ITO (EXEMPTIONS) WARD 2, CHENNAI vs. ALL INDIA CHESS FEDERATION, CHENNAI

Shri S.Nataraj, JCIT represented on behalf of the Revenue and Shri A. Satyaseelan, Adv., represented on behalf of the assessee. to 1785/Chny/2017 :- 2 -:

It was a submission that in the course of the assessment, the AO had invoked the proviso to Sec.2(15) of the Act and had held that the provisions of Sec.11 & 12 are inoperative and had brought to tax the entire earnings as the income of the society. It was a submission that on appeal, the Ld.CIT(A) had followed the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case for the AY 2009-10 had allowed the assessee’s appeal. It was a submission that the order of the Ld.CIT(A) was liable to be reversed.

In reply, the Ld.AR vehemently supported the order of the Ld.CIT(A). It was a submission that the issues were squarely covered by the decision of Co-ordinate Bench of this Tribunal in the assessee’s own case in dated 09.05.2014 for the AY 2009-10.

We have considered the rival submissions.

The issue primarily relates to the applicability of the proviso to Sec.2(15) of the Act. A perusal of the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case for the AY 2009-10, referred to supra, shows that the Hon’ble Co-ordinate Bench of this Tribunal has held as follows:

Thus, it can be concluded that the sports promotion is “human resources development’ and considering the policy declaration of Government of India, sports is construed at par with “education”. The Government of India does consider promoting and regulation of sports as constitutional obligation and discharges the same through recognized sports federations in India like that of the assessee. The Government also formulates sports management and provides training and technical assistance for development of sports in India. The National Sports Federations like that of the assessee honoring the national development board is the extended arm of Government providing training, coaching, to 1785/Chny/2017 :- 3 -: development of skill among the sportspersons in India. In furtherance to the above discussions one can appreciate that in the present scenario, sports has also emerged as a profession the income derived from which is taxable, and such profession is associated with systematic and continues education in the sport one profess coupled with trained physical and mental fitness and therefore providing knowledge in any sport have to be treated at par with education.

Considering the ratio of the aforesaid decisions and discussions, and also the scope of sports development in India, we are of the view that the recognized sports association in India, who impart knowledge in sports, promotion of sports by conducting various sports activities in all branches, to fall within the scope of “education as defined under the amended provisions of Section-2(15) of the Act”. Accordingly we hold that the objects of the assessee society will fall within the scope of the first limb of the amended provisions of section 2(15) of the Act viz., “education”. Further on analyzing the activities of the assessee society with regard to FIDE trainer coach fee – Rs.5,70,000/-, AICF chronicle – Rs.2,53,300, Prize money share – Rs.5,51,500/-, Rent on Monrai system –Rs.1,43,750/, Title fees – Rs.3,00,500/-,Telecast charges–Doordarshan– Rs.12,00,000, and FIDE remittances – Rs.15,35,052/-, we find that all of them relate to the activities which are incidental to the main objects of the assessee’s society and therefore, proviso to section 2(15) of the Act will not be attracted. Based on our aforesaid decision the learned Assessing Officer is hereby directed to modify his order accordingly. 11. In the result, the appeal of assessee is allowed.

As it is noticed that the issues are squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case for the AY 2009-10 and as it is noticed that the Ld.CIT(A) has followed the judicial discipline in following the decision of the Co-ordinate Bench of this Tribunal in the assessee’s own case for the AY 2009-10, we find no error to interfere with the order of the Ld.CIT(A) on this issue. As the issue has been decided in favour of the assessee, none of the other grounds survive.

In the result, the appeals filed by the Revenue are dismissed.