TaxTMI 
TaxTMI 
2013 (11) TMI 470
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.... issue to ld. CIT for fresh adjudication. In the second round this impugned order was passed on 26.03.2009 and again the registration has been refused. There is no dispute regarding the above facts. 3. In view of Tribunal's restoration of the matter, ld. CIT has again examined the objects of this society. He has examined the objects and activities of this society under 5 heads, namely- (i) Running of the activities of the society on commercial lines. (ii) Non-charitable nature of some of the objects of the society; (iii) No expenditure on charitable activities for public at large; (iv) Huge payments of Rs.9 lacs made to Shri Ajay Gupta, a member of the governing body, and (v) Misplaced reliance on Board's circular No.395. 4. It seems that ld. CIT has examined the stands taken by the society by dividing them under five items. Finally, he has declined to grant registration and has rejected society's application filed u/s 12AA of the Act. The appellant-society is aggrieved and has come in the second round before ITAT. Following grounds have been raised in this appeal: "1.On the facts and on the circu....
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....that ld. CIT has wrongly inferred that with the enabling clause of Memo of Association to invest the surplus funds of the society in a profitable manner to amount to ensuing commercial objects or activities by the society. According to him, ld. Commissioner has wrongly interpreted provisions of section 11(1) (a) (b) of the Act. The consultancy paid to Shri Ajay Gupta is not in violation of provisions of section 13(2) (c) and section 13(3) of the Act. 6. Per contra, ld. CIT-DR has heavily relied on the findings of ld. Commissioner and has further submitted that the object of the society and its activities clearly bring out a fact that it is engaged in the money making activities which ultimately benefit the professional golfers in the form of prize money from various professional golf tournaments conducted by it and sponsored by the big corporate houses. He has further argued that the society could not provide details of any expenditure out of total receipts of amount of rs.45 lacs which it has incurred for just the promotion of golf as a sport in public at large in which any financially disadvantaged person from poor strata of society or middle income group or any person from publ....
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....n countries in the interests of golf in general and professional golf in particular. (ix) To promote the art of making Golf Clubs and golf equipment of all kinds and to encourage manufacture of such things in India. (x) To liaise with manufacturers of Golf Clubs and equipment in India and elsewhere to improve their design and quality and to associate with them in research and development relating to such products. (xi) To frame Codes of Conduct and Ethics for professional golfers and to enforce them. (xii) To promote, encourage and assist in organizing the merchandising and sale of Golf Clubs and golf equipment through its members or otherwise. (xiii) To sponsor or arrange sponsorship of promising young players with regard to their participation in golf tournaments in India or elsewhere/ (xiv) To establish and run, or assist in the running of, schools, colleges and like institutions for the training of professional golfers. (xv) To publish, or arrange to be published, magazines, periodicals, containing articles and information of interest to Golfers, and also to publish books, booklets....
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....sions, licenses and the like conferring any exclusive or non-exclusive or limited right to use any secret processes, trade marks, copy rights or any concession of any nature from any government or grant licenses in respect of or otherwise convert into cash the., property, rights or information so acquired. (xxiv) To establish or promote any other Association or Associations for the purpose of acquiring the business and undertaking of all or any of the properties rights and liabilities of the Association or for any other purpose which may seem directly or indirectly calculated to benefit the Association and to acquire and hold any shares or securities of any such Association. (xxv) To obtain or in any way assist in obtaining any ordinance or enactment of any legislative authority for enabling the or any other Association to carry any of its objects -into effect or for effecting any modification of the Association's or any other Association's constitution or for any other purpose and to oppose any legislation proposals proceedings schemes or applications whether indicated in this paragraph or not which may seem calculated directly or indirectly to prejudic....
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..... The assessee is a society registered under the Societies Registration Act and it is formed to promote interest in the game of golf in general and professional golf in particular. The averment made by ld. Commissioner that membership of society is restricted to Professional Golfers resident in India and also overseas is misconceived. We do not find any such restrictive clause in the objects of the assessee society. Golf is a game in which not many people are interested. It is clear from the aims and objects of the society that any person who is in any way attached to or interested in the game of golf can join as its member and can contribute towards the promotion of game. We do not find anything on record which suggest that the society is being run on commercial lines. It is not taking any financial aid or grant from any government agency. Therefore, it becomes imperative for it to follow certain rules or commercial expediency in order to keep-going. It is nowhere mentioned that a charitable society has to be poor, illmanaged, financially drenched and always anchoring for financial help. If any society acts in a prudent manner to become self-sustained, it would not amount to becom....
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....iled form No.10 during the course of assessment/appraisal of the application which is sufficient compliance of this provision. When form No.10 is filed after time limit prescribed by section 139(1) of the Act, but before completion of the assessment, the assessee will be entitled for exemption. Similar inference can be drawn from the judgment of Hon'ble Apex Court rendered in the case of CIT V Nagpur Hotels Owners Association reported in 247 ITR 201 (S.C). 10. The alleged payment made to Shri Ajay Gupta, member of the Governing Body as per ld. Commissioner but after perusal of copy of Memo enclosed at pages 40 to 70 of assessee's Paper Book wherein at page 68 a list of Founder Members is enclosed. Perusal of this list shows that the name of Shri Ajay Gupta does not appear there. This payment is also not hit by section 13(2) (c) or section 13(3) of the Act because Shri Ajay Gupta himself is an acclaimed golfer. He was hired because of his knowledge and understanding in the game and he was willing and having capability and ability to promote the game of golf. We have found that the society has not been formed to protect the interests of Professional Golfers rather it is meant for th....
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....(3) of section 12AA are satisfied. The only reason for cancellation of registration in the instant case is that in view of the amended provisions of section 2(15) read with the first proviso, with effect from 1-4-2009 the assessee cannot be held to be carrying out activities of charitable purposes. The insertion of the first proviso would not have any bearing on section 12AA(3), since it does not extend to the objects of the trust or institution but only to its activities as stated therein. [Para 8] From a reading of the amended provisions of section 2(15) read with the first proviso, it is clear that there are six categories of activities which are within the definition of charitable purposes: (i) Relief to the poor, (ii) Education, (iii) Medical relief, (iv) Preservation of environment (including watersheds, forests and wildlife), (v) Preservation of monuments of places or objects of artistic or historical importance, and (vi) Advancement of any other object of general public utility. The first proviso to section 2(15) puts a rider only on the sixth category, i.e., for advancement of any other object of general public utility. It will not be held to be charitable pu....