Vishakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) has declared that the activities of Andhra Cricket Association are eligible for tax exemption under section 11 of the Income Tax Act, 1961.
In the instant case the assessee is a cricket association and registered under Section 12A of the Income Tax Act, 1961 and also obtained grant of approval u/s 10(23C)(iv) of the Act.
But the AO has noted that the assessee has received grants from the Board of Control for Cricket in India (BCCI) partly, and also various tournaments were conducted by the assessee and conducted stadium in Vishakhapatnam for conducting test matches. Assessee also constructed stadiums in some other places also further more assessee acquired land for the same purpose. The assessee has received a huge amount and out of these receipts also incurred some expenses for conducting league tournaments and development of game and other heads etc.
The assessee has shown the values of fixed assets and the infrastructure subsidy from the BCCI. Further he noted that some amendments were made in the articles and memorandum of association of the assessee, but during the verification time the assessee has failed to submit the evidences with regard to approvals obtained from the jurisdictional Commissioner of Income Tax for the said amendments hence the asssessee-association would not be entitled for the exemption u/s 11 of the Act.
The bench comprising of V. Durga Rao and D.S. Sunder Singh has observed that in fact the assessee-society being a member of the BCCI and BCCI collected huge funds from advertisement and other sources. The assessee-society allowed selling tickets for the cricket viewers but it is clear that the money were collected by the BCCI. The role of the assessee-society is only to provide stadium for conducting matches. Other than that, the assessee – society has no role in conducting the international matches and Indian Premier League matches. The bench further noticed that there is no statutory requirement of intimating any changes in the amendments to the bye-laws to the Income Tax’ Department and the appellant has already intimated the amendments before the CIT. Hence there is no violation of laws from the appellant’s side. And the AO has failed to remind that “the learned CCIT granted registration u/s 10(23C) (IV) after examining these amendments, so the department is aware of the amendments”.
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