M/s. Hyderabad Cricket Association, Hyderabad V. Director of Income Tax (Exemptions), Hyderabad

ITA 1228/HYD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74724 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 10-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 133A; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1228/HYD/2012 M/S. HYDERABAD CRICKET ASSOCIATION, -V- DI T (E), HYDERABAD. HYDERABAD. PAN:AAATT6229Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI V.SIVA KUMAR RESPONDENT BY SHRI P. SOMASEKHAR R EDDY DATE OF HEARING 28-01-2014. DATE OF PRONOUNCEMENT 26-03-2014 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 31/5/2012 OF DIT (E), HYDERABAD CANCELLING THE REGI STRATION U/S 12AA(3) OF THE ACT. 2. BRIEFLY STATED THE ASSESSEE A SOCIETY REGISTER ED UNDER THE A.P. SOCIETIES REGISTRATION ACT WAS GRANTED REGISTRATION U/S 12A OF THE ACT W.E.F. 20-1-1997. AS STATED BY THE ASSESSEE, FROM THE DATE OF GRANT OF REGISTRATION U/S 12A OF THE ACT, THE ASSESSEE HAD BEEN ENJOYING EXEMPTION U/S 11 OF THE ACT FOR ALL THE SUBSEQUENT ASSESSMENT YEAR. A SURV EY U/S 133A OF THE ACT WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE AT RA JIV GANDHI INTERNATIONAL 2 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. CRICKET STADIUM, UPPAL, HYDERABAD ON 21-10-2011. D URING THE SURVEY IT WAS FOUND THAT THE ASSESSEE SOCIETY IS DERIVING INCOME FROM VARIOUS LEAGUE FEES, SALE OF TICKETS OF ONE DAY INTERNATIONAL MATC HES, IPL MATCHES, ACCOMMODATION CHARGES, HALL BOOKING CHARGES, SWIMMI NG POOL AND GYM CHARGES, ADVERTISEMENT RIGHTS, FRANCHISE FEES AND S UBSIDY ETC. IT WAS FURTHER NOTICED THAT THE SOCIETY HAS RECEIVED HUGE AMOUNTS FROM CERTAIN COMPANIES AS SPONSORSHIP MONEY FOR NAMING THE CRICKET GROUND/ PORTION OF THE STADIUM IN THOSE COMPANIES NAMES. 3. THE DIT (E) ON THE BASIS OF INFORMATION FOUND DU RING THE SURVEY AND THE EXPLANATION GIVEN BY THE HONORARY SECRETARY OF THE ASSESSEE SOCIETY DURING THE SURVEY PROCEEDINGS NOTED THAT SUCH RECEI PTS ARE FROM NATURE OF ACTIVITIES COVERED UNDER THE FIRST PROVISO TO SECTI ON TO SECTION 2(15) OF THE I T ACT, HENCE THE ASSESSEE HAS LOST THE CHARACTER OF A CHARITABLE SOCIETY. ON THAT BASIS, THE DIT (E) ISSUED A SHOW CAUSE NOTICE ON 17-11-2011 POINTING OUT THEREIN THAT THE ASSESSEE SOCIETY HAS LOST THE CHARACTER OF CHARITABLE TRUST IN VIEW OF THE CLARIFICATION BY THE CBDT IN CIRCULAR NO.11 OF 2008 WITH REGARD TO ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY, HENCE, WILL NOT BE ELIGIBLE FOR EXEMPTION U/S 11 OR U/S 1 0(23C), IF THEY CARRY OUT COMMERCIAL ACTIVITIES. THE DIT THEREFORE CALLED UPO N THE ASSESSEE TO SHOW CAUSE AS TO WHY REGISTRATION GRANTED TO THE ASSESS EE SOCIETY U/S 12A OF THE ACT SHOULD NOT BE CANCELLED AS THE ASSESSEE HAS IND ULGED IN COMMERCIAL ACTIVITIES. AFTER RECEIVING SHOW CAUSE NOTICE, THE ASSESSEE SOUGHT FOR SOME TIME TO SUBMIT ITS REPLY TO VARIOUS QUERIES MADE BY THE DIT (EW). THE DIT (E) HOWEVER ISSUED A FURTHER SHOW CAUSE NOTICE DATED 23 -2-2012 AS A FINAL OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ON THE ISSUE S POINTED OUT IN JUTE SHOW CAUSE NOTICE. THOUGH ON THE DATE OF HEARING, THE ASSESSEE APPEARED AND REQUESTED FOR FURTHER TIME, THE DIT (E) HOWEVER REFUSED TO GRANT ANY FURTHER TIME. THERFEFORE, THE ASSESSEE FURNISHED A REPLY ON 9-3-2012 IN WHICH THE ASSESSEE POINTED OUT DIFFICULTIES FACED B Y IT IN GIVING AN EFFECTIVE 3 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. REPLY TO THE SHOW CAUSE NOTICE REQUESTED THE DIT ( E) TO PROVIDE AN OPPORTUNITY FOR SUBMITTING THE RELEVANT MATERIAL O N THE BASIS OF WHICH HE HAS INFERRED THAT THE ASSESSEE HAS INDULGED IN COM MERCIAL ACTIVITIES AND THEREBY INITIATED PROCEEDINGS FOR CANCELLING THE RE GISTRATION GRANTED U/S 12A OF THE ACT. IT WAS ALSO SUBMITTED BY THE ASSESSEE- SOCIETY THAT THE PRIME OBJECT OF THE SOCIETY IS TO ENCOURAGE AND DEVELOP T HE GAME OF CRICKET. IT WAS SUBMITTED THAT THE ASSESSEE HAS NEITHER CHANGED ITS OBJECTIVE NOR DEVIATED FROM ITS ACTIVITY OF PROMOTING CRICKET IN THE AREAS COVERED BY ERSTWHILE STATE OF HYDERABAD AND THE ACTIVITIES CARRIED ON BY IT DO NOT CONSTITUTE ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. IT W AS SUBMITTED THAT THE ASSESSEE SOCIETY CONSISTS OF 215 MEMBER CLUBS, SPRE AD GEOGRAPHICALLY OVER THE AREA COVERED BY THE ERSTWHILE STATE OF HYDERABA D AND EACH OF THOSE CLUBS ENCOURAGE CRICKET WITHIN THEIR DISTRICT, MUNI CIPALITY, VILLAGE ETC. IT WAS SUBMITTED THAT THE SPORT OF CRICKET IS PROMOTED BY PROVIDING GROUNDS TO CARRY ON PRACTICE MATCHES/COACHING/LEAGUES ETC. 4. FURTHER, SUPPORT IS PROVIDED TO THE MEMBER CLUB S BY PROVIDING CRICKETING EQUIPMENTS, DRESSES AND QUALIFIED UMPIRE S TO CONDUCT MATCHES AND ASSESSEE CONDUCTED LEAGUE MATCHES AMONG THE AFF ILIATED CLUBS. IT SELECTS AN OFFICIAL TEAM TO REPRESENT ASSESSEE IN V ARIOUS TOURNAMENTS CONDUCTED ACROSS THE COUNTRY BY BOARD OF CRICKET CO NTROL IN INDIA (BCCI) AND OFFICIAL HCA TEAM ALSO PARTICIPATED IN VARIOUS INVI TATION TOURNAMENTS CONDUCTED BY VARIOUS STATE CRICKET ASSOCIATIONS. I T WAS SUBMITTED THAT NONE OF THE ITEMS REFERRED TO IN THE SHOW CAUSE NOTICE C ARRY A CHARACTERISTIC OF COMMERCIAL ACTIVITY. THE CHARACTERISTIC OF AN ACTI VITY WHICH IS EMBEDDED IN PROMOTION OF SPORT AND NOT CARRIED OUT WITH AN INTE NTION TO EXPLOIT COMMERCIALLY, CANNOT DISTORT THE TRAIT OF CHARITY I N THE ENTIRE ACTIVITY. IT WAS SUBMITTED THAT TO EXAMINE WHETHER THE ACTIVITIES CA RRIED OUT COMMERCIAL NATURE OR OTHERWISE, IT IS ESSENTIAL TO UNDERSTAND THE SOURCE OF REVENUE AND THE INTENT OF GENERATING SUCH REVENUE. EXPLAINING THE NATURE OF LEAGUE FEE 4 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. WITH GROUND, IT WAS SUBMITTED THAT MANY OF THE CLUB S AFFILIATED TO HCA MAY OR MAY NOT HAVE THEIR OWN GROUNDS AND IF THEY WANT TO UTILISE THE HCAS GROUND (GYMKHANA) AND OTHER GROUNDS OBTAINED FREE O R ON PAYMENT, THEY HAVE TO PAY A NOMINAL AMOUNT APART FROM THEIR ANNUA L SUBSCRIPTION. THIS ACTIVITY FACILITATES PROMOTION OF CRICKET AND SUC H AMOUNT COLLECTED AS FEE DO NOT PARTAKE THE CHARACTER OF SERVICE FOR A FEE. IT WAS STATED THAT HCA DOES NOT CARRY ON TRADE, COMMERCE OR BUSINESS IN THIS RE GARD. REFERRING TO THE ITEM, LEAGUE FEE WITHOUT GROUND, IT WAS SUBMITTED T HAT THIS IS SIMILAR TO THE EARLIER ONE, EXCEPT THAT THE SCALE OF FEE SLIGHTLY DIFFERS IN THE CASE OF TEAMS WHO DO NOT HAVE THEIR OWN GROUND. IT WAS STATED THA T THIS FORMS PART OF THE ANNUAL SUBSCRIPTION PAYABLE BY THE MEMBER CLUBS. WITH REGARD TO SALE OF TICKETS OF ONE DAY INTERNATIONAL MATCHES AND IPL MA TCHES, IT WAS STATED THAT THESE ACTIVITIES ARE NOT REGULAR ONES AND IT IS ONL Y WHEN A ONE DAY INTERNATIONAL MATCH IS ALLOCATED TO HYDERABAD THAT THE HCA GETS REVENUE. SUCH MATCH WAS ARRANGED AT HYDERABAD BY BCCI AND T HE GROSS COLLECTIONS FELL INTO FOUR CATEGORIES NAMELY, ADVERTISEMENT RIG HTS, CATERING RIGHTS, REIMBURSEMENT OF EXPENSES AND SALE OF TICKETS. IT WAS SUBMITTED THAT AS A LEAGUE MATCH IS CHARITABLE ACTIVITY, A ONE DAY INTE RNATIONAL MATCH IS EQUALLY CHARITABLE BECAUSE THE REVENUE GENERATED IN THAT MA TCH MAKES IT POSSIBLE TO DEVELOP AND SUSTAIN CRICKET AT A VERY LOWER LEVEL. THIS ACTIVITY IS NOT CARRIED OUT WITH INTENT TO DO COMMERCE. IT WAS SUBMITTED T HAT THE FRENZY GENERATED BY A ONE DAY INTERNATIONAL MATCH AND THE ASPIRING ATTENDEES CANNOT BE CONTROLLED EXCEPT BY PLACING A MONETARY L IMIT ON THE NUMBER OF PEOPLE WHO WATCH THE EVENT AND THEREFORE THE TICKET ING AND OTHER ARRANGEMENT ARE MEANT TO MEET SUCH OBJECTIVE. 5. WITH REFERENCE TO ACCOMMODATION CHARGES, IT W AS SUBMITTED THAT STADIUM CONSTRUCTED IN HYDERABAD CONSIST OF ACCOMMO DATION FACILITIES TO BE LET OUT TO THE SPORTS PERSONNEL/SPORTS RELATED OFFI CIALS DURING THE COURSE OF PRE AND POST EVENTS COACHING CAMPS ETC. THE ACCOMM ODATION CHARGES GO 5 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. TOWARDS THE MAINTENANCE OF FACILITY CREATED FOR THA T PURPOSE AND SUCH ACTIVITIES ARE NOT CARRIED OUT WITH ANY COMMERCIAL INTENT. WITH REGARD TO HALL BOOKING CHARGES, SWIMMING POOL AND GYM CHARGES , IT WAS SUBMITTED THAT HCA PROMOTED A CLUB FOR THE BENEFIT OF ALL ITS MEMB ERS WHERE FACILITIES SUCH AS SWIMMING POOL, GYM AND OTHER SPORTS ACTIVITIES A RE PROPOSED TO BE PROVIDE. THE COMPLETE INFRASTRUCTURE ENVISAGED UNDE R THE CLUB FACILITY HAS NOT YET BEEN COMPLETED. PENDING COMPLETION OF SUCH INFRASTRUCTURE FACILITIES, HCA ALLOWED ITS MEMBERS TO UTILISE THE HALL FOR THEIR PRIVATE PURPOSES AND THE FEE COLLECTED FOR GYM AND SWIMMING POOL IS DIRECTLY RELATED TO THE PROMOTION OF SPORTS ACTIVITY AND THE SE ACTIVITIES ARE NOT CARRIED OUT WITH A VIEW TO RUN TRADE, COMMERCE OR B USINESS. WITH REGARD TO ADVERTISEMENT RIGHTS, FRANCHISEE FEE AND TV SUBSIDY , IT WAS STATED THAT THESE ACTIVITIES ARE INCIDENTAL TO CONDUCT OF THE ONE DAY INTERNATIONAL MATCH ALLOTTED TO HYDERABAD. 6. THE DIT (E) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HOWEVER WAS NOT CONVINCED WITH THE SAID EXPLANATION. THE DI T (E) WAS OF THE VIEW THAT THE SPONSORSHIP MONEY RECEIVED FROM VARIOUS CORPORATE BODIES LIKE VISAKHA INTERNATIONAL STADIUM AND M/S GMR HYDERABAD INTERNATIONAL AIRPORT ETC., CONSTITUTED COMMERCIAL ACTIVITIES. T HE DIT (E) WAS OF THE VIEW THAT THE ASSESSEE WAS ENGAGED IN THE ACTIVITIES WHI CH ARE NOT IN CONSONANCE WITH THE OBJECTS OF THE SOCIETY. REFERRING TO THE SALE OF CORPORATE BOXES, THE DIT (E) NOTED THAT THE ASSESSEE HAS BEEN PROVID ING CORPORATE BOXES OVER PERIOD YEARS FOR A CONSIDERATION AND SUCH ACTIVITY HAS BEEN CARRIED OUT WITH A COMMERCIAL MOTIVE. REFERRING TO IN-STADIA ADVERTI SING RIGHTS, THE DIT (E) NOTED THAT OVER A PERIOD OF YEARS, THE ASSESSEE WAS RECEIVING AMOUNTS BY WAY OF IN-STADIA ADVERTISEMENT RIGHTS IN THE PROCE SS OF INVITING TENDERS WHICH IS NOTHING BUT A COMMERCIAL ACTIVITY. REFER RING TO THE RECEIPTS TOWARDS TV SUBSIDY, THE DIT (E) NOTED THAT THE ASSE SSEE SOCIETY WAS RECEIVING OVER A PERIOD OF YEARS SUBSTANTIAL AMOUNT S TOWARDS TV SUBSIDY 6 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. WHICH IS PURELY TOWARDS A COMMERCIAL RIGHT. WITH R EGARD TO REVENUE EARNED FROM HOLDING IPL MATCHES, THE DIT (E) OBSERVED THAT OVER A PERIOD OF YEARS, THE ASSESSEE SOCIETY HAS BEEN RECEIVING SUBSTANTIAL AMOUNTS FROM BCCI IN CONNECTION WITH CONDUCTING IPL MATCHES. IT WAS AL SO NOTED THAT THE ASSESSEE WAS RECEIVING FRANCHISE FEE FOR MAKING THE STADIUM AVAILABLE FOR IPL MATCHES. HE HELD THAT THE SHARE OF SUCH TV ADVERT ISEMENT RIGHTS CONSTITUTES A COMMERCIAL RIGHT WHICH IS AGAINST THE SPIRIT OF CHARITABLE PURPOSE AS DEFINED U/S 2(15) OF THE ACT. HE FURTHER NOTED THAT AS PER THE AUDITORS REPORT FOR ASST. YEAR 2008-09, THE ASSESS EE HAD PURCHASED 364 TICKETS FOR WORLD CUP 2007 IT WAS SUBMITTED THAT T HE ASSESSEE COULD PRODUCE ONLY 206 UNSOLD TICKET AND IT COULD NOT PRO DUCE THE BALANCE SUCH TICKETS NUMBERING 154 BECAUSE INDIA DID NOT REACH F INAL AS A RESULT OF WHICH TICKETS COULD NOT BE SOLD. HOWEVER, THE ASSESSEE S OCIETY COULD NOT ACCOUNT THE BALANCE 154 TICKETS. 7. THE DIT (E) THEREFORE CONCLUDED THAT THE ASSESS EE SOCIETY ACTUALLY SOLD 154 TICKETS AND SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS RS.9,66,220/-. HE THEREFORE WAS OF THE VIEW THAT THE SALE OF TICKE TS IS COMMERCIAL IN NATURE VIOLATING THE OBJECTS OF THE SOCIETY. HE NOTED THA T ON SEVERAL OCCASIONS, THE ASSESSEE WAS IN RECEIPT OF HUGE AMOUNTS TOWARDS SPO NSORSHIP IN CONNECTION WITH VARIOUS MATCHES CONDUCTED BY IT AND CORRESPOND INGLY, IT ALSO CLAIMED EXPENDITURE ON PAYMENT OF COMMISSION ON SPONSORSH IP AMOUNT. HE CONCLUDED THAT THE RECEIPTS BY WAY OF SPONSORSHIP WERE IN THE NATURE OF COMMERCIAL RECEIPTS. ON THE AFORESAID BASIS, THE DIT (E) ULTIMATELY CONCLUDED THAT SINCE THE ASSESSEE IS PURSUING CO MMERCIAL ACTIVITY, IT IS NOT ENTITLED FOR REGISTRATION U/S 12A OF THE ACT AND AC CORDINGLY PASSED THE IMPUGNED ORDER CANCELLING THE REGISTRATION U/S 12AA (3) OF THE ACT. BEING AGGRIEVED OF THE SAID ORDER, THE ASSESSEE IS IN APP EAL BEFORE US. 8. THE PRELIMINARY GRIEVANCE OF THE ASSESSEE AS RAI SED IN GROUND NOS. 4 AND 5 IS WITH REGARD TO THE VIOLATION OF RULES OF N ATURAL JUSTICE. THE LEARNED 7 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. AR SUBMITTED THAT THE DIT (E) HAD CANCELLED THE REG ISTRATION BY POINTING OUT CERTAIN ISSUES WHICH WERE NEVER RAISED IN THE SHOW CAUSE NOTICE ISSUED BY HIM OR EVEN NOT PUT ACROSS TO THE ASSESSEE AT THE T IME OF PERSONAL HEARING BEFORE HIM. THE LEARNED AR SUBMITTED THAT THOUGH T HE DIT (E) IN PARAS 12, 13 AND 14 OF HIS ORDER CITED INSTANCES WHICH ACCOR DING TO HIM RELATE TO THE EXPENDITURE INCURRED BY THE ASSOCIATION ON ACTIVITI ES WHICH ARE NOT THE OBJECTS OF THE SOCIETY SUCH AS AMOUNTS SPENT ON RUN NING OF CLUB, EXPENSES INCURRED NOT SUPPORTED BY VOUCHERS AND EXPENDITURE INCURRED ON TOURNAMENT CONDUCTED FOR WOMEN CRICKET BUT THEY WER E NEVER POINTED OUT IN SHOW CAUSE NOTICE ISSUED. THEREFORE, THE ASSESS EE WAS DEPRIVED OF AN OPPORTUNITY TO EXPLAIN THESE ISSUES TO THE DIT (E). IT WAS SUBMITTED THAT THE CRICKET STADIUM WILL NOT BE COMPLETE WITHOUT ADEQU ATE INFRASTRUCTURE FACILITIES TO THE VISITING PLAYERS AND OFFICIALS FR OM VARIOUS PLACES. THE OBJECTS BEFORE THE AMENDMENT ALREADY COVERS CREATION OF SU CH CLUB AND FACILITIES AS PART OF ITS OBJECTS TO PROMOTE CRICKET BY ESTABLISH ING AND ACQUIRING OR CREATING SUCH FACILITIES AS MAY BE REQUIRED. THE S UBSEQUENT AMENDMENT WAS ONLY TO MAKE IT MORE EXPLICIT. IT WAS SUBMITTE D, HAD THE DIT (E) GIVEN A REASONABLE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN T HESE OBJECTS, THEN THE DOUBTS CREATED IN HIS MIND COULD HAVE BEEN REMOVED. SIMILARLY, WITH REGARD TO DIT (E)S CONCLUSION IN RESPECT OF EXPENSES INCU RRED WITHOUT SUPPORTING VOUCHERS, IT WAS SUBMITTED, REFERENCE TO THE AUDI TORS REPORT BY THE DIT (E) IS TOTALLY INCORRECT AS THE AUDITORS REPORT DOES N OT INDICATE ANY INCONSISTENCY IN THE NATURE OF EXPENDITURE INCURRED . THE OBSERVATION IN THE AUDITORS REPORT REFERRED TO BY THE DIT (E) IS NOT BASED ON FACTS. HAD THE DIT (E) POINTED OUT THIS ISSUE IN THE SHOW CAUSE NOTICE OR AT THE TIME OF HEARING, THE ASSESSEE COULD HAVE EXPLAINED OR PRODUCED BOOKS OF ACCOUNTS TO REMOVE THE DOUBT OF DIT (E) IN THIS REGARD. DESPITE SUCH AN OBJECT FOR THE YEAR 2006- 07 TO 2008-09 HCA SPENT AMOUNTS FOR CONDUCTING OR P ARTICIPATING WOMENS CRICKET TOURNAMENTS CONDUCTED AT VARIOUS PLACES. T HIS ISSUE WAS HIGHLIGHTED BY THE DIT (E) TO SHOW THAT THE ASSESSEE HAS UTILIS ED THE AMOUNT FOR 8 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. PURPOSES OTHER THAN THE OBJECTS OF THE ASSESSEE. I N THIS CONTEXT, IT WAS SUBMITTED THAT THOUGH AN ASSOCIATION FOR WOMEN IS I N OPERATION BUT THE SAID ASSOCIATION IS NOT APPLICABLE IN VIEW OF ADEQUATE R ESOURCES. HENCE, THE ASSESSEE SOCIETY WAS REQUIRED TO SPEND SUCH AMOUNT ON WOMEN CRICKET AT THE DIRECTION OF BCCI. IT WAS FURTHER SUBMITTED TH AT THE TOTAL AMOUNTS PAID IN THIS REGARD IS A MINISCULE PORTION OF THE GROSS RECEIPTS FOR THE PURPOSE OF ADVANCING THE GAME OF CRICKET. IT WAS THUS SUBMITT ED THAT HAD THE DIT (E) OFFERED A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE THESE ISSUES COULD HAVE BEEN PROPERLY EXPLAINED BY THE AS SESSEE TO THE DIT (E) ENABLING HIM TO TAKE A DIFFERENT VIEW IN THE MATTER . IT WAS THEREFORE CONTENDED THAT THE ORDER PASSED BY THE DIT (E) IS I N VIOLATION OF RULES OF NATURAL JUSTICE AND THE SAME IS TO BE CANCELLED. 9. THE LEARNED DR, HOWEVER, STRONGLY SUPPORTING THE ORDER OF THE DIT (E) SUBMITTED THAT SINCE THE ASSESSEE HAS INDULGED IN A CTIVITIES WHICH ARE PURELY OF COMMERCIAL NATURE AS POINTED OUT BY THE DIT (E) IN THE SHOW CAUSE NOTICES AS WELL AS IN HIS ORDER, THE CANCELLATION OF REGIST RATION U/S 12AA(3) OF THE ACT IS PERFECTLY IN ORDER. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED MATERIALS ON RECORD. FROM THE SUBMISSION OF THE LE ARNED AR, IT CAN BE SEEN THAT THE GRIEVANCE OF THE ASSESSEE IS THAT THE DIT (E) HAS CANCELLED THE REGISTRATION GRANTED U/S 12AA OF THE ACT ON VARIOUS ISSUES WHICH WERE NEITHER MENTIONED IN THE SHOW CAUSE NOTICES NOR WER E PUT ACROSS TO THE ASSESSEE AT THE TIME OF HEARING. THEREFORE, WITHOU T AFFORDING OPPORTUNITY TO THE ASSESSEE TO RESPOND TO /OR CLARIFY ON THESE ISS UES THE DIT(E) WAS NOT JUSTIFIED IN CANCELLING THE REGISTRATION. AFTER CO NSIDERING THE SUBMISSIONS OF THE LD. AR VIS-A-VIS THE MATERIALS ON RECORD WE ARE OF THE VIEW THAT BEFORE CANCELLING THE REGISTRATION GRANTED TO THE ASSESSEE , THAT TOO RETROSPECTIVELY, THE DIT (E) SHOULD HAVE GIVEN ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN/CLARIFY ON THE ISSUES ON THE BASIS OF WHICH THE DIT (E) CANCELLED THE 9 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. REGISTRATION. IT IS A FACT THAT ASSESSEE WAS EARLI ER REGISTERED U/S 12A OF THE ACT. THEREFORE, IT WAS INCUMBENT UPON THE DIT (E) TO BRING TO THE NOTICE OF THE ASSESSEE ALL THOSE FACTORS, WHICH ACCORDING TO THE DIT (E), HAS CHANGED THE NATURE AND CHARACTER OF THE ASSESSEE AND ITS OB JECTS HAVE BECOME SUCH THAT IT CAN NO MORE BE CONSIDERED TO BE EXISTING SOLELY FOR CHARITABLE PURPOSE AS DEFINED U/S 2(15) OF THE ACT. WE, THERE FORE, FEEL THAT THE ASSESSEE DESERVES A FAIR OPPORTUNITY TO EXPLAIN ITS POSITION ON ALL THE ISSUES WHICH PROVOKED THE DIT (E) TO CANCEL THE REGISTRATI ON GRANTED U/S 12A. CONSIDERED IN THE AFORESAID PERSPECTIVE, WE THINK I T PROPER TO REMIT THE MATTER BACK TO THE FILE OF THE DIT (E), WHO SHALL C OMMUNICATE TO THE ASSESSEE ALL THE ISSUES, WHICH ACCORDING TO HIM, HA S CHANGED THE OBJECT OF THE ASSESSEE THEREBY VIOLATING THE CONDITIONS OF R EGISTRATION U/S 12AA(3). HE SHALL AFFORD REASONABLE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN/CLARIFY ON THOSE ISSUES. ONLY AFTER CONSIDERING THE SUBMISSIO NS MADE BY THE ASSESSEE IN THE LIGHT OF RATIO LAID DOWN IN THE DECISIONS W HICH THE ASSESSEE MAY RELY UPON IN SUPPORT OF ITS CONTENTIONS, THE DIT (E) SHA LL DECIDE THE ISSUE IN ACCORDANCE WITH LAW. WE MAKE IT CLEAR THAT SINCE W E ARE REMITTING THE ISSUE TO DIT (E), WE HAVE NOT EXPRESSED ANY OPINION ON ME RITS. FOR THE SAME REASON THE REST OF THE GROUNDS HAVING BECOME PURELY ACADEMIC, THERE IS NO NEED FOR ADJUDICATING THEM. 11. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 26-03-2014. SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE26TH MARCH, 2014. JMR* 10 ITA NO.1228 OF 2012 M/S HYDERABAD CRICKET ASSOCIATION, HYD. COPY TO:- 1) HYDERABAD CRICKET ASSOCIATION, RAJIV GANDHI INTERNA TIONAL CRICKET STADIUM, VISAKHA CRICKET GROUND, UPPAL ROAD , HYDERABAD. 2) DIRECTOR OF INCOME-TAX (EXEMPTIONS), 3 RD FLOOR,, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D.