KARNATAKA STATE FOOT BALL ASSOCIATION,BANGALORE vs. INCOME TAX OFFICER(EXEMPTIONS)WARD-1 , BANGALORE

ITA No. 1832/Bang/2025 is filed by M/s. Karnataka State Foot Ball Association for Assessment Year 2022-23 and ITA No. 1833/Bang/2025 for Assessment Year 2024-25 against the Appellate Order passed by the Joint Commissioner of Income Tax (Appeals) – 9, Delhi (the Ld.CIT(A)) on 31.03.2025 for both the Assessment Years wherein the Appeals filed by the Assessee against the intimation order dated 13.06.2023 and 29.06.2025, respectively, passed by the Central Processing Centre (the Ld. Assessing Officer) passed u/s. 143(1) of the Income Tax Act, 1961 (the Act) was dismissed.

The facts show that Appeal for Assessment Year 2022-23 is filed late by 82 days and similar is the case for Assessment Year 2024-25. The Assessee has filed an application for condonation of delay along with the affidavit of Shri N. Nalapad Ahmed Haris, the Principal Officer of the Karnataka State Foot Ball Association. The condonation petition says that the Assessee has engaged one

The Ld. Authorized Representative reiterated the same facts.

The Ld. Departmental Representative vehemently objected to the same stating that delay is not caused for sufficient reasons hence may not be admitted.

We have carefully considered the rival contentions and perused the petition for condonation of delay, affidavit of the trustee of the Assessee, the affidavit of the tax consultant who took the blame on him for delay in filing of the Appeal, and we find that delay has been caused due to negligence on the staff of the counsel of the Assessee. Thus, we find that the delay is for sufficient cause as the Assessee should not be penalized for delay caused on account of the tax advisor. Both the Appeals stands admitted.

Brief facts of the case shows that Assessee is a trust registered u/s. 12A of the Income Tax Act and is assessed to income tax regularly. The Assessee is registered since 18.02.2002. However, as the fact shows that the Assessee had lost its trust deed and therefore it was not able to file form no. 10A seeking provisional renewal of registration as the copy of the trust deed was one of the preliminary documents required for application to be made in form 10A. However, later as advised by the consultant, the Assessee filed form no 10A by attaching the sworn affidavit of lost Memorandum of Association and bye-laws of Karnataka State Foot Ball Association to the Income Tax Department on 25.09.2024. Based on this, provisional registration was granted to the Assessee. The fact also shows that Assessee is in existence since 1953 and further there is no change in the objects of the trust. The registration is also available u/s. 12A of the Act from 18.02.2022 and is in continuation.

For Assessment Year 2022-23, the Assessee filed its return of income on 31.10.2022 at Rs. Nil/- claiming the income of Rs. 2,38,26,626/- as income and however, applied Rs. 2,27,17,342/- on the objects of the trust resulting into the excess of Rs. 35,73,994/- which was accumulated by filing from no. 10B on

Despite the above fact, the return of income filed by the Assessee was processed by the CPC u/s. 143(1) of the Act on 30.06.2023. The variation was that total income of the Assessee of Rs. 2,38,26,626/- was determined as income of the Assessee without granting any deduction of expenditure incurred on the objects of the trust of Rs. 2,27,17,342/- or accumulation of income of Rs. 35,73,994/-. The reason given by the CPC was that the Assessee could not give the details of registration or provisional registration or approval under the Income Tax Act. Therefore, the exemption claim of the Assessee was not allowed.

The Assessee preferred an Appeal before the Ld. CIT(A) stating all the above facts. However, the Ld. CIT(A) has held that in absence of registration, Assessee is not eligible to claim deduction u/s. 11 of the Act and accordingly, there is no defect in the intimation issued. Further, as the Assessee is not registered, the benefit of accumulation is also not granted. Thus, the Appeal of the Assessee is dismissed. 10. The Ld. Authorized Representative submitted that the Assessee has already been granted registration u/s. 12A of the Act since 18.02.2002 which has neither been cancelled nor withdrawn and therefore the Assessee cannot be considered as unregistered trust. Thus, the benefit of section 11 cannot be denied. He relied upon the decision of the Hon’ble Supreme Court in case of CIT v. Nagpur Hotel Owners' Association (2001) 247 ITR 201 (SC). The Assessee further submitted that the claim of deduction of expenditure is required to be granted to the Assessee as the same has been incurred for the object of the Trust. It was further stated that the taxation of the entire receipt without allowing the corresponding expenditure is contrary to the settled principles of the Income Tax. For this proposition, he relied upon the decision of the Hon’ble Delhi High Court in case of DDIT(E) v. Petroleum Sports Promotion Board (2014) 362 ITR 235. 11. It was further stated that the facts for Assessment Year 2024-25 are also identical. Thus, the Ld. Authorized Representative submitted that the Assessee may be allowed the exemption u/s. 11 of the Act and delete the adjustment made by the Ld. CPC.

The Ld. JCIT-DR vehemently supported the orders of the Ld. CPC as well as the Ld. CIT(A) stating that when the Assessee has failed to show the registration of the trust, the Assessee could not have been allowed the benefit of section 11 and section 12 of the Act. The accumulation is also subject to registration of trust.

We have carefully considered the rival contentions and perused the orders of the Ld. lower authorities. The facts clearly show that Assessee trust is in existence since 1953 registered u/s. 12A of the Act from 18.02.2002. The Assessee filed its return of income on 31.10.2022 showing the gross receipt of Rs. 2,38,26,626/-. The Assessee has incurred an expenditure of Rs. 2,27,17,342/- on its object of the trust and consequently, the balance sum of Rs. 35,73,94/- claimed as accumulation of total income. 14. The CPC has issued a communication to the CEO of the trust suggesting that Rs. 2,38,26,626/- could not be more than voluntary contributions received. Therefore, the exemption in excess of voluntary contribution is not allowable for exemption. The Assessee disclosed Rs. 2,62,91,336/- in partB-TI whereas the exemption was claimed of Rs. 2,62,91,336/-. According to part A, general information which was also not matching with information as per form no. 10AC. According to the CPC, there was a difference of Rs. 2,62,91,336/-. Further, in part B-TI, the claim of the Assessee is of accumulation of Rs. 35,73,994/- which was not allowed to the Assessee in accordance with the provisions of section 13(9) of the Income Tax Act. This adjustment was made as the Assessee did not reply to the enquiry of the CPC. This is evident from page no. 8 of 27 of the intimation. 15. Aggrieved with that intimation, the Assessee preferred an Appeal before the Ld. CIT(A). The claim of the Assessee is that Assessee has misplaced the trust deed and therefore, Assessee was unable to submit form no. 10A for the provisional or renewal of registration. Undoubtedly, according to the new provisions of taxation of trust, this trust was required to get a fresh registration u/s. 11 of the Act. The time limit for obtaining such registration was extended up to 31.03.2022. The trust could not get itself registered. 16. However, there is a provision in the Income Tax Act that if the trust applies for the registration, the power of condonation rests with the respective authorities. The trust could not apply for the same because of non-availability of the trust deed. The trust made an affidavit obtaining the trust deed. In the paper book filed before us, the Assessee has given a sworn affidavit as well as the copies of the Memorandum of Association of the Assessee Trust. Therefore, now the Assessee can make an application for the registration u/s. 12AB of the Act and after that filing an application for condonation of delay and thereafter claim the exemption. 17. Therefore, the Assessee is directed to file an application for registration u/s. 12AB on the basis of Memorandum of Association of the Assessee trust, which may be considered by the Ld. revenue authorities and corresponding application for condonation may also be filed with the respective authorities who may consider the same on the merits of the case. After that claim of exemption u/s 11 & 12 as well as of accumulation may be considered in accordance with the law. In view of the above facts and direction, we restore both the Appeals of the Assessee back to the file of Ld. Assessing Officer with above direction to the assessee as well as the ld. AO.

In the result, both the Appeals are allowed for statistical purposes.