Cricket association wins exemption case after authorities wrongly denied charitable status under section 11

The ITAT Ahmedabad set aside lower authorities' orders denying exemption u/s.11 to a cricket association registered u/s.12AA. The AO had denied exemption arguing the assessee's activities including IPL matches, ticket sales, and TV rights constituted commercial ventures rather than charitable activities. Following the SC judgment in AUDA case, the ITAT directed the AO to adjudicate afresh after proper examination of relevant material and providing adequate hearing opportunity to the assessee regarding state cricket associations' charitable status.

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Issues:
Cross appeals filed by Assessee and Revenue against separate appellate orders relating to Assessment Years 2011-12 to 2017-18; Delay in filing appeals by Assessee; Grounds of Appeal raised by Assessee and Revenue; Assessment of income of Saurashtra Cricket Association; Interpretation of charitable purpose for sports associations; Setting aside orders for fresh assessment by Assessing Officer.

The Appellate Tribunal ITAT Ahmedabad heard cross appeals filed by the Assessee and Revenue against separate appellate orders concerning Assessment Years 2011-12 to 2017-18. The appeals were filed by the Assessee and Revenue due to different dates of appellate orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The Tribunal noted a delay in filing the Assessee's appeals, but after the Assessee provided evidence that the appeals were electronically filed within the time limit, the delay was considered rectified, and the appeals were proceeded with.

The Assessee raised multiple Grounds of Appeal for the Assessment Year 2012-13, questioning the dismissal of the appeal by the CIT(A) without considering their powers, failure to address the grounds of appeal, and refusal to accept the claim despite orders from ITAT and High Court. On the other hand, the Revenue raised several issues for the Assessment Year 2011-12, including the applicability of exemptions under various sections of the Income Tax Act and the allowance of certain claims without considering the Assessing Officer's findings.

Regarding the assessment of income of Saurashtra Cricket Association (SCA), the Assessing Officer had denied exemption claimed under Section 11 of the Act, considering SCA's activities as commercial due to involvement in IPL matches and TV rights. However, the High Court of Gujarat had previously held that SCA's activities were not commercial in nature, emphasizing that any surplus generated was reinvested into cricket promotion, not for profit. The Supreme Court also directed the matter back to the Assessing Officer for further scrutiny in light of the changed definition of charitable purpose.

In light of the Supreme Court's directions, the Tribunal set aside the orders of the Lower Authorities and directed the Assessing Officer to pass fresh orders after reevaluating the matter as per the Supreme Court's judgment. Both the Assessee and Revenue appeals were allowed for statistical purposes, emphasizing the need for cooperation from the Assessee in providing necessary details for the fresh assessment.

In conclusion, the Tribunal's judgment addressed the issues of delay in filing appeals, grounds of appeal raised by both parties, the assessment of SCA's income, and the interpretation of charitable purpose for sports associations. The decision to set aside the orders for fresh assessment by the Assessing Officer was based on the Supreme Court's directives, ensuring a thorough reevaluation of the matter in line with the legal provisions.

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