2022 (9) TMI 1308

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....in 10 districts of the State of Telangana. It was granted registration u/s 12AA vide order of the DIT(E) in F.No.1/28/12A/12-13/DIT(E),dated16.01.2003 w.e.f. 01.04.2002. The assessee e-filed its return of income for the Asst. Year 2015- 16 on 30.09.2015 declaring 'Nil' income. The return was processed u/s 143(1) of the I.T. Act determining tax payable at Rs. Nil. Subsequently, the case was selected for scrutiny as per 'Manual' scrutiny guidelines and Notice u/s 143 (2) was issued on 26.09.2016. 3. The Assessing Officer during the course of assessment proceedings noted that a survey u/s 133A of the I. T. Act was carried out on 21.10.2011 during which some incriminating documents were found and were impounded. He noted that the assessee received substantial amounts from big corporate houses, namely, M/s GMR and Visaka Industries as sponsorship money on the condition of naming the cricket ground/portion of the stadium in their names. As per agreement dated 16.10.2004 between the assessee and Visaka Industries Ltd, the Company agreed to pay Rs. 6.5 crores to the assessee for naming the stadium as "Visaka International Cricket Stadium" and granting advertisement, publicity and di....

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....rusal of the income and expenditure account of the assessee noted that the assessee is receiving huge amounts of grant/reimbursement from BCCI as share of advertisement income for the IPL, domestic, international, etc., cricket matches. This according to him is nothing but some sort of sharing of the advertisement income on account of holding of international test matches and ODI matches from which the BCCI has gathered huge advertisement income. Thus, according to him the nature of receipt, even though called subsidy by the assessee was necessarily in the nature of income received by the activity of the assessee. 6. The Assessing Officer further noted that the assessee has shown the following income in the income and expenditure a/c: Particulars Amount (Rs.) Subsidy from BCCI 26,00,00,000 Celebrity Cricket League 20,00,000 Champion League T20 2,98,38,052 I.P.L. 1,32,49,000 Domestic Matches 2,01,50,701 India vs. Sri Lanka - ODI Match 2,01,50,701 Membership Subscription 1,87,621 Interest and other income 34,24,725 7. The Assessing Officer noted that the assessee is a fullfledged member of the BCCI as per Memorandum and Rule....

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....ate applicable to AOP as income of the assessee earned from business during the previous year. 10. Before the learned CIT (A), the assessee made elaborate arguments based on which the learned CIT (A) allowed the claim of exemption u/s 11 by observing as under: "5. The Hon'ble ITAT in appellants own case has decided the issue of grant of registration u/s 12AA, by setting aside the order of DIT (E) withdrawing the exemption and the CIT (E) has passed the consequential order dated 14.12.2016 granting exemption w.e.f. 16.01.2003.Therefore, the Assessing Officer is directed to grant exemption u/s 11 of the I.T. Act, 1961. The second issue of addition u/s 40A(3) does not arise once the income has to be computed u/s 11 to 13 of the I.T. Act, 1961. Therefore, Assessing Officer is further directed to delete the addition of Rs.1,28,55,646/- made u/s 40A(3) of the I.T Act, 1961". 11. Aggrieved with such order of the learned CIT (A), the revenue is in appeal before the Tribunal by raising the following grounds of appeal: "1. The Ld. CIT(A) erred in allowing the appeal of the assessee. 2. The Ld.CIT(A) erred in directing the Assessing Officer to allow exempt....

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....o the decision of the Chandigarh Bench of the Tribunal in the case of Punjab Cricket Association vs. ACIT vide ITA No.4287/CH/2017 order dated 12.9.2019, the learned DR submitted that under identical circumstances, the Tribunal held that the assessee is not entitled to exemption u/s 11 of the I.T. Act. 14. The learned Counsel for the assessee, on the other hand, submitted that the Tribunal in assessee's own case has already allowed exemption u/s 11 of the I.T. Act. The Assessing Officer for the A.Y 2010-11 has allowed the claim of exemption u/s 11 of the I.T. Act in the consequential order passed after of the order of the CIT (A). So far as the A.Ys 2012-13 to 2014-15 are concerned, these are pending with the Assessing Officer after the matter was set aside to the file of the Assessing Officer. Relying on various decisions, he submitted that under identical circumstances, the Coordinate Benches of the Tribunal have allowed the claim of exemption u/s 11 of the I.T. Act to the respective cricket association. He accordingly submitted that since the aims and objectives of the association are for the promotion of organizing, management and conducting of the game of cricket and the as....

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.... "34-35. Thus, when the assessee is in receipt of income from activities, which fits in with Sections 11 and 12 of the Act as well as from sources which do not fall strictly with the objects of the trust, would not go for cancellation of registration under Section 12AA of the Act on the sole ground that the assessee is in receipt of income which does not qualify for exemption straight away by itself. All that ultimately would arise in such cases is the question of considering whether Section 11 of the Act would at all apply to exempt these income from liability. These are matters of assessment and has nothing to do with the genuineness of the activity or the activities not in conformity with the objects of the trust. As rightly pointed out by learned Senior counsel appearing for the assessee, as is evident from the reading of Circular No.11 of 2008 dated 19.12.2008, the object of the insertion of first proviso to Section 2(15) of the Act was only to curtail institution, which under the garb of 'general public utility', carry on business or commercial activity only to escape the liability under the Act thereby gain unmerited exemption under Section 11 of the Act. ....