M/S CHHATTISGARH STATE CRICKET SANGH,RAIPUR (CG) vs. THE COMMISSIONER OF INCOME TAX, RAIPUR (CG)

In order to adjudicate the proviso to section 2(15), we would revert to the factual position with regard to issue in hand: Association (supra.) before the Co-ordinate Bench of the Tribunal, Chennai, the facts are that the assessee society was affiliated to Board of Control for Cricket in India and assessee derives income from subscription, rent for hiring cricket ground, sponsorship, fee for providing service to IPL, income from advertisement, subsidy/subvention from BCCI sale of tickets for conducting matches, restaurant and catering income. Assessee claimed exemption u/s.11 of the Act and the Assessing Officer disallowed the claim of the assessee mainly on the ground that activity of the assessee was commercial in nature. The Assessing Officer also found that proviso to section 2(15) would come into operation since gross receipts of assessee exceeded prescribed limit and the Ld. CIT(A) upheld that order. The Co-ordinate Bench of the Tribunal, Chennai has held that activity of the assessee could not be considered to be business activity. The assessee was not providing any services to any trade or commerce or industry. Therefore, the proviso to section 2(15) was not applicable to the assessee and the assessee was entitled for exemption u/s.11 of the Act. In the present case also, the assessee is receiving money from BCCI as subsidy for providing services in the IPL matches, for conducting Cricket matches for hiring ground only to promote the Cricket and encouraging new talent in the field of Cricket and objects of all the other Cricket associations of any other state are similar in nature. Therefore, the assessee has not provided any services to any trade, commerce or industry as defined in the proviso to section 2(15) of the Act.

The Hon’ble Apex Court in the case of CIT Vs. Gujarat Maritime Board reported (supra.) has held that if the primary purpose and the predominant object is for welfare of general public then the purpose would be charitable in nature.

Before us, the Ld. AR of the assessee also submitted that predominant object and activity of all the State Association affiliated to BCCI are almost similar. Almost all the state associations are enjoying benefit of 12A and the assessee is denied of the same in spite of being engaged in exactly same activity. The Ld. AR of the assessee has placed reliance on the decision of the Hon’ble Bombay High Court in ITA No.500 to 504/Nag/2016 in the case of Tax wherein it was held that when objects of two institutions are similar then it is not open to the Income Tax Department to apply different parameters to different trusts carrying similar objects and similar purposes seeking grant of exemption u/s.80G of the Act. We have already analyzed the objects of the trust vis-a-vis other Associations of various other State under BCCI supervision for promoting Cricket. We have also examined that the objects of the other State’s Associations are similar to that of the assessee and when those Associations are enjoying the benefit of 12A and exemption u/s.80G of the Act then the assessee on the similar parameters and objects is entitled for registration u/s.12AA of the Act and exemption u/s.80G of the Act. Moreover, the facts demonstrate that this is not a Private Trust for the benefit of a single family but a society in which any person of general public of any caste, community or creed can become the member of the assessee society without any restriction. The assessee society runs through its members. The society performs all the function only through its members. The members of the society are fully dedicated to achieve the main object of the society. All the objects of the society are for the promotion of Cricket. Society has been formed with the like-minded members whose aim is to promote Cricket sports in India. The object nowhere speaks or intends to provide any financial assistance to its members.

We have already examined that the assessee is not hit by the proviso to section 2(15) of the Act since it does not conduct any service or activities which are in the nature of trade, commerce or business. All the facts being examined vis-à-vis taking into consideration of judicial pronouncements placed before us and examining object of the assessee’s society provides that it is for charitable purpose for advancement of any other object of general public utility. The Hon’ble

The Hon’ble Supreme Court of India in the case of Ahmedabad

In the instant case of the assessee, the work of the assessee society is to promote Cricket so as to bring forth new talents and provide opportunity to the people for representing the State as well as the Country. Therefore, the object of the assessee is for charitable purpose and nothing else. In view of the matter and as per the aforesaid discussion of facts and judicial pronouncements, we set aside the order of the Ld.CIT(Exemption) and direct the Ld.CIT(Exemption) to grant registration u/s.12AA of the Act to the

In the result, appeal of the assessee is allowed.”