1. BECAUSE the AO as well as the learned Commissioner of Income Tax (Appeals) erred in law and on facts in not allowing the Appellant exemption under section 11(1)(c) of I.T. Act while the Golf Course was registered under section 12AA by the Learned Commissioner of Income Tax, Meerut.

2. BECAUSE the AO as well as the learned Commissioner of Income Tax (Appeals) erred in law and on fact treating the Golf Course running and involved in commercial activities without appreciating the fact that the restaurant & Swimming Pool is an auxiliary part of the Golf Course which is not opened for profit motive but only to facilitate to the members of the Golf Course.

3.

BECAUSE the AO as well as the learned Commissioner of Income Tax (Appeals) erred in law and on fact by treating the Golf Course running and involved in commercial activities and not taking into account the fact that whatever the surplus (receipts) arrived is utilized for furtherance of the objects of the Golf Course and not for the benefit of the members of the Golf Course.

4.

BECAUSE the AO as well as the learned Commissioner of Income Tax (Appeals) has erred in law and on fact in not allowing the income of the Golf Course as exempt U/s 11(1).

5.

That the AO as well as the learned Commissioner of Income Tax (Appeals) erred in law and on facts, While considering the Objectives of the Appellant as commercial , Whereas the Objectives are Charitable and covered under section 2(15) and Explained by us during the Course of our hearings.

6. BECAUSE the AO and the Ld CIT(A) had erred in law and facts by not allowing the Brought Forward of losses, if they had considered it as carrying on the Commercial Activities and not the Charitable Activities as Considered and Allowed by the CIT, Meerut by allowing the Registration U/s 12AA.

7. BECAUSE the Ld. AO as well as Hon'ble CIT (A) based their orders relying upon the case of Bangaluru Club Vs. CIT (2013) 29 Taxman 29 (SC), however, the facts of the assessee's case are not in coincidence with that case on the issue of 'Principal of Mutuality", As the Appellant is a charitable Entity Exempt from Tax U/s 11(1).

8. BECAUSE the Ld AO in his Order for Asstt Year 2012-13 has considered the Appellant as a Charitable Entity and has allowed the Exemption of Income U/s 11(1).” 7. At the time of hearing, Learned Authorised Representative for the appellant/assessee submitted synopsis and stressed upon point nos. 5 to 7, reproduced as under:

5. AO raised the Question of Running a Bar & Restaurant - a) The Food and Liquor is served by the Caterer, who is Appointed through the Tender, for a Certain term. b) The Food is billed by the Caterer. c) The Liquor is billed in the name of the Assessee Club, as the Liquor License was issued in the name of the Noida Golf Course" from State Excise Department, on 12/08/1992 and which is non transferable. Page 15-17 of Paper Book Dt. 27/06/2024. (Submissions made in Reply Dated 27/06/2024-Page No. 5 Para G) d) It is just circumstantial that the billing has to made in the name of the Club.

6. In various Assessments completed U/s 143(3), the AO had never made the Interest Income Taxable, ie AY 2012-13, AY 2018-19. (Page 10-12

of Paper Book Dt. 23/01/2024 and Page No. 22-28 of Paper Book Dt. 08/05/2025) 7. In particular, In the Assessment Year 2018-19-the AO had treated the Assessee as business enterprise in absence of ineligibility of Section 11 &12 of the IT Act and treated the income as below, which is being presented in a similar way in the Year of the present Appeal, ie AY 2009- 10:- AY 2018-19 AY 2009-10 Gross Receipts as 11,07,15,401 4,80,17,011 per ITR (Read Financial Statements) Less: 14,87,98,154 5,08,88,505 Expenditures as per Financial Statements Total Income (38082753) (28,71,494) Refer Assessment Order of assessment year 2018-19 (Page 27 of paper book dated 08.05.2025 and page 41 of paper book dated 27.06.2024). “5. AO raised the Question of Running a Bar & Restaurant - a) The Food and Liquor is served by the Caterer, who is Appointed through the Tender, for a Certain term. b) The Food is billed by the Caterer. c) The Liquor is billed in the name of the Assessee Club, as the Liquor License was issued in the name of the "Noida Golf Course" from State Excise Department, on 12/08/1992 and which is non transferable. “Page 35-37 of Paper Book Dt. 27/06/2024. (Submissions made in Reply Dated 27/06/2024-Page No. 10 Para G) d) It is just circumstantial that the billing has to made in the name of the Club.

6.

In various Assessments completed U/s 143(3), the AO had never made the Interest Income Taxable, ie AY 2012-13, AY 2018-19 (Page 27-29 of Paper Book Dt. 27/06/2024 and Page No. 22-28 of Paper Book Dt. 08/05/2025)

7.

In particular, In the Assessment Year 2018-19-the AO had treated the Assessee as business enterprise in absence of ineligibility of Section 11 &12 of the IT Act and treated the income as below, which is being presented in a similar way in the Year of the present Appeal, ie AY 2010- 11:- AY 2018-19 AY 2010-11 Gross Receipts as 11,07,15,401 5,83,91,104 per ITR (Read Financial Statements) Less: 14,87,98,154 6,81,63,051 Expenditures as per Financial Statements Total Income (38082753) (97,71,947)

Refer Assessment Order of AY 2018-19 (page 22-28 of Paper Book Dt. 08/05/2025) and Page No.60 of Paper Book Dt. 27/06/2024)”

8.

Learned Authorised Representative for the appellant/assessee submitted that assessee is Club and is engaged in promotion of sport of gulf. The assessee- club has been registered under Section 12A of the Act. In order under Section 143(3), the Ld. AO has not made interest income taxable for the assessment year 2018-19. Ld. AO has treated the assessee as business enterprises in absence of ineligibility of section 12 of the Act as mentioned in Point No.7 of the synopsis.

9.

Learned Authorised Representative for the Department of Revenue submitted that the appellant/assessee cannot be permitted to take new plea.

10.

From examination of record in light of aforesaid rival contentions, undisputedly, it is a fact that the assessee club is engaged in Promotion of sport of golf is registered under Section 12A of the Act vide order dated 11.11.2000 of Ld. CIT(A), Meerut. In assessment years 2009-10 and 2010-11, Ld. AO vide orders dated 07.12.2011 and 26.03.2013 made additions of Rs.56,99,607/- and Rs.34,97,366/- respectively of interest as income from other sources. Ld. CIT(A) vide orders dated 25.01.2015 upheld the orders of Ld. AO by relying on principle of mutuality and doubting the activities of assessee’s club.

11.

Ld. AO in order dated 04.03.2021 Pages 22 to 28 of paper books for the assessment year 2018-19 has not made interest income as taxable. Ld. AO has treated the assessee as a business enterprise in absence of ineligibility of sections 11 and 12 of the Act and treated the income as mentioned in point no.7 of the synopsis.

12.

In view of above material facts and circumstances in the interest of justice, it is considered expedient to set aside the orders dated 07.12.2011 and 26.03.2013 of the Ld. AO and 25.01.2015 of Ld. CIT(A) and restored the matter to the files of the Ld. AO for verification of the facts and figures mentioned in para 7 of the synopsis and to pass a fresh order keeping in view the order dated 04.03.2021 for assessment year 2018-19 after affording a fair opportunity of hearing to the assessee in accordance with law.

13.

No other grounds of appeal was argued and are left open.

14.

In the result, both the appeals of the assessee are allowed for statistical purposes.

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