2017 (12) TMI 407

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....ing the action of the A.O. in denying the benefit of exemption u/s. 11 of the Income - tax Act, 1961 ["the Act"] to the Appellant. 1.2 The Ld. CIT (A) erred in confirming the action of the A.O. in holding that the case of the Appellant was covered by the proviso to section 2 (15) of the Act. 1.3 It is submitted that in the facts and the circumstances of the case, and in law, no denial of exemption was called for. 2 Without prejudice to the above, in the alternative, assuming - but not admitting - that some addition was called for, the computation of the same is not in accordance with the law, is arbitrary and excessive. 3. The assessee in this case is a trust. The main object of the trust is to promote the spor....

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.... assessee, it is seen that the assessee has not disputed commercial nature of such receipts viz. Coaching Camp Receipts of Rs. 22,94,004 lakhs and receipts in respect of the Garden Receipts of Rs. 2,13,220 totaling to Rs. 25,07,224. It is also not disputed by the assessee that the objects of and the activities of the assessee trust fall within the fourth limb i.e. any other object of general public utility. The assessee had relied upon the case of DIT(E) Vs. Goregaon Sports Club (IT APPEALL NO.6301 OF 2010) which is prior to the amended provisions of section 2(15) of Finance Act W.E.F. 01.04.2009. In view of the above, it is seen that the assessee trust has satisfied both the conditions as under: a) That its object and activities f....

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....s a profit of more than Rs. 6 lakhs. The similar is the position with reference to the receipts from Zen Garden. Accordingly, AO has treated this activity being an activity of rendering service in relation to trade, commerce or business for cess or fee. In view of the above, I agree with the assessing officer that the proviso to section 2(15) is triggered which renders the activities of the appellant as non-charitable under this section. ii. Appellant has relied upon several case laws. However, on perusal of these judgments it is found that the facts of the cases are distinguishable. It is noted that in the case of Goregaon Sports Club, the relevant AY was 2003-04 when proviso to section 2(15) was not on the statute. Similar are th....

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....ch registration u/s. 12 is granted and is in force, the learned counsel referred to following case laws: 1. PHD Chamber of Commerce & Industry vs. DIT(E) [2012] 357 ITR 296 (Del). 2. CIT vs. Lucknow Development Authority [2014] 98 DTR (All) 183 3. Society of Indian Automobile Manufacturers vs. ITO(E) [2016] 159 ITD 659 (Del-Trib). 4. Hoshiarpur Improvement Trust vs. ITO [2016] 45 ITR 682 (Amritsar- Trib) 7. For the applicability of proviso to section 2(15) vis-a-vis a Sports Association, the learned counsel of the assessee placed reliance upon the following case laws: 1. Tamil Nadu Cricket Association vs. DIT (E) [2014] 360 ITR 633 (Mad HC) 2. LD. CIT(A) vs. Delhi Golf Club Ltd. (ITA ....

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....activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year; (15A) "Chief Commissioner" means a person appointed to be a Chief Commissioner of Income-tax or a Principal Chief Com....

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....finding that the predominant object in doing their activities was to generate profits. (b) These activities were ancillary activities to the main activity/ object. (c) The surplus generated out of these activities is utilised towards the infrastructure development and other student / members related activities. (d) Section 2 (15) defines the term "charitable purpose". Therefore, while construing the term "business" for the said section, the object and purpose of the section has to be kept in mind. We do not think that a very broad and extended definition of the term "business" is intended for the purpose of interpreting and applying the first proviso to section 2 (15) of the Act to include any transaction for a fe....