TaxTMI 
TaxTMI 
2026 (5) TMI 601
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....isposed of by this common order for the sake of convenience and brevity. 2. The Assessee had filed original its return of income for AY 2017-18 on 05.11.2017 declaring Nil income and claiming TDS of Rs 1,85,229/- which was subsequently revised on 22.09.2018 declaring the NIL Income and claiming TDS of Rs 41,95,229/-. The case was selected for Complete Scrutiny through CASS. Therefore, notice u/s 143(2) was issued on 16.08.2018 which was duly served on the assessee. Thereafter, notice u/s 142(1) was issued to the assessee through ITBA system to furnish the requisite details. Assessee furnished the details through ITBA. 2.1 The assessee society is registered u/s 12A of the Income Tax Act 1961 vide order dated 27-04-2004 passed by the Director of Income Tax (Exemptions). Delhi in No DIT(E)/2004-05/W-171/03/120. The assessee is also registered u/s 80G(5)(vi) of the Income Tax Act vide order dated 17-09-2008 passed by the Director of Income Tax (Exemptions), Delhi in No DIT(E)/2008-09/W-171/1670 and the assessee has claimed exemptions u/s 11 of the Income Tax Act. 3. On perusal of the income and expenditure account it was observed by the AO that the assessee had received 'Royal....
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....relations with any outside party, then any surplus returned to the persons forming such associations is not chargeable to tax." 4.1 However, the AO did not accept the above submissions of the assessee and inter-alia observed that such receipts being 'Royalty income' of Rs. 4,03,50,000/- and 'Sponsorship Fee' of Rs. 92,61,459/- exceeded 20% of the total receipts of the assessee and therefore it was hit by the proviso to section 2(15) of the Act. The relevant extracts of the order of the AO are reproduced as under: "Further receipts from such activities exceed 20% of the total receipt during the year under consideration. By the Finance Act 2015 wet. 01.04 2016 (i.e. AY 2016-17), a significant change is made in the scope of proviso to section 2(15) of the Act. The said proviso now reads as under: "Provided that the advancement of any other object of general public utility shall not be a chantable 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....
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....training programmes of the young individuals who are still to gain prominence and there is no systematic instruction and training system in place to train the young wrestlers at Akhara Level/Village Level and instead it is charging royalty fees from the organization seeking recognition /affiliation for Organizing Competition at District Level/State Level. Further receipts from such activities exceed 20% of the total receipt during the year under consideration. By the Finance Act 2015 w.e.f. 01.04.2016 (i.e. 'A.Y. 2016-17), a significant change is made in the scope of proviso to section 2(15) of the Act. The said proviso now reads as under:-. "Provided that the advancement of any other object of general public utility shall not be a charitable 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 ....
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....d sponsorship fees which are received are incidental for the fulfilment of the objectives of the assessee. The receipts are not being used as business receipts in order to be utilised as profit to any person but instead is used to promote the sport of wrestling. Though the assessee has objectives of general public utility, considering the activities and the objects of the federation as also going by the case laws quoted above, the proviso to Section 2(15) shall not apply to the assessee. Issues involved in this case are also same in the facts and circumstances of above decision by the ITAT. Hence, it is held that the assessee is entitled for the benefit of provisions laid down u/s 11 & 12 of the Act. As a result, the appeal is allowed." (emphasis supplied by us) 6. Aggrieved with the said order, the Revenue is in appeal before the Tribunal. 7. At the outset, the Ld. AR submitted that it was a covered matter in favour of the assessee by the order of the Tribunal in assessee's own case for A.Y. 2010-11 & 2012-13 in ITA No. 4755/Del/2016 & 2063/Del/2017. Further, the AR submitted that the AO passed assessment orders dated 30.03.2021 and 26.03.2025 for A.Ys. 2018-19 and 2023-2....