THE INDIAN GOLF UNION,DELHI vs. CIT(E), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’ : NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA No.5524/DEL/2026 ITA No.5525/DEL/2026 The Indian Golf Union, vs. CIT (Exemptions), 14, 2ND Floor, Anand Lok, Delhi. August Kranti Marg, Delhi – 110 049. (PAN : AAATT3232B) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Abhishek Singla, CA REVENUE BY : Shri Vikram Singh Sharma, CIT DR Date of Hearing : 22.06.2026 Date of Pronouncement : 22.06.2026 O R D E R PER S. RIFAUR RAHMAN, AM : 1. The assessee has filed appeals against the order of the Learned Commissioner of Income-tax (Exemptions) [“Ld. CIT(E)”, for short] dated 24.03.2026 under section 12AB (1)(b)(ii)(B) and 80G of the Income-tax Act, 1961 (for short ‘the Act’). 2. Since the issues are common and the appeals are connected, hence the same are heard together and being disposed off by this common order. We take up the

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assessee’s appeal being ITA No.5525/Del/2026 as lead case to adjudicate the issues under consideration raising following grounds of appeal :- “1. On the basis of the facts and circumstances of the case the learned Commissioner of Income Tax (Exemption) erred in law by the rejecting the application of the Assessee for registration under section 12A(1 )(ac)(ii) of the Income Tax Act. 2. On the basis of the facts and circumstances of the case the learned Commissioner of Income Tax (Exemption) erred in interpretation and application of section 2(15) of the Income Tax Act 1961. 3. On the basis of the facts and circumstances of the case the learned Commissioner of Income Tax (Exemption) erred in interpretation and application of decision of Hon'ble Supreme Court of India in case of Ahmedabad Urban Development Authority V/s CIT.” 3. Brief facts of the case are, assessee is a society duly registered under section 12A(1)(ac)(vi) of the Income-tax Act, 1961 (for short ‘the Act’). The assessee is the Apex Board of Golf in India working for the promotion of sport of Golf in India. It is recognised by Ministry of Youth Affairs and Sports. The assessee filed an application dated 29.09.2025 in Form 10AB seeking registration u/s 12A(1)(ac)(ii) of the Act. Based on the questionnaire issued, the assessee has filed its submissions vide letter dated 08.01.2026 and 23.01.2026. After examination of the same, ld. CIT (E) observed that assessee was established as a sport association for promotion, regulation and development of the sports of Golf in India, its activities include organizing tournaments, conducting training and coaching programmes affiliating and regulating golf clubs and representing India at international Golf. On perusal of the audited accounts of the society, he further observed that society is

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receiving subscriptions, course rating income etc.. He observed that these receipts arise from specific contracts and service agreements entered into and various organisations for which consideration is charged by the society. He listed the details of receipts made by the assessee during FYs 2022-23 to 2024- 25. The same is reproduced at page 4 of the impugned order. From the above statements, he observed that the sponsorship income is 86.34%, 88.28% and 87.14% in FYs 2022-23, 2023-24 and 2024-25 respectively. Based on the above observation, he came to the conclusion that sponsorship received by the assessee are commercial in nature and apparently more than 20% of the total receipts and he observed that the society is mainly involved in activities for generation of income rather than the charity. He came to the abovesaid conclusion mainly on the basis of pattern of receipts to the society and without considering the actual receipts and payment of the society. After considering the submissions of the assessee, ld. CIT (E) observed that the assessee fails on the strict interpretation of section 2(15) of the Act and also decision of Hon’ble Supreme Court in the case of Ahmedabad Urban Development Authority (AUDA) in Civil Appeal No.21762 of 2017. Based on the above decision, he came to the conclusion that the assessee has earned more than 20% of the total receipts as commercial income. Further, ld. CIT (E) relying on the decision of Hon’ble Supreme court, observed that the Court laid down a general test that when the charges are markedly or significantly above the cost incurred by the assessee in question, they would fall within the mischief of cess or fee or any

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other consideration towards trade, commerce or business. After analysing the financials of the assessee which is reproduced at page 13 of the impugned order, he observed that assessee has gross margin of 14.48%, 19.43% and 25.97% in FYs 2022-23, 2023-24 and 2024-25 respectively. Further, net margin of 4.8%, 8.02% and 10.13% respectively in the abvoesaid FYs. Based on the above observations, he came to the conclusion that assessee has substantial net surplus in absolute terms, hence its markup for commercial transaction is not nominal. In other words, the assessee fails the test of nominal markup as enumerated in the case of AUDA (supra). Therefore, the Indian Golf Union does not qualify as a charitable institution within the meaning of section 2(15) of the Act. Accordingly, he rejected the application filed by the assessee. 4. At the time of hearing, ld. AR of the assessee submitted The Indian Golf Union is a society duly registered under section 12A(1)(ac)(vi) of the Income-tax Act, 1961 and the Assessee is the apex body of golf in India, working for the promotion of sport of golf in India and the Assessee is recognised by the Ministry of Youth Affairs and Sports. He submitted that the assessee, with an intent to obtain approval under section 12A(1)(ac)(ii), filed Form No. 10AB vide Acknowledgment No.872562560290925 dated 29/09/2025 within the prescribed time. He submitted that on 13.03.2026, the ld. CIT (E) issued the show cause notice asking why application for registration under 12A should not be rejected on the grounds that receipt from activity in the nature of trade,

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commerce or business exceeds the prescribed limit of 20%. He submitted that in response to the show cause notice the Assessee in its reply vide 20th March 2026 submitted that the receipts of the Assessee is not of nature of "receipts from the activities in the nature of trade, commerce or business" He also submitted that the ITAT for the AY 2012-13 and CIT(A) for multiple assessment years upheld the contention of the Assessee that receipts of the Assessee is not of nature of "receipts from the activities in the nature of trade, commerce or business" Further he submitted that the Assessee also submitted that the Assessee is qualified to be treated as a charitable organization in accordance with the principles laid down by the Hon'ble Supreme Court of India in case of Ahmadabad urban Development Authority Vs CIT. 5. On the other hand, ld. DR of the Revenue heavily relied on the findings of the ld. CIT (E). 6. Considered the rival submissions and material placed on record. We observed that the assessee is a society duly registered u/s 12A(1)(ac)(vi) of the Act. It is the Apex Body of Golf in India working for the promotion of sport in India. We observed that ld. CIT (E) has rejected the application of the assessee for registration on the basis that assessee receives majority of the revenue from sponsorship from various corporate invariably it is between 80% to 90% of the total receipts. Merely on the basis of above sponsorship, ld. CIT (E) came to the conclusion that most of the sponsorship is nothing but commercial activities. It is fact on record that assessee was granted registration earlier on

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the basis of its aims and objectives of promotion of sport of Golf in India. In the present time, it is not possible for any sports to survive without sponsorship and it is not feasible to exist only on subscription fees. What is relevant is the existence of society for promotion and adherence to its aim and objectives. In this case, the main aim is to promote of sports of Golf in India, to achieve that assessee is involved in conducting tournaments, conducting training and coaching programmes etc. in India. It is also fact on record that in the assessment year 2012-13 and in other assessment years, the receipts of the assessee was held to be not in the nature of receipts from activities from trade, commerce or business. In our considered view, ld. CIT (E) has interpreted the decision of Hon’ble Supreme Court in the case of AUDA (supra) which suits his opinion. Further, in our view, the assessee was recognised all these years for promotion of sport of Golf in India and suitably ld. CIT (E) has interpreted the sponsorship as commercial activities without substance. Therefore, for the sake of justice, we are inclined to remit this issue back to the file of ld. CIT (E) to appreciate the broader aims and objectives of the assessee and merely because there is a profit in the recent years does not make the activities not charitable. We direct him to interpret the various decisions by the coordinate Bench and other appellate forums on the nature of receipts of the society. Accordingly, we are remitting the issue for registration u/s 12AB to the file of ld. CIT (E) and direct him to grant registration after properly appreciation the facts on record and as per law.

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Sd/- sd/- (RAJ KUMAR CHAUHAN) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated : 15.07.2026 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI