GANDHINAGAR CRICKET AND SPORTS CLUB,CHENNAI vs. CIT, EXEMPTIONS,, CHENNAI

आयकर अपीलीय अधिकरण, ‘बी’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI श्री एबी टी वर्की, न्याययर्क सदस्य एवं श्री एस. आर. रघुनाथा, लेखा सदस्य के समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3619/Chny/2025 निर्धारण वर्ा / Assessment Year: Not applicable Gandhinagar Cricket and The Commissioner of Income- Sports Club vs. tax (Exemption) 63-A, IV Main Road Chennai. Gandhinagar, Adyar Chennai – 600 020. [PAN: AABAG4936D] (अपीलधर्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलधर्थी की ओर से/Appellant by : Shri. J.Saravanan, Advocate & Shri. R.Kannan, Advocate प्रत्यर्थी की ओर से/Respondent by : --- None --- सुिवधई की तधरीख/Date of Hearing : 04.06.2026 घोर्णध की तधरीख/Date of Pronouncement : 08.07.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : The present appeal has been preferred by the Assessee against the order dated 30.09.2025 passed by the Learned Commissioner of Income Tax (Exemption), Chennai [hereinafter referred to as “the Ld. CIT(E)”] in respect of an application filed in Form 10AB seeking registration u/s.12A(1)(ac)(vi)(B) of the Income Tax Act, 1961 (in short “the Act”).

:-2-: ITA. No.3619/Chny/2025 effect from 28.08.1956 with the object to promote the game of cricket, football, hockey, athletic sports for the benefit of all residents of Adyar and surrounding places. The society applied for registration u/s.12AB of the Act on 19.03.2025. In this application, the society had inadvertently mentioned its generic object of education instead of general public utility. However, on perusal of the application, the ld.CIT(E) rejected the application stating the society has received membership fees and subscription, which are not voluntary in nature, and engaged in the activity of trade, commerce and business. Further, he stated that the society is running on the principle of mutuality and has not applied its funds towards education. Therefore, he concluded that the society is existing wholly for the benefit of group of people but not for public at large and rejected the application by passing an order dated 30.09.2025. 3. Aggrieved by the order of the ld.CIT(E), the assessee is in appeal before us. The ld.AR for the assessee submitted that the ld.CIT(E) has not considered the complete details of the assessee, which was submitted during the course of proceedings of registration u/s.12AB of the Act. Further, he raised number of grounds before us by filing his written submissions along with number of documents for our consideration including the details of activities carried out by the assessee. He also relied on number of judicial pronouncements in a separate case laws book and furnished a copy of the same during the hearing of the case and prayed for one more opportunity before the ld.CIT(E) as the application has been rejected by the authorities based on the erropr in the application by filling the activity as education instead of sports activities. 4. Per contra, the ld.DR submitted that the ld.CIT(E) had completely considered all the submissions before rejecting the application, and hence, prayed for forming the same. 5. We have heard the rival submissions, perused the material available on record and carefully gone through the impugned order of the ld.CIT(E), the documents placed before us and the judicial precedents relied upon by the ld.AR.

:-3-: ITA. No.3619/Chny/2025 6. The issue that arises for our consideration is whether the ld.CIT(E) was justified in rejecting the assessee's application for registration u/s.12A(1)(ac)(vi)(B) of the Act by concluding that the assessee was carrying on commercial activities, governed by the principle of mutuality and not existing for charitable purposes. 7. The undisputed facts reveal that the assessee is a Society registered under the Societies Registration Act, 1860 as early as on 28.08.1956. The primary objects of the Society, as evident from its Memorandum of Association, are to promote sports and games such as cricket, football, hockey, athletics and other sporting activities for the benefit of the residents of Adyar and the surrounding areas. The Society has been in existence for several decades and claims to have been continuously engaged in the promotion of sports. 8. The application seeking registration u/s.12AB of the Act was filed in Form No.10AB on 19.03.2025. It is the specific case of the assessee that while filling up the online application, its nature of charitable activity was inadvertently mentioned under the generic head "Education" instead of the appropriate category relating to promotion of sports falling under the object of general public utility. According to the assessee, the rejection of the application has substantially proceeded on the basis of this inadvertent error coupled with an incomplete appreciation of the activities actually carried on by the Society. 9. We find from the impugned order that the ld.CIT(E) has concluded that the Society receives membership fees and subscriptions which are compulsory in nature and therefore its activities partake the character of trade, commerce or business. The ld.CIT(E) has further held that the Society functions on the principle of mutuality, has not carried out educational activities and exists only for the benefit of its members rather than the public at large. 10. However, during the course of hearing before us, the ld.AR has placed considerable additional material on record including detailed written submissions, copies of the Memorandum of Association, details of sporting activities undertaken by the Society over several years and various judicial

:-4-: ITA. No.3619/Chny/2025 pronouncements in support of its claim. These materials, according to the assessee, were either not properly appreciated or were not considered while passing the impugned order. 11. At the stage of grant of registration u/s.12AB of the Act, the scope of enquiry by the prescribed authority is primarily confined to examining the objects of the institution and the genuineness of its activities. The authority is required to satisfy itself whether the objects are charitable in nature and whether the activities carried on are genuine. Issues relating to the application of income, availability of exemption in a particular assessment year, applicability of the principle of mutuality or the impact of the proviso to section 2(15) are matters which ordinarily arise during the course of assessment on the basis of actual facts and financial statements of the relevant year. Such issues cannot, by themselves, constitute the sole basis for refusing registration unless it is demonstrably established that the very objects of the institution are non- charitable or that its activities are not genuine. 12. In the present case, we find that the ld.CIT(E) has proceeded on the premise that the assessee was claiming to be engaged in educational activities, whereas the assessee has consistently maintained before us that its principal charitable object has always been promotion of sports and that the mention of "education" in Form No.10AB was merely an inadvertent mistake while filing the online application. The Memorandum of Association placed before us prima facie supports this contention. Since the rejection appears to have been substantially influenced by the manner in which the activity was reflected in the application form, we are of the considered opinion that the assessee deserves an opportunity to place the correct factual position before the prescribed authority. 13. We also notice that the assessee has filed several additional documents and detailed explanations before this Tribunal in support of the genuineness of its activities. Since these documents require factual examination and verification by the prescribed authority, it would neither be appropriate nor proper for us to undertake such an exercise for the first time at the appellate

:-5-: ITA. No.3619/Chny/2025 stage. Considering the totality of the facts and circumstances, and bearing in mind that registration u/s.12AB is a gateway provision intended to examine the charitable character of an institution, we are of the considered opinion that the ends of justice would be adequately met by restoring the matter to the file of the ld. CIT(E) for a fresh examination. 14. Accordingly, we set aside the impugned order passed by the ld. CIT(E) and restore the matter to his file with a direction to examine the assessee's application afresh after considering the correct nature of its charitable objects, the Memorandum of Association, the activities actually carried on by the Society, the written submissions and grounds raised before us, supporting documents and the judicial precedents relied upon by the assessee. The ld.CIT(E) shall afford adequate opportunity of hearing to the assessee and thereafter pass a reasoned and speaking order in accordance with law, uninfluenced by the observations contained in the earlier order. 15. Accordingly, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 08th July, 2026 at Chennai.

Sd/- Sd/- (एबी टी वर्की ) (एस. आर. रघुिधर्थध) (ABY T VARKEY) (S. R. RAGHUNATHA) न्याययर्क सदस्य/Judicial Member लेखधसदस्य/Accountant Member चेन्िई/Chennai, ददिधंक/Dated, the 08th July, 2026. Devadas आदेश की प्रनतललपप अग्रेपर्त/Copy to: 1. अपीलधर्थी/Appellant 2. प्रत्यर्थी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. पवभधगीय प्रनतनिधर्/DR 5. गधर्ा फधईल/GF Digitally signed by DEVADAS DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.07.09 16:43:06 +05'30'