AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2019 (1) TMI 1066
X X X X Extracts X X X X
X X X X Extracts X X X X
....atedly. Therefore, we are of the opinion that delay has to be condoned. Accordingly, delay is condoned. 3. Grounds of appeal raised in ITA No. 279/VIZ/2018 are extracted as under:- "1. CIT(A) erred in considering the fact that the assessee carried out activity in the nature of trade, commerce or business and earned profits on sale of tickets and advertisement space (BCCIT Reimbursements of Rs. 24,64,80,295/-) which is not eligible for exemption u/s. 11 or 10(23C) of the Act. 2. CIT(A) is erred in not considering that the act of selling tickets at varied amounts/rated depending on the stands n the stadium and maintaining corporate boxes is nothing but commercial activity. 3. CIT(A) erred in coming to a conclusion that for managing the crowd tickets at varied amounts/rated depending on the stands in the stadium is required. 4. CIT(A) ought to have observed the fact that sale of in stadia advertisement slots commes under commercial activity which is nothing but to earn profit. 5. CIT(A) is not correct in considering that the receipts by way of television subsidy and IPL subvention receipts from BCCI are not bearing commercial character and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r under consideration (13-14) on 30/09/2013 by admitting NIL income. The return filed by the assessee was processed under section 143(1) and subsequently, the case was selected for scrutiny and assessment was completed under section 143(3) of the Act. The assessee has claimed its income as exemption on the ground that assessee is having registration under section 12A and approval under section 10(23C)(iv) of the Act. During the course of assessment proceedings, the Assessing Officer has asked the assessee why your case has to be considered for exemption under section 11 of the Act. It was submitted by the assessee before the Assessing Officer that the main object of the assessee is for promotion of game of cricket and the activities carried by the assessee are in accordance with the objects of the association, for which it is existed, and the assessee is already having registration under section 12A as well as approval under section 10(23C)(iv) of the Act and submitted that the activities are carried by the assessee are charitable in nature, therefore, his income is exempt under section 11 of the Act. The Assessing Officer has not accepted the explanation of the assessee and he cam....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ew of the above, the Assessing Officer was of the opinion that the assessee has involved in carrying commercial activities constituting business as contemplated in 1st proviso to section 2(15) and receipts from such commercial activity were more than the stipulated amount of Rs. 25.00 lakhs as per 2nd proviso to section 2(15). Hence, 1st proviso to section 2(15) is attracted to the assessee's case, as such the assessee is not eligible for exemption under section 10(23C)(iv) of the Act for the Assessment Year 2013-14. Insofar as claim of the assessee for exemption under section 11 is concerned, the Assessing Officer has noted that the assessee has carried the activities of game of cricket by selling tickets, paid service tax and the same is received from BCCI of Rs. 3,04,64,964/-. Since BCCI is not exempted from payment of service tax for being not charitable, assessee cannot be considered as its activities are charity in nature. Therefore, the Assessing Officer is of the opinion that though the assessee is having registration under section 12A, his income is not exempt under section 11 of the Act. 6. On being aggrieved, the assessee carried the mater in appeal before the ld. CIT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee-association. He has also not pointed out any new activity carried by the assessee after registration under section 12A and approval under section 10(23C)(iv) of the Act. Therefore, the Assessing Officer simply denied the claim of the assessee under section 11 of the Act on the ground that the assessee's activities carried are commercial in nature is without any basis and the observations made by the Assessing Officer that the activities carried by the assessee are commercial in nature, is not correct and contrary to the facts of the case. 12. Ld. counsel for the assessee has further submitted that the issue involved in this appeal is squarely covered by the decision of the coordinate bench of the Visakhapatnam tribunal in ITA Nos. 963 & 241/VIZ/2015 & ITA No. 01/VIZ/2016 for Assessment Years 2010-11 to 2012-13, by order dated 10/11/2017. He also strongly relied on the order passed by the ld. CIT(A). 13. We have heard both the sides, perused the material available on record and orders of the authorities below. 14. The assessee is a Andhra Cricket Association and has been granted registration under section 12A w.e.f. 01/04/1993 by the Revenue and approval under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not entitled for his income as exempt under section 11 as well as 10(23C) of the Act. We find that the assessee owned a cricket stadium which is constructed for the purpose of development of sport of cricket. The assessee being a Member of BCCI, hosting matches which are conducted by BCCI, expenditure for conducting the matches claimed by the assessee as reimbursement from the BCCI. The assessee is selling the tickets on behalf of the BCCI, therefore, selling of tickets by the assessee cannot be considered as commercial activity. The main intention of the assessee is to develop the game of the cricket. Sometimes, the matches sponsored by the BCCI, conducted in the assessee's stadium and for that purpose tickets are sold and expenses incurred collected as reimbursement. The selling of the tickets by the assessee is only on behalf of the BCCI. The Assessing Officer has also pointed out that in respect of selling of tickets of the cricket match, BCCI paid service tax. Therefore, BCCI is similar to the assessee therefore assessee's activity cannot be treated as charitable activity. We find that international matches hosted by the assessee in its stadium on behalf of the BCCI and for t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any 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." A bare reading of the above proviso, it is clear that if the assessee involves in carrying on any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, then proviso to section 2(15) shall attract. In the present case, the assessee is a charitable association carrying with the object of development of game of cricket an....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... In order to save the Constitutional validity of the proviso, the same would have to be read down and interpreted in the context of Section 10(23C)(iv) because, in our view, the context requires such an interpretation. The correct interpretation of the proviso to Section 2(15) of the said Act would be that it carves out an exception from the charitable purpose of advancement of any other object of general public utility and that exception is limited to activities in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration. In both the activities, in the nature of trade, commerce or business or the activity of rendering any service in relation to any trade, commerce or business, the dominant and the prime objective has to be seen. If the dominant and prime objective of the institution, which claims to have been established for charitable purposes, is profit making, whether its activities are directly in the nature of trade, commerce or business or indirectly in the rendering of any service in relation to any trade, commerce or business, then it would not be entitled....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2018 (A.Y. 2015-16) 17. The grounds raised by the department are similar to the grounds raised in ITA No. 279/VIZ/2018. Therefore, our decision in ITA No. 279/VIZ/2018 shall apply mutatis mutandis to this appeal also. Thus, this appeal filed by the Revenue is dismissed. ITA No. 280/VIZ/2018 (A.Y. 2014-15) 18. The additional ground raised in this appeal is extracted as under:- "12. CIT(A) erred in coming to a conclusion that the accumulated fund of Rs. 4,52,37,665/- was utilized within the specific period basing on the statement of expenditure submitted by the society during appellate proceedings, without calling for remand report from the AO on the additional evidence produced by the assessee society by way of statement of expenditure." 19. The Assessing Officer has noted that during the Financial Year 2008-09, an amount of Rs. 4,52,37,665/- was accumulated under section 11(2) of the Act for specific purpose and this amount should have been spent before 31/03/2014 for the purpose for which it was accumulated. But as pr ROI and as discussed in the above table, the assessee has spent an amount of Rs. 1,88,46,317/- and the balance amount of Rs. 2,63,91,348/- was n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,67,677 2010-11 2011- 12 24,68,68,870 20,98,38,539 14,26,49,701 3,11,162 14,23,38,539 6,71,88,838 6,75,00,000 17,40,56,515 2011-12 2012- 13 37,12,64,123 31,55,74,505 18,10,26,197 5,40,56,515 Financial Year 2007-08 accumulated income completely utilised 2011-12 1,54,41,060 11,15,28,622 13,45,48,308 22,47,90,642 32,93,49,582 2012-13 2013- 14 29,43,29,724 25,01,80,266 30,24,74,315 3,70,58,940 Financial Year 2008-09 accumulated income completely utilised 2012-13 2013- 14 2,33,33,382 24,20,81,993 26,89,57,260 2013-14 2014- 15 46,75,32,396 39,74,02,537 41,62,48,853 1,93,30,813 39,69,18,040 24,96,26,447 2014-15 2015- 16 33,56,05,927 28,52,65,038 42,31,02,466 2,48,35,805 Financial Year 2010-11 accumulated inco....