ACIT (E), NEW DELHI vs. DELHI & DISTRICT CRICKET ASSOCIATION, NEW DELHI

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ITA 2861/DEL/2017Status: DisposedITAT Delhi19 September 2019AY 2011-125 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to the benefits of Sections 11 and 12 of the Act, as the facts were identical to previous years where coordinate benches had ruled in favour of the assessee. The CIT(A)'s order was found to be without illegality or irregularity.

What were the facts?

The assessee, a cricket association registered under Section 12A, had its registration withdrawn for AY 2009-10 onwards. For AY 2011-12, the AO made additions treating its activities as business due to receipts from sponsorship, membership fees, and rent. The CIT(A) allowed exemption under Section 11, following earlier orders.

What were the issues?

Whether the assessee's activities, including sponsorship and membership fees, constitute business or trade, thereby disentitling it to charitable exemption under Section 11. Whether the CIT(A) erred in allowing exemption based on previous years' orders.

Which sections of the Income-tax Act were involved?

Section 12A,Section 11,Section 12,Section 40A(3),Section 2(15)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: SHRI K. NARASIMHA CHARY & SHRI ANADEE NATH MISSHRA

For Appellant: CA Ms Surbhi Goyal, CA
For Respondent: Ms Rachna Singh, CIT DR, CA Ms Surbhi Goyal, CA
Hearing: 3.09.2019

ORDER PER K. NARSIMHA CHARY, J.M. Challenging the order dated 3.2.2017 of the learned Commissioner of Income-tax (Appeals)-40, New Delhi {for short “Learned CIT(A)”} passed in Appeal No.104/14-15, revenue preferred this appeal.

2.

Brief facts of the case are that the assessee is an Association established to encourage and promote the game of cricket in the province of Delhi and district of Karnal which was registered under section 12 A of the Income Tax Act, 1961 (for short “the Act”). The registration was, however, withdrawn w.e.f. 1.4.2009 for assessment year 2009-10 onwards, to be restored by the Tribunal vide order dated 13.01.2015.

3.

For assessment year 2011-12, the assessee filed the return of income on 17.02.2012 declaring nil income but the assessing officer determined income of the assessee by making certain additions on account of TV sponsorship fee received from BCCI, prior period expenses, disallowance under section 40A (3) of the Act, depreciation as per Companies Act etc on the ground that the assessee is involved in the business activities as per proviso 1 and 2 of Section 2(15) of the Act because the assessee had received sponsorship fee, casual membership fee, permanent membership fee, rent from the ground, collection from the health club, ticket sale from public and corporate houses etc.

4.

Aggrieved by the same assessee preferred an appeal. Ld. CIT(A) vide impugned order, while following the decisions of the Tribunal for earlier years as well as his own orders for the Assessment Year 2012-13, reached a conclusion that the assessee is not carrying on activities with any profit motive or with any self-interest and the contribution received by way of sponsorship, advisement, sale of tickets etc and user charges on the facts of this case, do not convert the charitable activity into trade, commerce or business activity and consequently directed the Assessing Officer to allow exemption under section 11 to the assessee with all consequential benefits.

5.

Challenging the said findings of the Ld. CIT(A), Revenue preferred this appeal contending that the assessee had shown receipts from sponsorship income, sale of liquor, income from corporate boxes, sale of

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