DCIT (EXEMPTIONS), NUNGAMBAKKAM vs. M/S TAMILNADU TENNIS ASSOCIATION, SDAT, NUNGAMBAKKAM

ITA No.601/Chny/2022 - 2 - 2. The Ld. Sr. DR justified invocation of proviso to Sec.2(15) by Ld. AO and relied on the assessment order. The Ld. AR, on the other hand, submitted that the issue stood covered in assessee’s favor by orders of Tribunal in earlier years. The Ld. AR submitted that it has been held by the Tribunal that the assessee’s activities constitute ‘education’ and therefore, the proviso to 2(15) would not apply to the case of the assessee. Having heard rival submissions, the appeal is disposed-off as under.

The assessee is a registered trust u/s 12AA and it claimed exemption u/s 11 & 12 as applicable to a registered trust. The Ld. AO, considering the nature of income of the assessee, held that the main receipt of the assessee as well as main expenditure was in respect of conducting ‘Aircel Chennai Open Tournament’. The assessee was in receipt of various streams of income including sponsorship receipts. The profit was not incidental but substantial in nature. The activities of the assessee clearly come within the purview of ‘Business’. Finally, invoking the proviso to Sec.2(15), the surplus arising from this activity was brought to tax. Apart from this, the expenditure incurred outside India for training of players was also disallowed u/s 11(1)(a). After making various other adjustments including disallowance of depreciation, the income was computed as Rs.182.53 Lacs.

The Ld. CIT(A) relied upon Tribunal’s order in assessee’s own case for AYs 2009-10 & 2010-11, & 1758/Mds/2013 common order dated 28.11.2014. In this order, it was held that sports promotion would be human resource development and considering the polity declaration of government of India, sports is construed at par with education. Accordingly, the objects of the assessee would fall