ALL INDIA CHESS FEDERATIION ,CHENNAI vs. ITO EXEMPTIONS WARD 1, CHENNAI

The facts in all the three appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For brevity, we shall take up the appeal in ITA No.28/Chny/2023 for A.Y 2015-16 as lead case. The grounds of appeal raised by the assessee for A.Y 2015-16 are as under: “1. The re-opening of the assessment for this assessment year on the reasoning of the Assessing Officer is unsustainable and untenable in law and in the facts and circumstances of the case and hence the CIT(A) ought to have quashed the reassessment.

The Commissioner of Income Tax (Appeals) has erred in not appreciating in the proper perspective the grounds of appeal and the submissions of the Appellant Assessee both on facts and in law against the re-opening of the assessment by the Assessing Officer.

The Commissioner of Income Tax (Appeals) erred in law to conclude, that, based on the findings of the Hon'ble Competition Commission of India in their order dated 12/7/2018, the re-opening of the assessment for this year is sustainable.

2 The commissioner of Income Tax (Appeals) erred in concluding that the facts as noted by the Competition Commission of India were not before the Income Tax Appellate Tribunal when the Appellate Tribunal dealt with the Appellant's case for the earlier assessment years.

3 The Commissioner of Income Tax (Appeals) failed to note that the Competition Act 2002 and the Income Tax Act 1961 are for different purposes and operates and made applicable in totally different situation, different purposes and on different considerations and consequently the approach of the adjudicating Authorities for the ITA Nos.28, 29 & 30/Chny/2023

4 The Commissioner of Income Tax (Appeals) failed to note that with reference to the objects of the Appellant Assessee and in its status as a recognized Sports Federation by the Govt. of India carrying out its activities in terms and in compliance with the National Sports Code and read with the Circular issued by CBDT dated 24.9.1984, the Appellant Federation promoting the Games would be a charitable purpose within the meaning of Sec 2(15) of the IT Act.

2 The Commissioner of Income Case Tax (Appeals) ought to have seen that the decision of the Hon'ble court is prospective only and in the light of issue on hand is already a decided one by the Hon'ble Income Tax Appellate Tribunal and already attained finality, the tax authorities applying such decision to the case on hand does not arise.

3 The findings of the Commissioner of Income Tax (Appeals) that the activities of the Appellant is being run as a normal commercial enterprises and there is no element of charity or public utility is unsustainable.”

The assessee is a registered society formed for promotion, management and development of the game of chess in India. The assessee is a recognized Sports Federation in India by Ministry of Youth Affairs and Sports, Government of India and its functions and activities are governed and controlled by the National Sports Development Code issued by the Government of India. The assessee is registered u/s. 12AA of the Income-tax Act, 1961 (hereinafter “the Act”) with the DIT(E), Chennai. The A.O has reopened the assessment

The Ld. Authorized Representative (A.R) of the assessee before us has challenged the order of Ld. CIT(A) confirming the reopening of assessment and upholding findings of A.O that the assessee is not involved in any charitable activities. The Ld. AR has argued that the Hon’ble ITAT in assessee’s own case for AY 2009-10 to 2014-15 has held that the assessee is engaged in charitable activities and the order of ITAT has been final. The Ld. AR has submitted that the A.O has reopened the case on the basis of borrowed satisfaction of CCI order and therefore, the reopening is not valid. The Ld. AR has argued that the decision of Hon’ble Supreme Court in the case of ACIT vs. Ahmedabad Urban Development Authority, supra is prospective and not applicable in assessee’s case as the issue has already been decided by the Hon’ble ITAT.

The Ld. Departmental Representative (DR), on the other hand, has justified the reopening and placed the reasons recorded by the A.O on record. The Ld. DR also submitted that the decision of ITAT,

We have heard the rival submissions, and perused the materials available on record including the order of Ld. CIT(A) and the order of Competent Commission of India (CCI). The assessee has filed return of income on 10.09.2015 claiming exemption u/s. 11 of the Act. The return was not scrutinized u/s.14(3) of the Act. The A.O reopened the assessment on the basis of information contained in CCI order that the assessee is an “enterprise” and engaged in revenue generating activities. The Ld. CIT(A) after going through the reasons recorded and assessee’s arguments has upheld the reopening of the assessment. The main arguments of assessee has been that reopening was on borrowed satisfaction and there was no tangible material available with A.O. The assessee has argued that the Hon’ble ITAT in earlier years has held the activities for charitable purpose. We find that A.O has reopened the assessment on the basis of order CCI order and enquiry

The assessee has also taken a ground that assessment has been reopened assessment after four years and the competent authority to grant sanction was CIT, but approval in this case has been taken by Addl. CIT. The LD AR has relied upon various case laws. We find that the Additional Commissioner was the competent authority to reopen the case before 31.03.2020. However, due to TOLA , the time limit was extended up to 31.03.2021. The issue of approving authority in such cases has been settled by the Hon’ble Supreme Court in the case of Union of India & Ors. Vs. Rajeev Bansal in Civil Appeal No.8629 of 2024 dated 03.10.2024 (SC) holding that in the case of section 151 of the old regime, if the time limit of four years from the ITA Nos.28, 29 & 30/Chny/2023

As regard to arguments of Ld. AR, that activities of assessee has been held for charitable purposes by the Hon’ble ITAT in assessee’s case for A.Y 2009-10 to 2014-15, it is seen that the ITAT in assessee’s case in ITA No/184/Mds/2013 dated 09.05.2014 for A.Y. 2009-10 has held that recognized sports association in India, who imparts knowledge in sports, promotion of sports by conducting various sports activities in all branches fall within the scope of education as defined under the amended provisions of section 2(15) of the Act. The Bench accordingly held the objects of assessee fall within the scope of first limb of the amended provisions of section 2(15) of the Act viz., education. This order was followed in A.Y. 2010-11 to 2012-13. However , subsequent to this decision, Honorable Supreme Court in the case of ACIT vs. Ahmedabad Urban Development Authority, supra, clubbing number of appeals pertaining to statutory bodies, trade promotion bodies, State Cricket Associations etc. has elaborately discussed as what constitutes charitable activities and interpreted section 2(15) of the Act holding that sports associations will not fall

We find that the identical issue is involved in assessee’s appeals for A.Ys 2016-17 & 2017-18 also and accordingly, our adjudication above in A.Y 2015-16 is mutatis mutandis applies therein also. Therefore, for the similar reasons, we dismiss the appeals in ITA Nos.29 & 30/Chny/2023 as well.

In the result, all the three appeals filed by the assessee are dismissed. Order pronounced on 10th January, 2025. (एबी टी. वक ) (ABY. T. Varkey) ाियक सद! / Judicial Member (जगदीश) (Jagadish) लेखा सद! /Accountant Member चेनई/Chennai, दनांक/Dated: 10th January, 2025. EDN/-