Hyderabad Cricket Association is not engaged in activities in nature of trade and commerce or business and therefore, eligible to enjoy the benefit of section 11 of the Income Tax Act, 1961, the Income Tax Appellate Tribunal, Hyderabad bench said last week while disposing appeals filed by both HCA and the department.
In the instant case, registration under section 12AA of the Income Tax Act, 1961 was granted to assessee. In consequent to a survey was conducted in the premises of the assessee, The department noted that the cricket association was deriving income from various sources like receipts from league fees, sale of tickets of various matches, advertisement charges, sponsorship fees from various companies etc. which are not charitable nature. The department took a view that it is carrying activities on a commercial basis and therefore, withdrawn the registration granted earlier. Assessee contested the same before the appellate authorities.
In view of the above, the AO refused to grant exemption under section 11 of the Act and said that the assessee has failed to submit the books of accounts before the AO.
On appeal, the first appellate authority granted partial relief to the assessee.
ITAT observed that when the Revenue found that the assesse is carrying commercial activities and not eligible for the exemptions, at the same time the assessee filed an appeal to cancel their registration and the expenditure not supported with any relevant documents which can only lead to disallowance and not for withdrawal of registration. Hence the appeal filed by the revenue has dismissed.
While granting the benefit of section 11 of the Income Tax Act to the assessee, the bench observed that the activities and sources of income of assessee are similar to the facts of the Tamil Nadu Cricket Association. Following the decision of Hon’ble Madras High Court in the case of Tamil Nadu Cricket Association, the bench said that assessee was found to be not engaged in activities in nature of trade and commerce or business.
Read the full text of the Order below.
