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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SHRI PRAMOD M JAGTAP&
The instant appeal filed by the Revenue is directed against the order dated 23.10.2019 passed by the Commissioner of Income Tax (Appeals)-9, Ahmedabad arising out of the order dated 13.12.2017 passed by the DCIT(E), Circle-2, Ahmedabad under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2015-16.
Allowing the benefit of exemptions under Section 11 & 12 of the Act to the appellant association is the subject matter before us.
At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the issue is squarely covered by the judgment passed by the Hon’ble Gujarat High Court in assessee’s own case; ACIT(E) vs. Baroda Cricket Association Asst.Year –2015-16 - 2 - copy whereof has duly submitted before us. Such submission made by the Ld. A.R. has further not been controverted by the Ld. D.R. with all his fairness.
The assessee before us is registered trust vide Registration No. F/881/Baroda dated 04.11.1996 with Asstt. Charity Commissioner, Baroda. The said association engaged in promoting, developing and encouraging the game of cricket within its region and do all other identical objects associated with the main objects of the associations through power vested to the Managing Committee duly elected by the members of the association. The Ld. AO was of the view that the association is involved in carrying on the activity of “advancement of others objects of “general public utility” and such activity is in the nature of trade, commerce or business. In that view of the matter the activities of the assessee association has been made to be applied under the purview of proviso 1 & 2 of Section 2(15) of the Act, 1961 and thereby the exemption claimed under Section 11 &12 of the Act has not been allowed and the same has been added back to the income of the assessee which was, in turn, allowed and the addition was deleted by the First Appellate Authority. Hence, the instant appeal before us.
In fact, the Ld. CIT(A) following the decision passed by the Coordinate Bench in A.Ys. 2009-10, 2010-11 and 2011-12 in different State Cricket Association holding those Cricket Association are entitled to the benefits of Section 11 & 12 of the Act and the first proviso to Section 2(15) of the Act was not applicable in their case decided the appeal in favour of the assessee.
In this regard, we have carefully perused the order passed by the Hon’ble Jurisdictional High Court in Tax Appeal No. R/TAX APPEAL NO. 268 of 2012 & others. ACIT(E) vs. Baroda Cricket Association Asst.Year –2015-16 - 3 - While deciding the issue in favour of the assessee by rejecting the appeal preferred by the Revenue the Hon’ble Court was pleased to observe as follows: “144. The words 'public utility' or 'general public utility' are not capable of a precise meaning. The question whether service is public utility or not has to be discharged in the context of different situations but it is, as considered infra, well settled that public utility means public purpose depending upon the context in which it is used in the statute or the Rules. Indeed, in some decisions, public utility is considered very similar to one for public purpose (Hunter v A.G. 1909 AC 323, Babu Bankya Thakur v State of Bombay AIR 1960 SC 1203 and Jhandu Lal v States of Punjab AIR 1961 SC 343).
In cases arising under the Income Tax Act. 1922 as well as 1961 Act, it is held that the expression 'object of general public utility' must be construed by applying the standard of customary law and common knowledge amongst the community to which the parties interested belong. This test, applied in the Trustees of the Tribune, seems to have influenced judicial thinking in the subsequent decisions as well. The object of general public utility would include all objects which promote the welfare of the general public even it includes taking up steps effecting trade, commerce or manufacture if the primary purpose is for advancement of objects of general public utility [Andhra Chamber of Commerce(supra)], even if in an insignificant manner the person makes some profit in carrying out the objects [Surat Art Silk (supra)]. In other words, any activity for the benefit of the public or a section of the public, as distinguished from the benefit to an individual or a group of individuals, would be charitable purpose as the object is for advancement of general public utility. The expression includes all objects to promote the welfare of the public, and when an object is to promote or protect the interest of particular trade or industry that object becomes an object of public utility and would be charitable purpose (Gujarat Maritime Board (2007) 295 ITR 561 (SC) [see Commissioner of Income Tax vs. Agricultural Market Committee, (2011) 336 ITR 641 146. In our opinion, this could be termed as a charitable purpose which has as its motive advancement of an object of general public utility to which the exception carved out in the first proviso to Section 2(15) of the Act would not apply. ………… 177. In the case of N.N. Desai Charitable Trust (supra), this Court ruled that howsoever laudable the objects of the trust may be, and such object may lead one to believe that the activities of the trust are charitable in nature, but for the purpose of seeking exemption under Section 11 of the Act, the actual activities are to be seen and not just the objects. There need not be any debate on this proposition of law. In the case on hand, after a detailed scrutiny of the various activities, the tribunal has recorded a finding of fact that the activities, in fact, are charitable in nature.
In such circumstances, referred to above, we are of the view that the Tribunal Could be said to have taken a reasonable view of the matter, and having ACIT(E) vs. Baroda Cricket Association Asst.Year –2015-16 - 4 -
recorded a finding of fact based on the material on record, we should not disturb such finding of fact.
In the result, all the tax appeals fail and are hereby dismissed. The substantial questions of law, formulated in all the tax appeals, are answered in favour of the assessees and against the Revenue.”
Thus, respectfully relying upon the judgment passed by the Hon’ble Jurisdictional High Court we find no infirmity in the order passed by the Ld. CIT(A) in allowing the benefit of exemption under Section 11 & 12 of the Act to the appellant without any ambiguity so as to warrant interference. Hence, the appeal preferred by the Revenue is devoid of any merit and, thus, dismissed.