KERALA CRICKET ASSOCIATION vs. THE ADDITIONAL COMMISSIONER OF INCOME TAX

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 7TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944 ITA NO. 37 OF 2012 AGAINST THE ORDER IN ITA 285/Coch/2009 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/Appellant:

KERALA CRICKET ASSOCIATION KCA COMPLEX, SASTHAMKOVIL ROAD, THYCAUD, THIRUVANANTHAPURAM-695014, REPRESENTED BY ITS HON.SECRETARY, MR.T.C.MATHEW.

BY ADVS. SRI. ADV. A SHANKAR (SR) ADV. ANNAMALAI., SRI.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOS SRI.BINU MATHEW SRI.B.J.JOHN PRAKASH SRI.MATHEWS K.UTHUPPACHAN SRI.TERRY V.JAMES SRI.TOM THOMAS KAKKUZHIYIL RESPONDENT/Respondent:

THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 2, THIRUVANANTHAPURAM-695003. OTHER PRESENT:

SR. ADV. P.K.R.MENON., ADV. NAVNEETH N NATH THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH ITA.38/2012, 39/2012 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 7TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944 ITA NO. 38 OF 2012 AGAINST THE ORDER IN ITA 287/Coch/2009 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/Appellant:

KERALA CRICKET ASSOCIATION, KCA COMPLEX, SASTHAMKOVIL ROAD, THYCAUD, THIRUVANANTHAPURAM-695014, REPRESENTED BY ITS HON.SECRETARY, MR.T.C.MATHEW.

BY ADVS. SR. ADV. A SHANKAR (SR) SRI.V.ABRAHAM MARKOS SRI.BINU MATHEW SRI.B.J.JOHN PRAKASH SRI.MATHEWS K.UTHUPPACHAN SRI.TERRY V.JAMES SRI.TOM THOMAS KAKKUZHIYIL RESPONDENT/Respondent:

THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 2, THIRUVANANTHAPURAM-695003. ADV.SRI P.K.R.MENON (SR) THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH ITA.37/2012 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 7TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944 ITA NO. 39 OF 2012 AGAINST THE ORDER IN ITA 288/COCH/2009 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/Appellant:

KERALA CRICKET ASSOCIATION KCA COMPLEX, SASTHAMKOVIL ROAD, THYCAUD,THIRUVANANTHAPURAM - 695 014REP. BY ITS HON.SECRETARY, MR.T.C.MATHEW.

BY ADVS. SRI. ADV. A SHANKAR (SR) SRI.ADV.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOS SRI.BINU MATHEW SRI.B.J.JOHN PRAKASH SRI.MATHEWS K.UTHUPPACHAN SRI.TERRY V.JAMES SRI.TOM THOMAS KAKKUZHIYIL RESPONDENT/Respondent:

THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 2, THIRUVANANTHAPURAM - 695 003. ADV.SRI P.K.R.MENON (SR.) THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH ITA.37/2012 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 7TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944 ITA NO. 40 OF 2012 AGAINST THE ORDER IN ITA No.289/Coch/2009 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT:

KERALA CRICKET ASSOCIATION, KCA COMPLEX, SASTHAMKOVIL ROAD, THYCAUAD,THIRUVANANTHAPURAM - 695 014,REP. BY ITS HON.SECRETARY, MR.T.C.MATHEW.

BY ADVS. SR. ADV. A SHANKAR(SR) SRI.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOS SRI.BINU MATHEW SRI.B.J.JOHN PRAKASH SRI.MATHEWS K.UTHUPPACHAN SRI.TERRY V.JAMES SRI.TOM THOMAS KAKKUZHIYIL RESPONDENT:

THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 2, THIRUVANANTHAPURAM - 695 003. ADV.SRI PKR MENON (SR.) THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH ITA.37/2012 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 7TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944 ITA NO. 42 OF 2012 AGAINST THE ORDER IN ITA 286/Coch/2009 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/Appellant:

KERALA CRICKET ASSOCIATION KCA COMPLEX, SASTHAMKOVIL ROAD, THYCAUD, THIRUVANANTHAPURAM-695 014, REP. BY ITS HON. SECRETARY, MR.T.C.MATHEW.

BY ADVS. ADV.SRI A.SHANKAR (SR) SRI.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOS SRI.BINU MATHEW SRI.B.J.JOHN PRAKASH SRI.MATHEWS K.UTHUPPACHAN SRI.TERRY V.JAMES RESPONDENT/Respondent:

THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 2, THIRUVANANTHAPURAM-695 003. ADV.SRI.PKR MENON (SR) THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH ITA.37/2012 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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JUDGMENT [ITA Nos.37/2012, 38/2012, 39/2012, 40/2012, 42/2012]

S.V.Bhatti, J. Kerala Cricket Association, Thiruvananthapuram/ Assessee, is the appellant. The Addl. Commissioner of Income Tax, Thiruvananthapuram/revenue, is the respondent.

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to play a test match, but the principles laid down by the Supreme Court in Asst.Commissioner of Income Tax (Exemptions) v Ahmedabad Urban Development Authority are kept in mind and also the World cup soccer gripping the enthusiasts the learned counsel, stated in their own words have preferred to play a shoot out, aiming to commence the first test again before the Assessing Officer. We are made to introduce the case with the above narrative by appreciating the alacrity with which both the learned counsel have played the shoot-out.

(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Principal Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA:

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Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution, -

(i) from the date of the creation of the trust or the establishment of the institution if the Principal Commissioner or] Commissioner is, for reasons to be recorded in writing. satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons: (ii) from the 1st day of the financial year in which the application is made, if the [Principal Commissioner or) Commissioner is not so satisfied:

Provided further that the provisions of this clause shall not apply in relation to any application made on or after the Ist day of June, 2007;

(aa) the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007in the prescribed form and manner to the Principal Commissioner or] Commissioner and such trust or institution is registered under section 12AA:

(b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable) to income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed forms duly signed and verified by such accountant and setting forth such particulars as may be prescribed.

(c) [*****]

(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the

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assessment year immediately following the financial year in which such application is made:

Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year:

Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non- registration of such trust or institution for the said assessment year:

Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA].

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Then he invites our attention to the Constitution Bench judgment in Asst.Commissioner of Income Tax (Exemptions) v Ahmedabad Urban Development Authority (supra), particularly to paragraphs 234 to 236 and 253 for the proposition that these principal issues being contested in the batch of appeals in the light of the ratio laid down in Ahmedabad Urban Development Authority case must go back to the Assessing Officer for a fresh Test Series i.e. fresh decision. 7. Paragraphs 234 to 236 and 253 are excerpted hereunder: 234. It is quite evident that the activities of the cricket associations are run on business lines The associations own physical and other infrastructure, maintain them, have arrangements for permanent manpower and have well- organised supply chains to cater to the several matches they host Many such matches are not at national level and are under- 16 or under-18 matches at the regional level However, these activities are not to be seen in isolation but are to be regarded as part of the overall scheme, and ecosystem in which the game of cricket is organized in India Talent is spotted, at local levels and dependent on the promise shown, given appropriate exposure.

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as well as other associations that are before this court- to determine their true character The ITAT appears to have been swayed by the submission that the amount given by the BCCI were towards capital subsidy.

"It is not the source from which the amount is paid to the assessee which is determinative of the question whether the subsidy payments are of revenue or capital nature The first proposition stated by Viscount Simon in Ostime case [28 TC 261: (1946) 1 All ER 668] is that if payments in the nature of subsidy from public funds are made to the assessee to assist him in carrying on his trade or business, they are trade receipts." This has later been followed in Commissioner of Income Tax v Ponni Sugars[156].

Therefore, the controversy, it is argued, needs to be relegated to the assessing officer.

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considering the entitlement in all fours. Though the revenue does not have an objection to setting aside the orders of the Tribunal, the Appellate Authority and the Assessing Officer, remit the cases to the Assessing Officer for an assessment afresh, but it is clear that the consideration of each of the returns is on its own merits and in accordance with law. According to him, registration as such is not conclusive for availing the benefits with such statutes. In other words, the attempt is that the registration shall not be treated as conclusive circumstance by the Assessing Officer upon the remand by this Court. 9. We have appreciated the consensus in the submissions made by the learned Senior Counsel appearing for the parties. A few other judgments were also cited in support of the argument made under Section 148 of the Act. We are not referring to those judgments because of the suggested course of action by the Senior Counsel for re-examining the issue afresh by the Assessing Officer. Therefore, the questions

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raised in the appeals for statistical purposes are answered in favour of the assessee. The matter is remitted to the Assessing Officer for a fresh decision on all aspects in accordance with law.

Appeals allowed. Matters remitted.

SD/- S.V.BHATTI, JUDGE

SD/-BECHU KURIAN THOMAS, JUDGE

css/

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APPENDIX OF ITA 37/2012

PETITIONER ANNEXURES Annexure A TRUE COPY BRIEF WRITE-UP OF THE ACTIVITIES PURSUED BY THE APPELLANT Annexure B TRUE COPY OF ORDER DATED 31/05/2007 OF THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM Annexure C TRUE COPY OF ANNUAL REPORT FOR PREVIOUS YEAR 2000-2001 RELEVANT TO ASSESSMENT YEAR 2001-2002 Annexure D TRUE COPY OF INCOME AND EXPENDITURE AND BALANCE SHEET FOR PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2001-2002. Annexure E TRUE COPY OF ASSESSMENT ORDER DATED 03/10/2007 FOR ASSESSMENT YEAR 2001-2002. Annexure F TRUE COPY OF APPELLATE ORDER DATED 04/02/2009 FOR ASSESSMENT YEAR 2001-2002. Annexure G TRUE COPY OF SECOND APPEAL DATED NIL APRIL, 2009 FILED BY THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A NO. 285/COCH/2009. Annexure H TRUE COPY OF IMPUGNED ORDER DATED 30/11/2011 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A.NO.287/COCH/2009.

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APPENDIX OF ITA 38/2012

PETITIONER ANNEXURES Annexure A TRUE COPY BRIEF WRITE-UP OF THE ACTIVITIES PURSUED BY THE APPELLANT Annexure B TRUE COPY OF ORDER DATED 31/05/2007 OF THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM Annexure C TRUE COPY OF ANNUAL REPORT FOR PREVIOUS YEAR 2002-2003 RELEVANT TO ASSESSMENT YEAR 2003-2004 Annexure D TRUE COPY OF INCOME AND EXPENDITURE AND BALANCE SHEET FOR PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2003-2004 Annexure E TRUE COPY OF ASSESSMENT ORDER DATED 03/10/2007 FOR ASSESSMENT YEAR 2003-2004 Annexure F TRUE COPY OF APPELLATE ORDER DATED 04/02/2009 FOR ASSESSMENT YEAR 2003-2004 Annexure G TRUE COPY OF SECOND APPEAL DATED NIL APRIL, 2009 FILED BY THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A NO. 287/COCH/2009 Annexure H TRUE COPY OF IMPUGNED ORDER DATED 30/11/2011 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A.NO.287/COCH/2009. RESPONDENT ANNEXURES Annexure R(A) TRUE COPY OF THE ORDER SHEET RECORDING REASONS FOR INITIATING REASSESSMENT.

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APPENDIX OF ITA 39/2012

PETITIONER ANNEXURES Annexure A TRUE COPY BRIEF WRITE-UP OF THE ACTIVITIES PURSUED BY THE APPELLANT Annexure B TRUE COPY OF ORDER DATED 31/05/2007 OF THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM Annexure C TRUE COPY OF ANNUAL REPORT FOR PREVIOUS YEAR 2003-2004 RELEVANT TO ASSESSMENT YEAR 2004-2005 Annexure D TRUE COPY OF INCOME AND EXPENDITURE AND BALANCE SHEET FOR PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2004-2005 Annexure E TRUE COPY OF ASSESSMENT ORDER DATED 03/10/2007 FOR ASSESSMENT YEAR 2004-2005 Annexure F TRUE COPY OF APPELLATE ORDER DATED 04/02/2009 FOR ASSESSMENT YEAR 2004-2005 Annexure G TRUE COPY OF SECOND APPEAL DATED NIL APRIL, 2009 FILED BY THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A NO. 288/COCH/2009 Annexure H TRUE COPY OF IMPUGNED ORDER DATED 30/11/2011 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A NO. 288/COCH/ 2009 RESPONDENT ANNEXURES Annexure R(A) TRUE COPY OF THE ORDER SHEET RECORDING REASONS FOR INITIATING REASSESSMENT.

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APPENDIX OF ITA 40/2012

PETITIONER ANNEXURES Annexure A TRUE COPY BRIEF WRITE UP OF THE ACTIVITIES PURSUED BY THE APPELLANT Annexure B TRUE COPY OF ORDER DATED 31/05/2007 OF THE COMMISSIONER OF INCOMETAX, THIRUVANANTHAPURAM Annexure C TRUE COPY OF ANNUAL REPORT FOR PREVIOUS YEAR 2004-2005 RELEVANT TO ASSESSMENT YEAR 2005-2006 Annexure D TRUE COPY OF INCOME AND EXPENDITURE AND BALANCE SHEET FOR PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2005-2006 Annexure E TRUE COPY OF ASSESSMENT ORDER DATED 03/10/2007 FOR ASSESSMENT YEAR 2005-2006 Annexure F TRUE COPY OF APPELLATE ORDER DATED 04/02/2009 FOR ASSESSMENT YEAR 2005-2006 Annexure G TRUE COPY OF SECOND APPEAL DATED NIL APRIL, 2009 FILED BY THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.ANO. 289/COCH/2009 Annexure H TRUE COPY OF IMPUGNED ORDER DATED 30/11/2011 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A NO. 289/ COCH/ 2009

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APPENDIX OF ITA 42/2012

PETITIONER ANNEXURES Annexure A TRUE COPY BRIEF WRITE UP OF THE ACTIVITIES PURSUED BY THE APPELLANT Annexure B TRUE COPY OF ORDER DATED 31/05/2007 OF THE COMMISSIONER OF INCOMETAX, THIRUVANANTHAPURAM Annexure C TRUE COPY OF ANNUAL REPORT FOR PREVIOUS YEAR 2001-2002 RELEVANT TO ASSESSMENT YEAR 2002-2003. Annexure D TRUE COPY OF INCOME AND EXPENDITURE AND BALANCE SHEET FOR PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2002-2003. Annexure E TRUE COPY OF ASSESSMENT ORDER DATED 03/10/2007 FOR ASSESSMENT YEAR 2002-2003. Annexure F TRUE COPY OF APPELLATE ORDER DATED 04/02/2009 FOR ASSESSMENT YEAR 2002-2003. Annexure G TRUE COPY OF SECOND APPEAL DATED NIL APRIL, 2009 FILED BY THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.ANO. 286/COCH/2009 Annexure H TRUE COPY OF IMPUGNED ORDER DATED 30/11/2011 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN I.T.A NO. 286/ COCH/ 2009