MAHARASHTRA CRICKET ASSOCIATION, Pune V. CIT-I, Pune

ITA 1856/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84940 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS M S VERMA
• Assessee Lawyers: NANI WADEKAR
• Keywords: Charitable institution; Opportunity of being heard; Source of fund; Assessment record; Cancellation of registration
• Section: 143(3); 12A; 12AA; 263; 63; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS.1855 & 1856/PN/2012 MAHARASHTRA CRICKET ASSOCIATION 5 TH FLOOR, AMAR AVINASH CORPORATE CITY, 10, BUND GARDEN ROAD, PUNE 411 001. PAN : AAATM2192D . APPELLANT VS. COMMISSIONER OF INCOME TAX - I, PUNE. . RESPONDENT ASSESSEE BY : MR. NANIWADEKAR DEPARTMENT BY : MRS. M.S. VERMA DATE OF HEARING : 11-08-2014 DATE OF PRONOUNCEMENT : 28-08-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED TWO APPEALS ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF EVEN DATE PASSED BY COMMISSIONER OF INCOME TAX-I, P UNE (IN SHORT THE COMMISSIONER) UNDER SECTIONS 12AA(3) AND SECTION 2 63 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) RELATING TO THE SAME ASSESSEE, THEREFORE THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLID ATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. ITA NO.1856/PN/2012 IS AN APPEAL DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER DATED 30.07.2012 PASSED U/S 12AA(3) OF THE ACT CANCELLING FROM ASSESSMENT YEAR 2009-10 ONWARDS THE REGISTRATI ON ALLOWED TO THE ASSESSEE U/S 12A(A) OF THE ACT. IN THIS APPEAL, APP ELLANT HAS ASSAILED THE ACTION OF THE COMMISSIONER IN CANCELLING THE REGIST RATION GRANTED U/S 12A OF THE ACT. THE PRIMARY GRIEVANCE OF THE ASSESSEE IS THAT THE COMMISSIONER ERRED IN EXERCISING HIS JURISDICTION U/S 12AA(3) OF THE ACT IN THE ABSENCE OF ANY FACTUAL OR LEGAL JUSTIFICATION. ITA NOS.1855 & 1856/PN/2012 3. IN BRIEF, THE RELEVANT FACTS CAN BE SUMMARIZED A S FOLLOWS. THE ASSESSEE IS CONSTITUTED BY A MEMORANDUM OF ASSOCIAT ION AND REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 ON 30 TH MARCH, 1968. THE ASSESSEE ALSO OBTAINED REGISTRATION UNDER THE BOMBA Y PUBLIC TRUST ACT, 1950 IN 1977. ASSESSEE WAS REGISTERED WITH THE COMMISSI ONER OF INCOME TAX, PUNE U/S 12A(A) OF THE ACT AS A CHARITABLE INSTITU TION VIDE ORDER DATED 09.12.1991. THE MAIN OBJECTS OF THE APPELLANT ASSO CIATION, AS REVEALED BY THE MEMORANDUM OF ASSOCIATION PLACED AT PAGES 5 TO 12 O F THE PAPER BOOK, INTER- ALIA, INCLUDE PROMOTION, DEVELOPMENT AND CONTROL OF THE GAME OF CRICKET AND GENERALLY IMPROVE THE STANDARDS OF THE GAME IN THE SPECIFIED AREAS OF THE STATE OF MAHARASHTRA. THE OBJECTS OF THE APPELLANT ARE CONTAINED IN CLAUSE 4 OF THE MEMORANDUM OF ASSOCIATION, AND THE SAME READ AS UNDER :- 4. OBJECTS : THE OBJECTS OF THE ASSOCIATION SHALL BE AS UNDER :- (A) TO ENCOURAGE PHYSICAL EDUCATION, FOSTER AND MAI NTAIN FRIENDLY AND CORDIAL RELATIONSHIP THROUGH SPORT TOURNAMENTS AND COMPETITIONS IN CONNECTION THEREWITH AND TO CREATE A HEALTHY SPIRIT IN THE COUNTRY THROUGH THE MEDIUM OF SPORTS IN GENERAL AND CRICKET IN PARTICULAR. (B) TO INSTIL THE SPIRIT OF SPORTSMANSHIP IN DESERV ING STUDENTS ATTENDING SCHOOLS AND COLLEGES AND MEMBERS OF OTHER INSTITUTI ONS AND TO DEVELOP A GOOD STANDARD OF PHYSIQUE OF THE STUDENTS AND TO FOSTER THE SPIRIT OF SPORTSMANSHIP AND INSTIL THE IDEAL OF CRICKET AMONGST STUDENTS OF SCHOOLS AND COLLEGES AND MEMBERS OF AFF ILIATED CLUBS AND INSTITUTIONS AND TO EDUCATE THEM IN THE GAME. (C) WITH A VIEW TO ACCOMPLISH THE OBJECTS AFORESAID , TO HELP ENCOURAGE PROMOTE, DEVELOP AND CONTROL THE GAME OF CRICKET AN D GENERALLY TO IMPROVE THE STANDARD OF THE GAME. (D) TO SELECT TEAMS TO REPRESENT THE ASSOCIATION IN ANY TOURNAMENT, CHAMPIONSHIP OR FIXTURE, LOCAL OR OTHERWISE. (E) TO ARRANGE, SUPERVISE AND REGULATE VISITS OF TE AMS. (F) WITH A VIEW TO ACCOMPLISH THE OBJECTS :- (I) TO ARRANGE AND MANAGE AMONG OTHER THINGS LEAGUE AND / OR ANY OTHER TOURNAMENT. (II) TO IMPROVE, CONTROL, REGULATE AND MANAGE ALL T OURNAMENTS AND MARCHES. (III) TO START AND MAINTAIN A JOURNAL DEVOTED TO SP ORT IN GENERAL AND CRICKET IN PARTICULAR. (IV) TO MAINTAIN A LIBRARY OF BOOKS, PERIODICALS AN D OTHER LITERATURE ON SPORT IN GENERAL AND CRICKET IN PARTI CULAR. ITA NOS.1855 & 1856/PN/2012 (V) TO ENGAGE COACHES TO COACH DESERVING PERSONS IN THE VARIOUS DEPARTMENTS OF THE GAME. (VI) TO ENGAGE PERSON OR PERSONS AS PROFESSIONAL CR ICKETER OR CRICKETERS AND TO PAY REMUNERATION OR HONORARIUM TO THEM. (VII) TO START OR SPONSOR AND/OR TO SUBSCRIBE TO FU NDS FOR THE BENEFIT OF CRICKETERS OR THEIR FAMILIES. IN SUM AND SUBSTANCE, THE ACTIVITIES OF THE ASSESS EE REVOLVE AROUND PROMOTION AND DEVELOPMENT OF THE GAME OF CRICKET IN THE SPECIFIED AREAS OF MAHARASHTRA. 4. ON 07.08.2009, THE COMMISSIONER ISSUED A NOTICE, COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGE 1, REQUIRING THE ASSESSEE TO SHOW- CAUSE AS TO WHY THE REGISTRATION GRANTED TO IT U/S 12A(A) OF THE ACT ON 09.12.1991 BE NOT WITHDRAWN. AS PER THE COMMISSION ER, ASSESSEE WAS PROMOTING SPORTS ACTIVITY ON A COMMERCIAL BASIS BY HOLDING VARIOUS TOURNAMENTS OF BCCI, VIZ., RANJI TROPHY MATCHES, WO RLD CUP TRIAL MATCHES, TWENTY-TWENTY TOURNAMENTS, ETC. FOR WHICH BCCI WAS MAKING PAYMENTS TO ASSESSEE, AND THEREFORE, ASSESSEE WAS HIT BY THE AM ENDMENT TO SECTION 2(15) OF THE ACT BY THE FINANCE ACT, 2008 W.E.F. ASSESSME NT YEAR 2009-10, WHEREBY A PROVISO WAS INSERTED, WHICH IMPLIED THAT A CHARI TABLE PURPOSE IN THE NATURE OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NO LONGER BE CONSIDERED AS A CHARITABLE PURPOSE IF IT INVOLVES CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY AC TIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION IRRESPECTIVE OF THE NATURE OF U SE OR APPLICATION OR RETENTION OF INCOME FROM SUCH ACTIVITY. ACCORDING TO THE COM MISSIONER, THE ACTIVITIES OF THE ASSESSEE FELL FOR CONSIDERATION IN THE AFORESAI D PRESCRIPTION CONTAINED IN THE PROVISO TO SECTION 2(15) OF THE ACT, AS AMENDED BY THE FINANCE ACT, 2008. SUBSEQUENTLY, THE IMPUGNED ORDER REVEALS THE COMMIS SIONER ISSUED FURTHER NOTICES IN CONTINUATION ON 09.08.2009, 17.12.2009, 30.12.2009, 11.01.2010, 27.07.2010 AND 09.03.2012. IN THE COURSE OF HEARIN GS BEFORE HIM, THE ITA NOS.1855 & 1856/PN/2012 COMMISSIONER ALSO CONFRONTED THE ASSESSEE THAT CERT AIN AMENDMENTS TO THE OBJECTS CLAUSE AFTER THE GRANT OF REGISTRATION IN 1 991 WERE MADE BY THE ASSESSEE AND NOT INTIMATED TO THE DEPARTMENT AND TH EREFORE ON THIS COUNT ALSO ASSESSEE WAS SHOW-CAUSED AS TO WHY THE REGISTRATION GRANTED U/S 12A(A) OF THE ACT BE NOT WITHDRAWN. IN SUM AND SUBSTANCE, TH E COMMISSIONER HAS PROCEEDED TO CANCEL THE REGISTRATION GRANTED U/S 12 A(A) OF THE ACT ON TWO GROUNDS, NAMELY, (I) THAT THE ACTIVITIES OF THE ASS ESSEE ARE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND ARE ACCORDINGLY HIT BY THE AMENDMENT TO SECTION 2(15) OF THE ACT MADE BY THE FINANCE ACT, 2 008 W.E.F. ASSESSMENT YEAR 2009-10 WHEREBY THE PROVISO WAS INSERTED; AND, (II) NON-INTIMATION OF CHANGES IN THE OBJECTS CLAUSE BY THE ASSESSEE TO TH E DEPARTMENT. 5. IN THE COURSE OF PROCEEDINGS BEFORE THE COMMISSI ONER, ASSESSEE RESISTED THE ACTION OF THE COMMISSIONER. IT HAS BE EN POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT DETAILED SUBM ISSIONS ON VARIOUS DATES WERE MADE BEFORE THE COMMISSIONER, COPIES OF WHICH HAVE ALSO BEEN FURNISHED IN THE PAPER BOOK FILED BEFORE US. THE C OMMISSIONER WAS NOT SATISFIED WITH THE EXPLANATIONS RENDERED BY THE ASS ESSEE AND HE HAS ULTIMATELY CANCELLED THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT FROM ASSESSMENT YEAR 2009-10 ONWARDS. IN COMING TO SUCH CONCLUSION, THE COMMISSIONER HAS HELD THAT THE ENTIRE CHARACTER AND FOCUS OF ASSESSEE HAS BECOME TOTALLY COMMERCIAL WITH AN EYE ON PROFITS AND THEREFORE IT NO LONGER REMAINS A CHARITABLE ORGANIZATION. AGAINST SUCH DE CISION OF THE COMMISSIONER, ASSESSEE IS IN APPEAL BEFORE US. 6. BEFORE US, THE RIVAL COUNSELS HAVE MADE EXTENSIV E ARGUMENTS AND IN THE COURSE OF HEARING, ASSESSEE HAS FURNISHED A VOL UMINOUS PAPER BOOK ALSO. THE RIVAL SUBMISSIONS HAVE BEEN HEARD AND THE RELEV ANT MATERIAL AND RECORD PERUSED. ITA NOS.1855 & 1856/PN/2012 7. A PRELIMINARY CHALLENGE TO THE IMPUGNED ORDER RA ISED BY THE ASSESSEE IS TO THE EFFECT THAT THE CONDITIONS PRECEDENT FOR INVOKING THE POWER OF CANCELLATION CONTAINED IN SECTION 12AA(3) OF THE AC T ARE NOT FULFILLED IN THE PRESENT CASE. ACCORDING TO THE APPELLANT, THE PROV ISIONS OF SECTION 12AA(3) OF THE ACT CAN BE INVOKED ONLY ON FULFILLMENT OF TWO C ONDITIONS, NAMELY, FIRSTLY, THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT GENUINE; AND, SECONDLY, THAT THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE. THE STAND OF THE LEARNED REPRESENTATIVE IS THAT ON BOTH THE AFORESAID POINTS THERE IS NO ADVER SE FINDING BY THE COMMISSIONER AND THEREFORE THE IMPUGNED ORDER IS LA CKING IN JURISDICTION. IT IS ALSO CANVASSED THAT THE COMMISSIONER DOES NOT HAVE UNFETTERED POWERS TO CANCEL THE REGISTRATION AND THAT THE CANCELLATION C AN BE EFFECTED ONLY ON THE GROUNDS SPECIFIED IN SECTION 12AA(3) OF THE ACT. I N SUPPORT OF THIS PROPOSITION, RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISION S : (I) CIT VS. SARVODAYA ILAKKIYA PANNAI, (2012) 343 I TR 300 (MAD); (II) CIT VS. VED NIKETAN DHAM, (2013) 219 TAXMANN.C OM 115 (P&H); AND, (III) TAMIL NADU CRICKET ASSOCIATION VS. DIRECTOR O F INCOME TAX (EXEMPTIONS), (2013) 86 CCH 0212 (MAD). 8. IT IS SOUGHT TO BE CANVASSED THAT THE ALLEGED IN FRINGEMENT OF THE AMENDED SECTION 2(15) OF THE ACT HAS NO RELEVANCE I N THE CONTEXT OF THE GROUNDS CONTAINED IN SECTION 12AA(3) OF THE ACT FOR CANCELLATION OF REGISTRATION. AS PER THE APPELLANT, THE REQUIREMENT AS TO WHETHER OBJECTS OF A TRUST OR INSTITUTION FALL WITHIN THE AMBIT OF THE AMENDED SE CTION 2(15) OF THE ACT IS NOT A FACTOR FOR CANCELLATION OR WITHDRAWAL OF REGISTRATI ON U/S 12AA(3) OF THE ACT AND IN SUPPORT RELIANCE HAS BEEN PLACED ON THE FOLLOWIN G DECISIONS OF THE TRIBUNAL:- (I) HP GOVERNMENT ENERGY DEVELOPMENT AGENCY VS. CIT , (2010) 46 DTR 126 (CHAD.); (II) VIDARBHA CRICKET ASSOCIATION VS. CIT, ITA NO.3 /NAG/2010 DATED 30.05.2011; ITA NOS.1855 & 1856/PN/2012 (III) GUJARAT CRICKET ASSOCIATION VS. DIT (EXEMPTIO NS), ITA NO.93/AHD/2011 DATED 31.01.2012; (IV) SAURASHTRA CRICKET ASSOCIATION VS. CIT, 40 TAX MANN.COM 527; (V) AGRA DEVELOPMENT AUTHORITY VS. CIT, (2013) 31 T AXMANN.COM 40 (AGRA); AND, (VI) PRITHVIRAJ KAPOOR MEMORIAL TRUST, (2013) 43 TA XMANN.COM 20. 9. COMING TO THE OTHER OBJECTION RAISED BY THE COMM ISSIONER TO THE EFFECT THAT THE CHANGE IN OBJECTS OF THE ASSESSEE HAVE NOT BEEN INTIMIDATED TO THE DEPARTMENT, THE LEARNED COUNSEL POINTED OUT THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER FOR ASSESS MENT YEAR 2009-10, THE COPIES OF CONSTITUTION OF ASSESSEE-ASSOCIATION WAS DULY FURNISHED. IT IS ALSO POINTED OUT THAT COPIES OF THE CONSTITUTION OF THE ASSESSEE, AS AMENDED OVER A PERIOD OF TIME, WERE ALSO FURNISHED BEFORE THE CO MMISSIONER, AND COPIES OF THE SAME HAVE BEEN PLACED AT PAGES 5 TO 64 OF THE P APER BOOK. THE LEARNED COUNSEL HAS REFERRED TO THE CHANGE IN THE OBJECTS C LAUSE, WHICH HAS BEEN NOTED BY THE COMMISSIONER AND EXPLAINED THE STAND O F THE APPELLANT SOCIETY. AT THE OUTSET, ACCORDING TO HIM, MERE NON-COMMUNICA TION OF CHANGE IN OBJECTS CLAUSE CANNOT BE A GROUND TO CANCEL REGISTRATION IN TERMS OF SECTION 12AA(3) OF THE ACT. ALTERNATIVELY, IT IS POINTED OUT THAT THE CHANGED OBJECTS DO NOT ENTAIL ANY NEW OBJECTIVES BUT THEY MERELY CONFER ADDITIONA L POWERS IN ORDER TO ACCOMPLISH THE PRE-EXISTING OBJECTS OF DEVELOPMENT AND PROMOTION OF THE GAME OF CRICKET. THE LEARNED COUNSEL VEHEMENTLY AR GUED THAT THOUGH ADDITION TO THE OBJECTS CLAUSE, WITHOUT INTIMATION TO THE DE PARTMENT CANNOT BE A GROUND FOR CANCELLATION; BUT NOTWITHSTANDING THE SAME, IT COULD BE TAKEN AS A GROUND FOR CANCELLATION ONLY IN CASE THE ADDITIONAL OBJECT S RESULT IN ACTIVITIES, WHICH CONTRAVENE THE CHARITABLE PURPOSE DEFINED IN SECT ION 2(15) OF THE ACT. ACCORDING TO HIM, IN THE INSTANT CASE, THE ADDITION AL OBJECTS DO NOT VIOLATE THE CHARITABLE NATURE OF ASSESSEES ACTIVITIES. THE LE ARNED COUNSEL ALSO POINTED OUT THAT THE COMMISSIONER ERRED IN RELYING ON THE D ECISION OF THE MUMBAI ITA NOS.1855 & 1856/PN/2012 BENCH OF THE TRIBUNAL IN THE CASE OF BOARD OF CONTR OL FOR CRICKET IN INDIA VS. ITO, (2012) 22 TAXMANN.COM 29 (MUM). ACCORDING TO THE ASSESSEE, THE SAID DECISION OF THE TRIBUNAL IS DISTINGUISHABLE ON FACT S. ON THE AFORESAID BASIS, IT IS SOUGHT TO BE MADE OUT THAT THE COMMISSIONER HAS WRONGLY INVOKED SECTION 12AA(3) OF THE ACT IN THE PRESENT CASE. 10. ON THE OTHER HAND, THE LEARNED CIT-DR HAS JUSTI FIED THE ACTION OF THE COMMISSIONER TO CANCEL THE REGISTRATION ORIGINALLY GRANTED TO THE ASSESSEE ON 09.12.1991 U/S 12A OF THE ACT. ACCORDING TO HER, O VER A PERIOD OF TIME THE OBJECT OF PROMOTING AND DEVELOPING THE GAME OF CRIC KET HAS YIELDED TO ACTIVITIES WHEREBY ASSESSEE WAS PROMOTING THE GAME OF CRICKET ON COMMERCIAL BASIS AND IN A MANNER WHICH AMOUNTED TO ENTERTAINME NT. IN THIS CONTEXT, REFERENCE HAS BEEN MADE TO THE MANNER IN WHICH T-20 MATCHES ARE CONDUCTED. ACCORDING TO HER, THE CONDUCT OF THE GA ME OF CRICKET IN THE MANNER DONE BY THE ASSESSEE, AND WHICH HAS BEEN POINTED OU T BY THE COMMISSIONER IN THE SHOW-CAUSE NOTICE, NAMELY, HOLDING OF TOURNA MENTS OF BCCI FOR WHICH PAYMENTS ARE RECEIVED FROM BCCI, CLEARLY OFFENDED T HE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT. THE POINT MADE ON BEHALF OF THE REVENUE IS THAT EVEN IF THE ACTIVITIES OF THE ASSESSEE ARE FOR ADVA NCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, BUT THEY DO NOT REMAIN FOR CHARITABLE PURPOSE BECAUSE OF THE DISABILITY CONTAINED IN THE FIRST PROVISO TO SECTION 2(15) OF THE ACT INSERTED BY THE FINANCE ACT, 2008 W.E.F. ASSESSMENT YEAR 2009-10. IN THIS MANNER, THE ORDER OF THE COMMISSIONER CANCELLING RE GISTRATION IS SOUGHT TO BE DEFENDED. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE DISPUTE BEFORE US REVOLVES AROUND THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT, WHICH HAS SINCE BEEN CANCELLED BY THE COMM ISSIONER BY INVOKING SECTION 12AA(3) OF THE ACT. THE SIGNIFICANCE OF TH E REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT LIES IN THE FACT THAT I T ENTITLES THE ASSESSEE TO ITA NOS.1855 & 1856/PN/2012 CLAIM EXEMPTIONS UNDER SECTION 11 OF THE ACT, OF CO URSE SUBJECT TO THE FULFILLMENT OF OTHER CONDITIONS PRESCRIBED THEREIN. 12. SECTION 12AA(1) OF THE ACT PRESCRIBES THE PROCE DURE FOR REGISTRATION AND IN TERMS THEREOF THE COMMISSIONER IS TO SATISFY HIM SELF ABOUT THE GENUINENESS OF THE ACTIVITIES AND THE OBJECTS OF THE APPLICANT BEFORE HIM. THEREAFTER, THE COMMISSIONER IS EMPOWERED TO PASS AN ORDER REGISTER ING OR REFUSING TO REGISTER AN APPLICANT BEFORE HIM. A PERUSAL OF SEC TION 12AA(1) OF THE ACT REVEALS THAT AT THE TIME OF REGISTRATION THE TWO IN GREDIENTS REQUIRED TO BE EXAMINED BY THE COMMISSIONER ARE THAT (I) THE OBJEC TS OF THE APPLICANT ARE FOR CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT; AND, (II) THE ACTIVITIES OF THE APPLICANT ARE GENUINE. 13. IN THE PRESENT CASE, WE ARE CONCERNED SUB-SECTI ON (3) OF SECTION 12AA OF THE ACT, WHICH PERMITS THE COMMISSIONER TO CANCE L THE REGISTRATION GRANTED IN TERMS OF SECTION 12AA(1) OF THE ACT. A PERUSAL OF SECTION 12AA(3) OF THE ACT REVEALS THAT IN ORDER TO CANCEL THE REGISTRATION AL READY GRANTED, THE COMMISSIONER OUGHT TO BE SATISFIED ON TWO COUNTS FIRSTLY, THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT GENUINE; AND, SECO NDLY, THAT THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR THE INSTITUTION, AS THE CASE MAY BE. IT IS QUITE CLEAR THAT POWER O F THE COMMISSIONER TO CANCEL THE REGISTRATION U/S 12AA(3) OF THE ACT IS NOT WITH OUT FETTERS, AND IS RATHER CIRCUMSCRIBED BY THE CONDITIONS PRESCRIBED THEREIN. NOTABLY, THE PHRASEOLOGY OF SECTION 12AA(3) OF THE ACT DOES NOT PERMIT THE C OMMISSIONER TO UNDERTAKE A WHOLESALE REVIEW OF THE INGREDIENTS WHICH WERE CO NSIDERED BY HIM WHILE GRANTING REGISTRATION U/S 12A OF THE ACT. FOR THE INSTANCE, AT THE TIME OF REGISTRATION ONE OF THE FACTORS TO BE CONSIDERED BY THE COMMISSIONER IS AS TO WHETHER THE OBJECTS OF THE APPLICANT FALL WITHIN TH E MEANING OF CHARITABLE PURPOSE AS PER SECTION 2(15) OF THE ACT. IN CONTR AST, AT THE TIME OF CANCELLING OF REGISTRATION U/S 12AA(3) OF THE ACT, THE COMMISS IONER HAS TO SATISFY HIMSELF ITA NOS.1855 & 1856/PN/2012 ONLY ABOUT THE TWO CONDITIONS PRESCRIBED THEREIN, N AMELY, THAT THE ACTIVITIES ARE NOT GENUINE OR THAT THE ACTIVITIES ARE NOT BEING CA RRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CAS E MAY BE. PERTINENTLY, THE SATISFACTION THAT THE OBJECTS OF THE TRUST OR INSTI TUTION ARE COMPLIANT WITH THE DEFINITION OF CHARITABLE PURPOSE CONTAINED IN SEC TION 2(15) OF THE ACT IS NOT A CONDITION PRESCRIBED IN SECTION 12AA(3) OF THE ACT WHICH ENVISAGES CANCELLATION OF REGISTRATION; WHEREAS, THE SAME IS ONE OF THE FACTORS ON WHICH THE COMMISSIONER IS REQUIRED TO BE SATISFIED AT THE TIME OF GRANT OF REGISTRATION. IT IS QUITE WELL UNDERSTOOD THAT A STATUTORY AUTHOR ITY HAS NO POWER, JURISDICTION OR DISCRETION TO GO BEYOND THE STATUTORY PROVISIONS . IN OTHER WORDS, NO POWER CAN BE ASSUMED IN THE ABSENCE OF ANY SPECIFIC PROVI SION. ON THE BASIS OF THE AFORESAID, IT CAN BE DEDUCED THAT SECTION 12AA(3) P ERMITS CANCELLATION OF REGISTRATION GRANTED TO A TRUST OR SOCIETY ONLY IF THE COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE STATED OBJECTS T HEREOF AND THE REGISTRATION CANNOT BE CANCELLED BY MERELY REVIEWING THE OBJECTS OF THE TRUST OR INSTITUTION. THE JUDGEMENT OF THE HONBLE MADRAS HIGH COURT IN T HE CASE OF SARODAY ILLAKIYA PANNAI (SUPRA) AND THAT OF THE HONBLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF VED NIKETAN DHAM (SUPRA), ALSO SUPPORT THE AFORESAID PROPOSITION. 14. IN THIS BACKGROUND, NOW WE MAY EXAMINE THE FACT S OF THE PRESENT CASE. THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE SOCI ETIES REGISTRATION ACT, 1860 AND HAS ALSO BEEN GRANTED REGISTRATION U/S 12A OF THE ACT ON 19.12.1991. THE OBJECTS OF THE ASSESSEE SOCIETY, AS APPEARING I N ITS MEMORANDUM OF ASSOCIATION, QUITE CLEARLY ESTABLISH THAT THEY SEEK TO ENCOURAGE PHYSICAL EDUCATION, FOSTER AND MAINTAIN FRIENDLY AND CORDIAL RELATIONSHIP THROUGH SPORT TOURNAMENTS AND COMPETITIONS IN CONNECTION THEREWIT H AND TO CREATE A HEALTHY SPIRIT IN THE COUNTRY THROUGH THE MEDIUM OF SPORTS IN GENERAL AND CRICKET IN PARTICULAR. THE OBJECTS ALSO, INTER-ALIA, INCLUDE ACTIVITIES TO INSTILL THE SPIRIT OF SPORTSMANSHIP IN DESERVING STUDENTS ATTENDING SCHOO LS AND COLLEGES AND ITA NOS.1855 & 1856/PN/2012 MEMBERS OF OTHER INSTITUTIONS THROUGH THE SPORT OF CRICKET. THE OBJECTS ALSO INCLUDE TO ARRANGE, MANAGE, CONTROL AND REGULATE TO URNAMENT AND MATCHES OF CRICKET. IN SUM AND SUBSTANCE, THE OBJECTS SEEK TO ENCOURAGE, PROMOTE, DEVELOP AND CONTROL THE GAME OF CRICKET IN THE SPEC IFIED AREAS OF MAHARASHTRA. THE OBJECTS ALSO INCLUDE SPONSORING AND/OR TO SUBSC RIBE TO FUNDS FOR THE BENEFIT OF CRICKETERS OR THEIR FAMILIES. IT IS ALS O EMPOWERED TO COLLECT FUNDS AND TO UTILIZE SUCH FUNDS IN THE MANNER AS THE MANAGING COMMITTEE MAY CONSIDER DESIRABLE FOR THE FULFILLMENT OF THE OBJECTS OF THE ASSOCIATION. IT IS ALSO EMPOWERED TO IMPLEMENT THE LAWS OF THE GAME OF CRIC KET AND RULES AND REGULATIONS FORMULATED BY THE BOARD OF CONTROL FOR CRICKET IN INDIA. WE ARE ONLY POINTING OUT THE AFORESAID FOR THE REASON THAT THE ACTIVITIES AND OBJECTS OF THE ASSESSEE REVOLVE AROUND PROMOTING, DEVELOPING A ND CONTROLLING THE GAME OF CRICKET IN THE AREAS SPECIFIED. 15. AFTER CONSIDERING THE GENUINENESS OF SUCH OBJEC TS AND THE SAME BEING IN COMPLIANT WITH THE DEFINITION OF CHARITABLE PUR POSE CONTAINED IN SECTION 2(15) OF THE ACT, ASSESSEE WAS GRANTED REGISTRATION AS A CHARITABLE INSTITUTION U/S 12A OF THE ACT ON 09.12.1991. IT IS ONLY ON 07 .08.2009 THAT A NOTICE WAS ISSUED BY THE COMMISSIONER U/S 12AA(3) OF THE ACT P OINTING OUT THAT ASSESSEE WAS PROMOTING SPORT ACTIVITY ON A COMMERCIAL BASIS BY HOLDING VARIOUS TOURNAMENTS OF BCCI VIZ. RANJI TROPHY MATCHES, WORL D CUP TRIAL MATCHES, TWENTY-TWENTY TOURNAMENTS, ETC. FOR WHICH BCCI WAS MAKING PAYMENTS TO ASSESSEE. ACCORDING TO THE COMMISSIONER, THE AFORE SAID WAS A COMMERCIAL ACTIVITY SO AS TO BE HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT AS INSERTED BY THE FINANCE ACT, 2008. THE CASE OF THE REVENUE RES TS ON THE AMENDMENT MADE TO SECTION 2(15) OF THE ACT BY INSERTION OF TH E FIRST PROVISO, WHICH READS AS UNDER :- 2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE PO OR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLU DING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES O R OBJECTS OF ARTISTIC OR ITA NOS.1855 & 1856/PN/2012 HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHE R OBJECT OF GENERAL PUBLIC UTILITY PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY A CTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, 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; 16. THE AFORESAID AMENDMENT SEEKS TO EXCLUDE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY FROM CHARITABLE PURPOSE TO THE EXTENT IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE I N RELATION TO ANY TRADE COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, O R RETENTION, OF THE INCOME FROM SUCH ACTIVITY. AS PER THE COMMISSIONER, FOR HOLDIN G VARIOUS TOURNAMENTS AND MATCHES ON BEHALF OF BCCI, ASSESSEE WAS RECEIVING P AYMENT FROM BCCI, AND THUS SUCH ACTIVITIES INVOLVE RENDERING SERVICES IN RELATION TO TRADE, COMMERCE OR BUSINESS AND THEREFORE THE ACTIVITIES OF THE ASS ESSEE NO LONGER REMAIN FOR CHARITABLE, HAVING REGARD TO THE PROVISO TO SECTI ON 2(15) INSERTED BY THE FINANCE ACT, 2008 W.E.F. ASSESSMENT YEAR 2009-10. 17. IN OTHER WORDS, THE CHARGE MADE BY THE COMMISSI ONER AGAINST THE ASSESSEE IN ORDER TO CANCEL THE REGISTRATION U/S 12 AA(3) OF THE ACT IS ON THE BASIS OF THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT WHICH ACCORDING TO HIS PERCEPTION RENDERED ASSESSEES ACTIVITIES AS FA LLING OUTSIDE THE EXPRESSION CHARITABLE PURPOSE U/S 2(15) OF THE ACT. THE MOO T POINT IS AS TO WHETHER SUCH PERCEPTION OF THE COMMISSIONER FALLS WITHIN THE SCO PE AND AMBIT OF THE POWER AVAILABLE WITH HIM U/S 12AA(3) OF THE ACT. ON THIS ASPECT, WE FIND THAT A SOMEWHAT SIMILAR SITUATION WAS CONSIDERED BY THE NA GPUR BENCH OF THE TRIBUNAL IN THE CASE OF VIDARBHA CRICKET ASSOCIATIO N VS. CIT VIDE ITA NO.3/NAG/2010 DATED 30.05.2011. IN THE SAID CASE, REGISTRATION GRANTED TO THE ASSESSEE WAS SOUGHT TO BE CANCELLED U/S.12AA(3) OF THE ACT ON THE BASIS OF AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT, AN OBJECTION WHICH IS SIMILAR TO ITA NOS.1855 & 1856/PN/2012 THAT RAISED BY THE COMMISSIONER IN THE PRESENT CASE . THE TRIBUNAL HELD THAT THE GROUND FOR CANCELLATION INVOKED BY THE COMMISSI ONER WAS NOT PERMISSIBLE IN VIEW OF THE LIMITED POWERS AVAILABLE TO HIM U/S. 12AA(3) OF THE ACT. IN THIS CONTEXT, THE FOLLOWING DISCUSSION BY THE TRIBUNAL I S RELEVANT:- '7. IN THIS VIEW OF THE MATTER, WE MAY NOW EXAMINE THE REASONS PUT-FORTH BY THE COMMISSIONER IN THIS CASE TO CANCEL REGISTRA TION ALREADY GRANTED TO THE ASSESSEE UNDER SECTION 12A OF THE ACT. IN THIS DIRE CTION, WE HAVE CAREFULLY PERUSED THE IMPUGNED ORDER, WHEREIN THE COMMISSIONE R HAS PRIMARILY EXAMINED THE APPLICATION OF REVISED DEFINITION OF C HARITABLE PURPOSE UNDER SECTION 2(15) AS AMENDED BY THE FINANCE ACT, 2008 W ITH EFFECT FROM 1.4.2009. THE ULTIMATE CONCLUSION OF THE COMMISSIONER IN PARA GRAPH 17 OF THE IMPUGNED ORDER IS PERTINENT, WHICH IS REPRODUCED AS UNDER: '17. IN VIEW OF THE AMENDED PROVISIONS OF SEC.2(15) , I IS SEEN THAT ASSESSEE 'S ACTIVITIES CAN NO LONGER BE REGARDED AS CHARITABLE ACTIVITIES. ESPECIALLY THE PROVISO TO SEC. 2(15) IS VIOLATED BY ASSESSEE AND HENCE, IT CANNOT BE REGARDED AS A CHARITABLE SO CIETY ENGAGED IN CHARITABLE PURPOSES. I HAVE DULY CONSIDERED THE NAT URE OF ACTIVITIES, THE SOURCES OF INCOME, THE ACTIVITIES ON WHICH EXPENDIT URE WAS MADE, SURPLUS GENERATED EXISTENCE OF PROFIT MOTIVE, COMME RCIAL EXPLOITATION OF ASSETS, FEES AND CHARGES COLLECTED, NATURE OF OT HER INCOME AND OTHER ACTIVITIES AND CASE LAW BEFORE COMING TO A FI NAL CONCLUSION, THE ASSESSEE VIDARBHA CRICKET ASSOCIATION CANNOT BE HEL D TO BE AN ORGANIZATION MEANT FOR CHARITABLE PURPOSES IN VIEW OF THE ABOVE FINDINGS. 18. IN THE RESULT, THE DEEMED REGISTRATIO N BENEFIT UNDER SECTION 12AA AS CLAIMED AND ENJOYED BY THE ASSESSEE IS HEREBY WITHDRAWN/ CANCELLED FROM ASSESSMENT YEAR 2009-10 O NWARDS.' 8. ON A PERUSAL OF THE AFORESAID, IT IS CLEARLY EST ABLISHED THAT AS PER THE COMMISSIONER, THE ACTIVITIES OF THE ASSESSEE DO NOT QUALIFY TO FALL WITHIN THE MEANING OF CHARITABLE PURPOSE AS PER PROVISO TO SEC TION 2(15) INSERTED WITH EFFECT FROM 1.4.2009. QUITE CLEARLY, AS WE HAVE OBS ERVED EARLIER, SUCH AN OBJECTION CANNOT BE THE BASIS OF INVOKE SECTION 12A A(3) SO AS TO CANCEL THE REGISTRATION ALREADY GRANTED TO THE ASSESSEE UNDER SECTION 12A OF THE ACT. IN OUR CONSIDERED OPINION REGISTRATION ALREADY GRANTED TO THE ASSESSEE COULD NOT HAVE BEEN RE-VISITED BY THE COMMISSIONER ON THE BAS IS OF THE REASONING AFORESAID, SINCE HIS POWER TO CANCEL REGISTRATION U NDER SECTION 12AA(3) WAS CONFINED TO THE EXAMINATION AS TO WHETHER THE ACTIV ITIES OF THE ASSESSEE SOCIETY/ASSOCIATION ARE GENUINE OR THAT THE SAME AR E NOT BEING CARRIED OUT IN ACCORDANCE WITH THE STATED OBJECTS. IN THE LIGHT OF THE DISCUSSION EMERGING FROM THE ORDER OF THE COMMISSIONER IN OUR CONSIDERE D OPINION, ACTION TAKEN BY THE COMMISSIONER DOES NOT FALL WITHIN THE PARAMETER S OF SECTION 12AA(3) OF THE ACT AND, THEREFORE, THE IMPUGNED ORDER IS BAD I N LAW. 9. AT THIS STAGE, WE MAY HASTEN TO ADD THAT WE ARE NOT COMMENTING ON THE MERITS OF THE ISSUE AS TO WHETHER THE ACTIVITIE S OF THE ASSESSEE FALL WITHIN THE MEANING OF EXPRESSION CHARITABLE PURPOSE PER SE CTION 2(15) AS AMENDED WITH EFFECT FROM 1.4.2009. THE ONLY POINT DECIDED I N THE APPEAL IS TO THE EFFECT THAT IT WAS NOT WITHIN THE SCOPE AND AMBIT OF SECTI ON 12AA(3) FOR THE COMMISSIONER TO HAVE EXAMINED THE APPLICABILITY OF THE AMENDED SECTION 2(15) OF THE PURPOSES OF INVOKING HIS POWERS OF CAN CELLATION PROVIDED IN SECTION 12AA(3) OF THE ACT. AT THIS STAGE, WE MAY A LSO STATE THAT THE ISSUES RAISED BY THE COMMISSIONER IN THE IMPUGNED ORDER AR E NOT BEYOND THE POWERS ITA NOS.1855 & 1856/PN/2012 OF THE REVENUE TO EXAMINE, SO HOWEVER, THE SAME CAN ONLY BE EXAMINED IN THE APPROPRIATE PROCEEDINGS, SUCH AS ASSESSMENT PROCEED INGS IN THE PRESENT CASE. OUR DECISION IS RESTING ONLY ON THE FOUNDATIO N THAT THE IMPUGNED ORDER P[ASSED BY THE COMMISSIONER IS NOT PERMISSIBLE IN V IEW OF THE LIMITED POWERS AVAILABLE TO HIM UNDER SECTION 12AA(3) OF THE ACT. HOWEVER IT WOULD BE OPEN FOR THE A.O. TO CONSIDER THE ISSUES RAISED IN THE I MPUGNED ORDER, IF SO ADVISED, IN THE COURSE OF THE RELEVANT ASSESSMENT PROCEEDING S.' 18. SIMILAR SITUATION ALSO AROSE BEFORE THE RAJKOT BENCH OF THE TRIBUNAL IN THE CASE OF SAURASHTRA CRICKET ASSOCIATION VS. CIT, (2013) 40 TAXMANN.COM 527, WHEREIN ALSO THE ACTION OF THE COMMISSIONER U/ S 12AA(3) OF THE ACT HAS BEEN FOUND TO BE UNTENABLE, AND THE RELEVANT DISCUS SION IS AS UNDER :- 16. RIVAL SUBMISSIONS WERE CONSIDERED. ADMITTEDLY, IN T HE PRESENT CASE, THE REGISTRATION HAS BEEN CANCELLED BY CIT, R AJKOT-2, RAJKOT ON THE BASIS OF AMENDED PROVISIONS OF SECTION 2(15) OF THE INCOME-TAX ACT, 1961; THEREFORE WE ARE OF THE CONSIDERED OPINION THAT THE ACTION TAKEN BY THE LD CIT, RAJKOT-2, RAJKOT DOES NOT FALL WITHIN THE PERMISSIB LE LIMITS OF SECTION 12AA(3) OF THE INCOME-TAX ACT, 1961 AND THEREFORE, THE IMPU GNED ORDER IS BAD IN LAW. SIMILAR VIEW IS TAKEN BY THE AHMEDABAD 'A' BENCH OF ITAT, AHMEDABAD IN THE CASE OF GUJARAT CRICKET ASSOCIATION (SUPRA) AND THE RATIO OF THE SAID JUDGMENT IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE ALSO. WITH REGARD TO THE JUDGMENT OF ITAT, CHENNAI 'B' BENCH I N THE CASE OF TAMIL NADU CRICKET ASSOCIATION (SUPRA) AND ITAT, MUMBAI BENCH IN THE CASE OF MUMBAI CRICKET ASSOCIATION (SUPRA), AS RELIED UPON BY THE LD DEPARTMENTAL REPRESENTATIVE; WE ARE OF THE VIEW THAT THE SAME AR E DISTINGUISHABLE AS RIGHTLY POINTED OUT BY THE LD COUNSEL OF THE ASSESSEE-TRUST . RECENTLY, ITAT CHENNAI 'B' BENCH, IN THE CASE OF MADRAS MOTOR SPORTS CLUB V. DIT (EXEMPTIONS) [2013] 141 ITD 1/30 TAXMANN.COM 135 , IN ALMOST IDENTICAL FACTS RESTORED THE REGISTRATION, WHICH WAS CANCELLED BY L D DIT (EXEMPTIONS), OBSERVING THAT THE NATURE OF OBJECTS OF THE ASSESSE E CANNOT FLUCTUATE IN TANDEM WITH THE QUANTUM OF RECEIPTS MENTIONED IN TH E FIRST PROVISO TO SECTION 2(15) OF THE INCOME-TAX ACT, 1961. THE ISSUE RAISED BY THE CIT, RAJKOT-2, RAJKOT IN THE IMPUGNED ORDER REGARDING THE ACTIVITI ES OF THE TRUST CAN BE EXAMINED BY THE ASSESSING OFFICER IN THE APPROPRIAT E PROCEEDINGS AND OUR DECISION IS RESTING ONLY ON THE BASIS OF THE FINDIN GS GIVEN BY THE LD CIT, RAJKOT- 2, RAJKOT IN THE IMPUGNED ORDER WHICH IS NOT PERMIS SIBLE KEEPING IN VIEW THE LIMITED POWER AVAILABLE TO HIM U/S 12AA(3) OF THE I NCOME-TAX ACT, 1961. THEREFORE, IT WOULD BE OPEN FOR THE ASSESSING OFFIC ER TO CONSIDER ALL THE ISSUE RAISED IN THE IMPUGNED ORDER, IF SO ADVISED, IN THE COURSE OF ASSESSING PROCEEDINGS OF RELEVANT YEARS. 19. IN-FACT, THE CHARGE AGAINST THE ASSESSEE OF HAV ING CARRIED OUT ITS ACTIVITIES ON COMMERCIAL LINE WAS ALSO MADE A BASIS BY THE REVENUE IN THE CASE OF TAMIL NADU CRICKET ASSOCIATION (SUPRA) FOR CANCELING REGISTRATION U/S 12AA(3) OF THE ACT. IN THE SAID CASE, THE COMMISSI ONER NOTED THAT THE RECEIPTS OF THE ASSESSEE INCLUDED EARNINGS FROM SUBSCRIPTION ; RENT FOR HIRING CRICKET ITA NOS.1855 & 1856/PN/2012 GROUND, ROOMS AND PREMISES; FEES FOR PROVIDING SERV ICES TO IPL; INCOME FROM ADVERTISEMENT; SUBSIDY FROM BCCI; SALE OF TICKETS F OR CONDUCTING OF MATCHES; RESTAURANT AND CATERING INCOME; ETC.. THE AFORESAI D RECEIPTS IN THE HANDS OF TAMIL NADU CRICKET ASSOCIATION WERE HELD BY THE COM MISSIONER TO BE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND THUS HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT AND THEREFORE HE PROCEEDED TO WITH DRAW THE REGISTRATION GRANTED TO THE ASSESSEE BY INVOKING SECTION 12AA(3) OF THE ACT. THE SAID ACTION OF THE COMMISSIONER HAS BEEN FOUND TO BE UNT ENABLE BY THE HONBLE HIGH COURT OF THE MADRAS, AND THE FOLLOWING DISCUSS ION OF THE HONBLE HIGH COURT IS WORTHY OF NOTICE IN THIS REGARD :- 32. THUS IN CONTRAST TO SECTION 12AA(1)(B) OF THE INCOME TAX ACT, 1961, WHERE THE GRANT OF REGISTRATION REQUIRES SATI SFACTION ABOUT THE OBJECTS OF THE TRUST AS WELL AS GENUINENESS OF THE ACTIVITIES, FOR THE CANCELLATION OF THE REGISTRATION UNDER SECTION 12AA (3), ALL THAT IT IS INSISTED UPON IS THE SATISFACTION AS TO WHETHER THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE GENUINE OR NOT AND WHETHER THE A CTIVITIES ARE BEING CARRIED ON IN ACCORDANCE WITH THE OBJECTS OF THE TR UST. THUS, EVEN IF THE TRUST IS A GENUINE ONE I.E., THE OBJECTS ARE GENUIN E, IF THE ACTIVITIES ARE NOT GENUINE AND THE SAME NOT BEING CARRIED ON IN AC CORDANCE WITH THE OBJECTS OF THE TRUST, THIS WILL OFFER A GOOD GROUND FOR CANCELLATION. THUS, IN EVERY CASE, GRANT OF REGISTRATION AS WELL AS CAN CELLATION OF REGISTRATION RESTS ON THE SATISFACTION OF THE COMMISSIONER ON FI NDINGS GIVEN ON THE PARAMETERS GIVEN IN SECTION 12AA(1) AND 12AA(3) OF THE ACT, AS THE CASE MAY BE. 33. REGISTRATION OF THE TRUST UNDER THE ACT, CONFER S CERTAIN BENEFITS FROM TAXATION UNDER THE PROVISIONS OF THE ACT. THE CONDITIONS UNDER WHICH THE INCOME OF THE TRUST WOULD BE EXEMPTED UND ER THE PROVISIONS OF THE ACT ARE CLEARLY LAID DOWN UNDER SECTION 11 A S WELL AS IN SECTION 12 OF THE ACT. SECTION 11 OF THE ACT SPECIFICALLY P OINTS OUT THE CIRCUMSTANCES UNDER WHICH INCOME OF THE TRUST IS NO T TO BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON . SO TOO, SECTION 12 OF THE ACT ON THE INCOME DERIVED FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES. 34. 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 WH ICH DOES NOT QUALIFY FOR EXEMPTION STRAIGHT AWAY BY ITSELF. ALL THAT ULT IMATELY WOULD ARISE IN SUCH CASES IS THE QUESTION OF CONSIDERING WHETHER S ECTION 11 OF THE ACT WOULD AT ALL APPLY TO EXEMPT THESE INCOME FROM LIAB ILITY. THESE ARE MATTERS OF ASSESSMENT AND HAS NOTHING TO DO WITH TH E GENUINENESS OF THE ACTIVITY OR THE ACTIVITIES NOT IN CONFORMITY WI TH THE OBJECTS OF THE TRUST. AS RIGHTLY POINTED OUT BY LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE, AS IS EVIDENT FROM THE READING OF CIRCUL AR NO.11 OF 2008 DATED 19.12.2008, THE OBJECT OF THE INSERTION OF F IRST PROVISO TO SECTION ITA NOS.1855 & 1856/PN/2012 2(15) OF THE ACT WAS ONLY TO CURTAIL INSTITUTION, W HICH UNDER THE GARB OF 'GENERAL PUBLIC UTILITY', CARRY ON BUSINESS OR COMMERCIAL ACTIVITY ONLY TO ESCAPE THE LIABILITY UNDER THE ACT THEREBY G AIN UNMERITED EXEMPTION UNDER SECTION 11 OF THE ACT. 20. ON THE BASIS OF THE AFORESAID JUDICIAL RULINGS, IT HAS TO BE CONCLUDED THAT THE REGISTRATION U/S 12A OF THE ACT GRANTED TO THE ASSESSEE ON 09.12.1991 CANNOT BE CANCELLED BY THE COMMISSIONER IN TERMS OF SECTION 12AA(3) OF THE ACT ON THE BASIS OF THE AMENDMENT MADE TO SECTION 2 (15) OF THE ACT BY WAY OF INSERTION OF THE FIRST PROVISO BY FINANCE ACT, 2008 . 21. FURTHER, WE HASTEN TO ADD HERE THAT WE ARE NOT IN THE PROCESS OF ADJUDICATING THE MERITS OF THE DISPUTE AS TO WHETHE R OR NOT THE IMPUGNED ACTIVITIES OF THE ASSESSEE QUALIFY FOR EXEMPTION UN DER SECTIONS 11 / 12 OF THE ACT BY BEING A CHARITABLE PURPOSE IN VIEW OF THE NEWLY AMENDED SECTION 2(15) OF THE ACT. PERTINENTLY, THE ONLY POINT TO BE DECI DED PRESENTLY BY US IS WHETHER THE GROUND TAKEN BY THE COMMISSIONER TO CANCEL REGI STRATION IS WITHIN THE SCOPE AND AMBIT OF SECTION 12AA(3) OF THE ACT. IT IS ONLY IN THIS CONTEXT, WE HAVE OBSERVED THAT THE COMMISSIONER IS NOT EMPOWERE D TO EXAMINE THE APPLICABILITY OF AMENDED SECTION 2(15) OF THE ACT F OR THE PURPOSES OF INVOKING HIS POWER OF CANCELLATION ENSHRINED IN SECTION 12AA (3) OF THE ACT. OUR OBSERVATION HAS TO BE UNDERSTOOD IN THE CONTEXT OF THE REQUIREMENTS OF SECTION 12AA(3) OF THE ACT ALONE. THE ISSUE RAISED BY THE COMMISSIONER IS CERTAINLY RELEVANT FOR EXAMINING ASSESSEES CLAIM OF EXEMPTIO N UNDER SECTIONS 11 AND 12 OF THE ACT IN RELATION TO IMPUGNED RECEIPTS WHIC H, IN OUR OPINION, CAN BE A SUBJECT-MATTER OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. IT IS FOR THE ASSESSING OFFICER TO TAKE NOTE OF ALL THE R ELEVANT ASPECTS WHILE CONSIDERING CLAIM OF THE ASSESSEE, IF ANY, FOR EXEM PTION U/S 11 OF THE ACT IN RELATION TO THE IMPUGNED ACTIVITIES. BE THAT AS IT MAY, FOR THE PRESENT IT WOULD SUFFICE TO HOLD THAT THE COMMISSIONER COULD NOT HAV E CANCELLED THE REGISTRATION BY INVOKING SECTION 12AA(3) OF THE ACT, BY EXAMININ G THE APPLICABILITY OF SECTION 2(15) OF THE ACT AS AMENDED BY THE FINANCE ACT, 2008 W.E.F. ITA NOS.1855 & 1856/PN/2012 01.04.2009. THUS, THE AFORESAID ACTION OF THE COMM ISSIONER IS HELD TO BE UNTENABLE. 22. ANOTHER FACTOR WHICH HAS BEEN PRESSED INTO SERV ICE BY THE COMMISSIONER IN ORDER TO CANCEL REGISTRATION IS THE ADDITION IN THE OBJECTS CLAUSE CARRIED OUT BY THE ASSESSEE SUBSEQUENT TO GR ANT OF REGISTRATION U/S 12A(A) OF THE ACT IN 1991 WITHOUT INTIMATION TO THE DEPARTMENT. AS PER THE REVENUE, FAILURE OF THE ASSESSEE TO COMMUNICATE THE CHANGE IN THE OBJECTS CLAUSE WAS A VALID GROUND FOR CANCELLATION OF REGIS TRATION IN TERMS OF SECTION 12AA(3) OF THE ACT. IN THIS CONTEXT, THE COMMISSIO NER HAS ALSO REFERRED TO CERTAIN OBSERVATIONS MADE BY THE MUMBAI BENCH OF TH E TRIBUNAL IN THE CASE OF BCCI (SUPRA). FURTHER, IN THE COURSE OF THE HEARIN G, THE LEARNED CIT-DR HAS ALSO REFERRED TO CERTAIN OBSERVATIONS MADE BY THE J AIPUR BENCH OF THE TRIBUNAL IN THE CASE OF RAJASTHAN CRICKET ASSOCIATION VS. CI T-JAIPUR (2012) 25 TAXMANN.COM 196 (JP). IN THE CASE BEFORE THE RAJAS THAN CRICKET ASSOCIATION, THE ISSUE RELATED TO THE CANCELLATION OF REGISTRATI ON BY THE COMMISSIONER IN TERMS OF SECTION 12AA(3) OF THE ACT. ONE OF THE GR OUNDS TAKEN BY THE COMMISSIONER WAS THAT THE ASSESSEE THEREIN HAD CHAN GED IT OBJECTS, AFTER HAVING OBTAINED THE REGISTRATION U/S 12A OF THE ACT . ON ACCOUNT OF NON- INTIMATION OF THE CHANGE IN OBJECTS CLAUSE, THE COM MISSIONER HAD CANCELLED THE REGISTRATION IN TERMS OF SECTION 12AA(3) OF THE ACT APART FROM OTHER GROUNDS. ON THIS ISSUE, THE TRIBUNAL HELD THAT THE COMMISSIONER WAS JUSTIFIED IN TAKING COGNIZANCE OF THE CHANGE IN THE OBJECTS C LAUSE BUT THE CANCELLATION OF REGISTRATION WAS NOT AUTOMATIC AND THAT THE RELEVAN T CHANGES WERE REQUIRED TO BE PUT THROUGH NECESSARY ENQUIRIES TO ESTABLISH THA T IT VIOLATED THE INGREDIENTS NECESSARY TO GRANT REGISTRATION, AND ONLY THEREAFTE R, THE COMMISSIONER COULD CANCEL REGISTRATION AFTER PASSING A SPEAKING ORDER. THEREFORE, MATTER WAS ULTIMATELY SET-ASIDE TO THE FILE OF THE COMMISSIONE R TO BE DECIDED AFRESH. ITA NOS.1855 & 1856/PN/2012 23. IN THE PRESENT CASE, WE FIND THAT THE COMMISSIO NER HAS MERELY NOTED THAT THERE IS AN ADDITION IN OBJECTS CLAUSE, WHICH HAS NOT BEEN INTIMATED TO THE DEPARTMENT AND THEREFORE THE REGISTRATION IS REQUIR ED TO BE CANCELLED. OSTENSIBLY, IN THE ABSENCE OF ANY FINDING THAT HOW THE ADDITIONAL OBJECTS VITIATE THE REGISTRATION EARLIER GRANTED U/S 12A OF THE ACT , THE CANCELLATION CANNOT BE EFFECTUATED. IN-FACT, IN THE CASE OF BCCI (SUPRA), THE TRIBUNAL OBSERVED THAT THE AMENDMENTS IN THE MEMORANDUM OF ASSOCIATION WER E SUBSTANTIAL AND MATERIAL CHANGES AND THEREFORE IT OPINED THAT SUCH CHANGES WERE REQUIRED TO BE EXAMINED BY THE REVENUE AUTHORITIES SO AS TO ENA BLE THE ASSESSEE TO CONTINUE AVAILING THE BENEFITS UNDER SECTIONS 11, 1 2, AND 13 OF THE ACT. 24. IN OUR CONSIDERED OPINION, IT WOULD BE APPROPRI ATE TO DEDUCE THAT MERELY BECAUSE OF AN ADDITION TO THE OBJECTS CLAUSE MADE W ITHOUT INTIMATION TO THE DEPARTMENT, THE REGISTRATION CANNOT BE IPSO FACTO CANCELLED IN TERMS OF SECTION 12AA(3) OF THE ACT, UNLESS A CASE IS MADE OUT BY TH E COMMISSIONER THAT ADDITIONAL OBJECTS DO NOT FIT-IN WITH THE EXISTING OBJECTS OR THAT SUCH ACTIVITIES ARE IN-GENUINE. IN OTHER WORDS, EVEN WHERE THE ASS ESSEE HAS MADE SOME ADDITIONS TO THE OBJECTS CLAUSE POST-REGISTRATION U /S 12A, THE COMMISSIONER HAS TO MAKE OUT A CASE AS TO HOW DOES THE TWO CONDI TIONS CONTAINED IN SECTION 12AA(3) OF THE ACT ARE MET SO AS TO JUSTIFY CANCELL ATION OF REGISTRATION. IN-FACT, IN THE PRESENT CASE, SUCH A FINDING OF THE COMMISSI ONER IS CONSPICUOUS BY ITS ABSENCE. PERTINENTLY, THE ASSESSEE HAD CANVASSED B EFORE THE COMMISSIONER THAT THE ADDITIONAL OBJECTS ALSO NOT ENVISAGE ANY A CTIVITY DIFFERENT FROM THOSE BEING CARRIED OUT ON THE BASIS OF EXISTING OBJECTS. ACCORDINGLY, WE ARE UNABLE TO UPHOLD THE ACTION OF THE COMMISSIONER CANCELING REGISTRATION U/S 12AA(3) OF THE ACT ON THIS ASPECT ALSO. 25. SO HOWEVER, AT THE TIME OF HEARING, RIVAL SUBMI SSIONS WERE ALSO HEARD IN RELATION TO THE CHANGE IN THE OBJECTS CLAUSE WHI CH PROMPTED THE COMMISSIONER TO CANCEL REGISTRATION U/S 12AA(3) OF THE ACT. PERTINENTLY, THE ITA NOS.1855 & 1856/PN/2012 ADDITIONAL OBJECTS HAVE BEEN REFERRED BY THE COMMIS SIONER IN HIS ORDER PASSED U/S 263 OF THE ACT FOR ASSESSMENT YEAR 2009- 10, WHICH IS ALSO OF EVEN DATE AND IS A SUBJECT-MATTER OF THE OTHER CAPTIONED APPEAL BEFORE US. THE STAND OF THE ASSESSEE IS THAT THE ADDITIONAL OBJECT S DO NOT ENLARGE THE SCOPE OF THE OBJECTS ALREADY EXISTING IN THE MEMORANDUM OF A SSOCIATION, BUT ARE MERELY ENABLING POWERS PROVIDED TO THE ASSESSEE FOR ACCOMP LISHMENT OF ITS ALREADY STATED OBJECTS IN THE MEMORANDUM OF ASSOCIATION. T HE CHANGES ARE IN RELATION TO INSERTION OF THREE SUB-CLAUSES IN OBJECTS CLAUSE , WHICH ARE AS UNDER :- INSERTION IN THE CLAUSE 7 OBJECT CLAUSE' POINT NO - E:- TO ESTABLISH BUILD, CONSTRUCT, OPERATE AND MAINTAIN AND ULTRA-MODERN, STATE OF ART STADIUM FOR CRICKET AND OTHER INFRASTR UCTURE FACILITIES FOR PLAYING AND PROMOTION OF CRICKET AND OTHER GAMES IN MAHARASHTRA. INSERTION IN THE CLAUSE 7 'OBJECT CLAUSE' POINT NO - F:- TO FOUND PROMOTE AND ESTABLISH BY SUBSCRIBING TO TH E MEMORANDUM AND ARTICLES OF THE ASSOCIATION OF A COMPANY LIMITE D BY GUARANTEE TO BE INCORPORATED UNDER THE PROVISION OF SECTION 25 OF T HE COMPANIES ACT, 1956 AS A 'COMPANY LIMITED BY GUARANTEE WITHOUT SHA RE CAPITAL' IN THE NAME OF ' MAHARASHTRA CRICKET' OR 'MAHARASHTRA CRIC KET AND SPORTS' OR 'MAHARASHTRA CRICKET AND LEISURE' OR SUCH OTHER NAM E AS MAY BE APPROVED BY THE REGISTRAR OF COMPANIES, MAHARASHTRA ESTABLISH TO PROMOTE, DEVELOP AND ENCOURAGE THE SPORT OF CRICKET AND OTHER SPORTS BY PROVIDING WORLD CLASS PLAYING FACILITIES, STADIU MS AND PLAYING ENVIRONMENT PROVIDING COACHING FACILITIES AND CLUB HOUSE IN MAHARASHTRA; AND TO ISSUE GUARANTEE OR GUARANTEES T IME TO TIME TO SUCH COMPANY IN CONNECTION WITH ITS FORMATION OR ESTABLI SHMENT. INSERTION IN THE CLAUSE 7 OBJECT CLAUSE POINT NO G:- TO PURCHASE, OBTAIN OR PROCURE APPROPRIATE LANDS FO R CONSTRUCTION, OF AN ULTRA-MODERN STATE OF ART STADIUM FOR CRICKET AND O THER GAMES IN MAHARASHTRA, AND TO OFFER SUCH LANDS ON LEASE OR OT HER ARRANGEMENT TO THE SECTION 25 COMPANY TO BE FOUNDED AND PROMOTED B Y THE ASSOCIATION TO BUILD, CONSTRUCT, OPERATE AND MAINTAIN THE SAID STADIUM AND OTHER FACILITIES. 26. IN THE BACKGROUND OF THE ABOVE CHANGES IN THE O BJECTS CLAUSE, THE PLEA OF THE ASSESSEE WAS THAT THERE IS NO CHANGE IN THE OBJECTS IN THE REAL SENSE. IN-FACT, IT HAS BEEN SOUGHT TO BE MADE OUT THAT THE AFORESAID CLAUSES DO NOT REFLECT OBJECTS OF THE ASSESSEE ORGANIZATION BUT AR E ONLY MEANS OR POWERS TO ACHIEVE THE OBJECTS CONTAINED IN THE MEMORANDUM OF ASSOCIATION. IN THIS CONTEXT, A REFERENCE HAS BEEN MADE TO THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DECCAN GYMKHANA (OLDEST T RUST) VS. CIT, 262 ITR ITA NOS.1855 & 1856/PN/2012 459 (BOM) AND ALSO THE DECISION OF THE AHMEDABAD BE NCH OF THE TRIBUNAL IN THE CASE OF DIT (EXEMPTION) VS. N. H. KAPADIA EDUCA TION TRUST VIDE ITA NO.1321/AHD/2011 DATED 03.02.2012. RELIANCE HAS AL SO BEEN PLACED ON THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRY, 130 ITR 1 86 WHEREIN THE HONBLE SUPREME COURT HAS APPRECIATED THE DISTINCTI ON BETWEEN THE PURPOSE OF A TRUST AND THE POWERS CONFERRED UPON THE TRUS TEE AS INCIDENTAL TO CARRYING OUT THE PURPOSE. 27. ON THIS ASPECT, THE LEARNED CIT-DR HAS REFERRED TO THE ULTIMATE CONCLUSION OF THE COMMISSIONER TO THE EFFECT THAT T HE FOCUS OF ASSESSEE ASSOCIATION HAS BECOME COMMERCIAL AND PROFIT ORIENT ED IN VIEW OF THE AFORESAID CHANGES IN ITS OBJECTS CLAUSE. 28. WE HAVE EXAMINED THE RIVAL STANDS ON THE ASPECT TO THE EFFECT OF THE AFORESAID CHANGES IN THE OBJECTS CLAUSE OF THE ASSE SSEE. THE ASSESSEE HAS BEEN REGISTERED U/S 12A OF THE ACT EARLIER ON THE B ASIS OF OBJECTS AND ACTIVITIES, WHICH WE HAVE SUCCINCTLY NARRATED IN EARLIER PART O F THIS ORDER. 29. THE PLEA OF THE REVENUE IS THAT THE ADDITION IN OBJECTS, BY INSERTION OF THE AFORESAID THREE CLAUSES RENDERS THE ASSESSEE UN FIT TO BE CONSIDERED AS A CHARITABLE INSTITUTION. SUB-CLAUSE (E) REFERRED ABOVE, RELATES TO ENABLING THE ASSESSEE TO ESTABLISH, BUILD, CONSTRUCT, OPERATE AN D MAINTAIN A STADIUM FOR CRICKET AND OTHER INFRASTRUCTURE FACILITY FOR PROMO TION OF CRICKET AND OTHER GAMES IN MAHARASHTRA. SIMILARLY, SUB-CLAUSE (G) ENABLES THE ASSESSEE TO PROCURE AN APPROPRIATE LAND FOR CONSTRUCTION OF STADIUM. SUB- CLAUSE (F) ENABLES THE ASSESSEE TO ESTABLISH A COMPANY UNDER SECTION 25 OF THE COMPANIES ACT, 1956 WITH THE OBJECTIVE OF PROMOTING, DEVELOPING AN D ENCOURAGING THE SPORT OF CRICKET OR ANY OTHER SPORT IN MAHARASHTRA. ITA NOS.1855 & 1856/PN/2012 30. EVEN A CURSORY PERUSAL OF THE AFORESAID NEW CLA USES INSERTED DO NOT DISTRACT FROM THE FACT THAT THE SAME ARE SUBSUMED I N THE ALREADY EXISTING OBJECTS OF THE ASSOCIATION, WHICH WE HAVE REPRODUCE D EARLIER IN PARA 4 OF THIS ORDER. 31. THEREFORE, HAVING REGARD TO THE FACT SITUATION, THE IMPORT OF THE NEWLY INSERTED CLAUSES IS NOT IN CONTRAVENTION OF ASSESSE ES PRIMARY OBJECT OF PROMOTING, DEVELOPING AND CONTROLLING THE GAME OF C RICKET IN THE SPECIFIED TERRITORY OF MAHARASHTRA. IN THIS CONTEXT, WE ALSO FIND FORCE IN THE PLEA OF THE ASSESSEE, BASED ON THE JUDGEMENT OF THE HONBLE BOM BAY HIGH COURT IN THE CASE OF DECCAN GYMKHANA (OLDEST TRUST) (SUPRA) TO T HE EFFECT THAT IT WOULD BE INAPPROPRIATE TO CONSTRUE THE AFORESAID INSERTIONS AS NEW OBJECTS OF THE ASSESSEE ASSOCIATION. CLEARLY, THE AFORESAID THREE INSERTIONS IN THE OBJECTS CLAUSE, ONLY SEEK TO PROVIDE ENABLING POWERS TO THE MANAGING COMMITTEE OF THE ASSOCIATION TO ACCOMPLISH ITS OBJECTS. THEREFO RE, EVEN IF, ONE IS TO CONSIDER THE ADDITIONAL OBJECTS, IT DOES NOT SIGNIF Y THAT THE REGISTRATION GRANTED TO THE ASSESSEE ORIGINALLY U/S 12A OF THE ACT ON 09 .12.1991 IS RENDERED NUGATORY. 32. AT THE TIME OF HEARING, ASSESSEE ALSO CONTENDED THAT THE FACTS IN THE PRESENT CASE ARE QUITE DISTINCT FROM THOSE IN THE C ASE OF BCCI (SUPRA) AND THEREFORE THE OBSERVATIONS OF THE MUMBAI BENCH OF T HE TRIBUNAL HAVE TO BE UNDERSTOOD IN THAT CONTEXT. ACCORDING TO THE ASSES SEE THE AMENDMENTS MADE TO THE MEMORANDUM OF ASSOCIATION OF THE BCCI WERE S UBSTANTIVE AS NOTED BY THE TRIBUNAL. THE CHANGES NOTED IN THE BCCI (SUPRA ) INCLUDED AMENDMENT TO RULES AND REGULATIONS IN ORDER TO PROMOTE COMMERCIA L INTERESTS TOWARDS ADMINISTRATION OF IPL CHAMPIONSHIP LEAGUE, ETC., WH ICH OBVIOUSLY IS NOT A SITUATION IN THE PRESENT CASE. IN THE PRESENT CASE , THE LEARNED COUNSEL SPECIFICALLY SUBMITTED THAT IN THE PERIOD UNDER REV IEW ASSESSEE HAS NOT ORGANIZED ANY IPL MATCHES. WE HAVE CONSIDERED THE DISTINCTION BROUGHT OUT ITA NOS.1855 & 1856/PN/2012 BY THE APPELLANT AND FOUND FORCE IN THE SAME. THE AMENDMENTS WHICH HAVE TAKEN PLACE IN THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE HAS BEEN ADVERTED TO BY US IN THE EARLIER PARAS. A PERUSAL OF THE SAME DOES NOT SHOW THAT ANY FUNDAMENTAL CHANGE HAS TAKEN PLACE IN THE OBJECTS UNDERTAKEN BY THE ASSESSEE. THEREFORE, FACTUALLY SPEAKING, THE OBSER VATIONS OF THE TRIBUNAL IN THE CASE OF BCCI (SUPRA) ARE NOT ATTRACTED IN THE P RESENT CASE. 33. IN VIEW OF THE AFORESAID DISCUSSION, WE SET-ASI DE THE ORDER OF THE COMMISSIONER AND RESTORE THE REGISTRATION GRANTED T O THE ASSESSEE U/S 12A OF THE ACT DATED 09.12.1991. 34. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A N.1856/PN/2012 IS ALLOWED, AS ABOVE. 35. NOW, WE MAY TAKE-UP THE APPEAL OF THE ASSESSEE IN ITA NO.1855/PN/2012, WHICH IS DIRECTED AGAINST THE ORDE R OF THE COMMISSIONER DATED 30.07.2012 PASSED U/S 263 OF THE ACT PERTAINI NG TO ASSESSMENT YEAR 2009-10. 36. IN THIS APPEAL, THE PERTINENT GRIEVANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER WHEREBY THE A SSESSMENT ORDER DATED 30.12.2011 (SUPRA) HAS BEEN SET-ASIDE AND THE ASSES SING OFFICER HAS BEEN DIRECTED TO MAKE ASSESSMENT AFRESH IN ACCORDANCE WI TH LAW AFTER CONSIDERING THE ASPECTS RAISED BY THE COMMISSIONER IN THE IMPUG NED ORDER. 37. FOR ASSESSMENT YEAR 2009-10, ASSESSEE FILED A R ETURN OF INCOME ON 31.10.2009 DECLARING TAXABLE INCOME AT NIL AFTER CLAIMING EXEMPTION U/S 11 OF THE ACT. THE RETURN OF INCOME FILED BY THE ASSESSE E WAS SUBJECT TO SCRUTINY ASSESSMENT WHEREIN THE ASSESSING OFFICER PASSED AN ORDER U/S 143(3) OF THE ACT DATED 30.12.2011 ACCEPTING THE REPORTED INCOME AT NIL. SUBSEQUENTLY, ITA NOS.1855 & 1856/PN/2012 THE COMMISSIONER INVOKED HIS REVISIONARY POWER CONT AINED IN SECTION 263 OF THE ACT AND ISSUED A SHOW-CAUSE NOTICE DATED 18.06. 2012 REQUIRING THE ASSESSEE TO SHOW-CAUSE AS TO WHY THE ASSESSMENT ORD ER DATED 30.12.2011 (SUPRA) BE NOT CONSIDERED ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE WITHIN THE MEANING OF SECT ION 263 OF THE ACT. IN THE SAID SHOW-CAUSE, THE COMMISSIONER STATED THAT THE F OLLOWING ISSUES REMAINED TO BE CONSIDERED BY THE ASSESSING OFFICER WHILE PAS SING THE ASSESSMENT ORDER:- (I) THE ASSESSING OFFICER HAS ACCEPTED YOUR CLAIM OF SUBSIDY OF RS.21,04,23,032/- RECEIVED ON ACCOUNT OF SHARE IN T .V. RIGHTS, CLAIMED TO HAVE BEEN RECEIVED FROM BCCI, AS VOLUNTARY CONTRIBUTIONS BY TREATING IT AS INDIRECT RECEIPTS, OUTSIDE THE PURVIEW OF THE AMENDED PROVIS IONS OF SECTION 2(15) OF THE INCOME-TAX ACT, 1961. BEFORE ACCEPTING SUCH A CLAI M, THE ASSESSING OFFICER HAS NOT ENQUIRED INTO WITH THE BCCI, AS TO THE PURP OSE AND BASIS ON WHICH THE SHARE OF T.V. RIGHTS WAS GIVEN. (II) THE ASSESSING OFFICER HAS ACCEPTED THE ABOVE M ENTIONED CLAIM WITHOUT EXAMINING THE NATURE OF SUCH RECEIPTS, AS T O WHETHER THESE RECEIPTS CONSTITUTED AN ELEMENT OF TRADE, COMMERCE OR BUSINE SS ETC. (III) IN YOUR CASE DURING THE COURSE OF ASSESSMENT PROCEEDINGS YOU HAVE SUBMITTED OBJECTS OF THE SOCIETY CONSTITUTED ON 29. 10.2004, WHEREAS THE REGISTRATION U/S 12A WAS GRANTED TO YOUR CONCERN IN THE YEAR 1991. THE ASSESSING OFFICER HAS FAILED TO EXAMINE AS TO WHETH ER THERE WAS ANY CHANGE IN THE OBJECTS AND STRUCTURE OF THE ASSESSEE AND IF SO, WHETHER SUCH CHANGE HAS ANY DIRECT BEARING ON TAXABILITY OF INCOME OF T HE TRUST. 38. PERTINENTLY, THE COMMISSIONER, AFTER EXAMINING THE RECORD OF PROCEEDINGS, WAS OF THE VIEW THAT THE ASSESSING OFF ICER HAD FAILED TO EXAMINE TWO ISSUES, NAMELY, NATURE OF RECEIPTS OF RS.21,04, 23,032/- BEING T.V. SUBSIDY RECEIVED FROM BCCI IN THE CONTEXT OF THE AMENDED DE FINITION OF CHARITABLE PURPOSE IN SECTION 2(15) OF THE ACT; AND SECONDLY, THAT WHETHER THERE WAS ANY CHANGE OF THE OBJECTS/STRUCTURE OF THE ASSESSEE AND IF SO WHETHER SUCH CHANGES HAD ANY DIRECT BEARING ON THE TAXABILITY OF ASSESSEES INCOME. IN SUM AND SUBSTANCE, THE CHARGE MADE BY THE COMMISSIO NER IS THAT THE ASSESSING OFFICER FAILED TO ENQUIRE INTO THE APPLIC ABILITY OF THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT WITH RESPECT TO THE (I) T.V. SUBSIDY RECEIVED FROM BCCI; AND, (II) CHANGE IN THE OBJECTS OF THE ASSESSEE TRUST ITA NOS.1855 & 1856/PN/2012 SUBSEQUENT TO REGISTRATION U/S 12A OF THE ACT GRANT ED IN 1991. THE FAILURE TO MAKE THE AFORESAID ENQUIRIES, ACCORDING TO THE COMM ISSIONER, SHOWED THAT THE ASSESSING OFFICER FINALIZED THE ASSESSMENT DATED 30 .12.2011 (SUPRA) WITHOUT APPLICATION OF MIND. 39. THE LEARNED CIT-DR APPEARING BEFORE US, SUPPORT ED THE CHARGE MADE BY THE COMMISSIONER THAT THE ASSESSMENT ORDER HAS B EEN FINALIZED WITHOUT APPLICATION OF MIND. IT HAS BEEN CANVASSED THAT TH E NON-APPLICATION OF MIND IS ALSO REFLECTED BY THE FACT THAT THE ASSESSMENT WAS FINALIZED WITHOUT MAKING PROPER ENQUIRIES. IN THIS CONTEXT, IT HAS ALSO BEE N SUBMITTED THAT NECESSARY ENQUIRIES WERE REQUIRED TO BE MADE AND A FAILURE TO MAKE PROPER ENQUIRIES WOULD RENDER AN ASSESSMENT ORDER AS ERRONEOUS AND P REJUDICIAL TO THE INTERESTS OF THE REVENUE WITHIN THE MEANING OF SECT ION 263 OF THE ACT. IN THIS CONTEXT, RELIANCE HAS BEEN PLACED ON THE FOLLOWING JUDGEMENTS :- (I) MALABAR INDUSTRIAL CO. LTD. VS. CIT, (2000) 2 43 ITR 83 (SC); (II) CIT VS. HINDUSTAN LEVER LTD., (2012) 343 ITR 161 (BOM); (III) RAMPYARI DEVI SARAOGI VS. CIT, 67 ITR 84 (SC ); AND, (IV) GEE VEE ENTERPRISES VS. ADDL.CIT, 99 ITR 375 (DEL). 40. HOWEVER, BEFORE THE COMMISSIONER AS WELL AS BEF ORE US, IT HAS BEEN VEHEMENTLY CANVASSED BY THE ASSESSEE THAT THE ASSES SING OFFICER HAD DULY APPLIED HIS MIND TO THE ISSUES SOUGHT TO BE RAISED BY THE COMMISSIONER IN THE IMPUGNED ORDER. BEFORE THE COMMISSIONER, IT WAS CO NTENDED THAT AS REGARDS THE APPLICABILITY OF THE AMENDED PROVISIONS OF SECT ION 2(15) OF THE ACT VIS--VIS THE SUBSIDY RECEIVED FROM BCCI, ASSESSEE HAD FURNIS HED AN EXPLANATION IN THE COURSE OF ASSESSMENT PROCEEDINGS AND BASED ON SUCH EXPLANATION THE ASSESSING OFFICER HAD FINALIZED THE ASSESSMENT. SE CONDLY, WITH REGARD TO THE CHANGE IN OBJECTS, THE POSITION CANVASSED BY THE AS SESSEE WAS THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, ALL THE OBJECTS ( INCLUDING THE SO-CALLED CHANGE OBJECTS) WERE BEFORE THE ASSESSING OFFICER A ND HE HAD DULY APPLIED HIS ITA NOS.1855 & 1856/PN/2012 MIND ON THE SAME. IN-FACT, THE ASSESSEE TOOK THE S TAND THAT THE SO-CALLED CHANGES IN THE OBJECTS CLAUSE WERE NOT REALLY A CH ANGE IN OBJECTS BUT SUCH CHANGES MERELY FACILITATED GRANTING OF CERTAIN POWE RS IN FURTHERANCE OF THE EARLIER OBJECTS EXISTING AT THE TIME OF REGISTRATIO N IN 1991. ASSESSEE ALSO DENIED ANY CHANGE IN ITS STRUCTURE AND IT WAS SUBMI TTED THAT THE SO-CALLED CHANGES WERE ONLY A TOOL TO ACHIEVE THE ORIGINALLY APPROVED OBJECTS. BEFORE THE COMMISSIONER AS WELL AS BEFORE US, IT HAS BEEN SUBMITTED THAT THE ASSESSING OFFICER HAD RAISED CERTAIN ISSUES IN THE CONTEXT OF THE CHANGED OBJECTS ALSO AND AFTER HAVING GONE THROUGH THE EXPL ANATION FURNISHED BY THE ASSESSEE, HE HAD ACCEPTED THE POSITION THAT SUCH CH ANGES DID NOT HAVE ANY BEARING ON THE TAXABILITY OF ASSESSEES INCOME. 41. AS PER THE COMMISSIONER, THE ASSESSING OFFICER OUGHT TO HAVE EXAMINED THE NATURE OF SUBSIDY RECEIVED FROM BCCI B ECAUSE ACCORDING TO THE COMMISSIONER THE DECISION OF THE MUMBAI BENCH OF TH E TRIBUNAL IN THE CASE OF BCCI VS. ITO VIDE ITA NO.1285/MUM/2010 DATED 30.03. 2012 HELD THAT BCCI COULD NOT CLAIM AUTOMATICALLY THE BENEFITS OF SECTI ON 12A OF THE ACT REGISTRATION WITH AMENDMENTS HAVING BEEN CARRIED OUT IN ITS OBJE CTS CLAUSE. AS PER THE COMMISSIONER, ANY RECEIPT OR CONSIDERATION FLOWING UNCTUOUSLY FR OM BCCI HAS TO BE HELD TO BE INELIGIBLE FOR EXEMPTION UNDER SECTIONS 11 TO 13 OF THE ACT . SECONDLY, AS PER THE COMMISSIONER CONSEQUENT TO THE CHANGE IN OBJECTS OF THE ASSESSEE SOCIETY AFTER THE GRANT OF REGISTRATION U/S 12A OF THE ACT, BENEFITS UNDER SECTIONS 11 TO 13 OF THE ACT CO ULD NOT BE AUTOMATICALLY CLAIMED UNLESS SUCH CHANGES ARE VETTED BY THE TAX A UTHORITIES. ACCORDING TO HIM, THE ASSESSING OFFICER FAILED TO CARRY OUT ANY INVESTIGATION WHATSOEVER WITH REGARD TO THE CHANGED OBJECTS, AND WHETHER SUC H CHANGES HAD BEEN VETTED BY THE CIT OR WHETHER THEY HAD ANY BEARING O N THEIR TAXABILITY OR OTHERWISE AND THEREFORE THE ASSESSMENT ORDER DATED 30.12.201 1 (SUPRA) WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE ACT. CONSEQUENTLY, H E SET-ASIDE THE ITA NOS.1855 & 1856/PN/2012 ASSESSMENT ORDER DATED 30.12.2011 (SUPRA) AND DIREC TED THE ASSESSING OFFICER TO MAKE AN ASSESSMENT AFRESH AFTER CONSIDER ING THE AFORESAID ASPECTS, IN ACCORDANCE WITH LAW. 42. BEFORE US, THE FIRST AND FOREMOST POINT RAISED BY THE APPELLANT IS THAT NECESSARY ENQUIRIES WERE MADE BY THE ASSESSING OFFI CER DURING THE ASSESSMENT PROCEEDINGS AND IN RESPONSE ASSESSEE HAD FURNISHED DETAILED SUBMISSIONS, AND THEREFORE, THE ASSESSMENT ORDER CO ULD NOT BE SAID TO BE PASSED WITHOUT APPLICATION OF MIND. THE LEARNED CI T-DR HAS DEFENDED THE ACTION OF THE COMMISSIONER AND IN-FACT, IN THE COUR SE OF HEARING, COPIES OF THE ORDER-SHEET ENTRIES IN THE ASSESSMENT FOLDER FOR TH E ASSESSMENT YEAR UNDER CONSIDERATION HAVE ALSO BEEN FURNISHED. IN THE COU RSE OF HEARING, IT WAS ALSO CANVASSED BY THE LEARNED CIT-DR THAT AN ASSESSMENT MADE WITHOUT ACTIVE AND CONSCIOUS EXAMINATION OF THE RELEVANT FACTS EVE N IN DEBATABLE ISSUES WOULD RENDER AN ASSESSMENT ERRONEOUS WITHIN THE MEA NING OF SECTION 263 OF THE ACT. RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS IN THIS CONTEXT :- (I) NINESTAR ENTERPRISES (P.) LTD. VS. ACIT, (2013 ) 30 TAXMANN.COM 57 (HYD); (II) SMT. SEEMA HEMANT SHIRALI VS. ITO, (2012) 141 TTJ 351 (PUNE); (III) RANKA JEWELLERS VS. ADDL.CIT, (2010) 36 SOT 1 1 (PUNE); (IV) AMBIKA AGRO SUPPLIERS VS. ITO, (2005) 95 ITD 3 26 (PUNE). 43. WITH RESPECT TO THE AFORESAID PRELIMINARY POINT RAISED BY THE ASSESSEE, IT WOULD BE APPROPRIATE TO REFER TO THE SCHEME OF S ECTION 263 OF THE ACT. SECTION 263 OF THE ACT EMPOWERS THE COMMISSIONER TO CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDINGS UNDER THE ACT, AND IF HE CONSIDERS ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER AS ERRONEOU S IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY , AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR C AUSING TO BE MADE SUCH ENQUIRIES AS HE MAY DEEM NECESSARY, PASS SUCH ORDER THEREON INCLUDING AN ITA NOS.1855 & 1856/PN/2012 ORDER ENHANCING OR MODIFYING THE ASSESSMENT OR CANC ELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THE AFORESAID PO WER HAS BEEN INVOKED BY THE COMMISSIONER IN THE PRESENT CASE, AS ACCORDING TO HIM, THE ASSESSMENT ORDER DATED 30.12.2011 (SUPRA) IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE WITHIN THE MEANING OF SECT ION 263 OF THE ACT QUA (I) FAILURE TO ENQUIRE INTO THE APPLICABILITY OF AMENDE D MEANING OF EXPRESSION CHARITABLE PURPOSE IN SECTION 2(15) OF THE ACT; A ND, (II) FAILURE TO TAKE COGNIZANCE OF CHANGE IN OBJECTS OF THE ASSESSEE SOC IETY AFTER THE GRANT OF REGISTRATION IN 1991, AND EXAMINE IF SUCH CHANGES H AD ANY BEARING ON THE TAXABILITY OF ASSESSEES INCOME. 44. THE PHRASEOLOGY OF SECTION 263 OF THE ACT MAKES IT CLEAR THAT THE COMPETENCE OF THE COMMISSIONER TO INVOKE THE REVISI ONARY JURISDICTION U/S 263 OF THE ACT IS FOUNDED ON SATISFACTION OF TWO CONDIT IONS, NAMELY, THAT (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND, (II) THAT SUCH ORDER IS PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES CO. LTD. (SUPRA) OPINED IN THE CONTEXT OF SECTION 263 OF THE ACT THAT EVEN AN INCO RRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW OR AN ASSESSMENT OR DER MADE WITHOUT APPLICATION OF MIND BY THE ASSESSING OFFICER IS LIA BLE TO BE CONSIDERED AS ERRONEOUS WITHIN THE MEANING OF SECTION 263 OF THE ACT. THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE IF HINDUSTAN LEVER LTD. (SUPRA) RELIED UPON BY THE LEARNED CIT-DR BEFORE US, IS ALSO AN AU THORITY FOR THE PROPOSITION THAT NON-APPLICATION OF MIND BY THE ASSESSING OFFIC ER IS A GROUND WHICH WOULD JUSTIFY INVOKING OF THE REVISIONARY JURISDICTION U/ S 263 OF THE ACT BY THE COMMISSIONER. IN VIEW OF THE AFORESAID JUDICIAL RU LINGS, THERE CANNOT BE A DISPUTE WITH THE PROPOSITION OF LAW BEING SETUP BY THE REVENUE TO THE EFFECT THAT AN ASSESSMENT ORDER PASSED WITHOUT APPLICATION OF MIND IS LIABLE TO BE REVISED BY THE COMMISSIONER IN TERMS OF SECTION 263 OF THE ACT. SO HOWEVER, IN ORDER TO EXAMINE THE EFFICACY OF SUCH CHARGE BEI NG MADE BY THE ITA NOS.1855 & 1856/PN/2012 COMMISSIONER IN THE PRESENT CASE QUA THE AFORESAID TWO ISSUES, ONE HAS TO EXAMINE THE RELEVANT RECORD. TO EXAMINE AS TO WHET HER OR NOT AN ASSESSMENT ORDER IS PASSED WITHOUT APPLICATION OF MIND, IT WOU LD BE RELEVANT NOT ONLY TO PERUSE THE ASSESSMENT ORDER ITSELF BUT ALSO THE ENT IRE ASSESSMENT RECORD. WE EMPHASIZE HEREIN AGAIN THAT THE ENTIRE ASSESSMENT R ECORD IS LIABLE TO BE EXAMINED BEFORE ARRIVING AT A CONCLUSION AS TO WHET HER OR NOT THE ASSESSING OFFICER HAS APPLIED HIS MIND ON AN ISSUE AND A MERE PERUSAL OF THE ASSESSMENT ORDER WOULD NOT SUFFICE. A GAINFUL REFE RENCE IN THIS CONTEXT CAN BE MADE TO THE JUDGEMENT OF THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF CIT VS. GABRIEL INDIA LIMITED, 203 ITR 108 (BOM) WHICH LAYS DOWN THAT AN ASSESSMENT ORDER COULD NOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE THERE IS ABSENCE OF AN ELABORATE DISCUSSION IN RESPECT OF A PARTICULAR POINT, IF THE RECORD OTHERWISE SHOWED THAT THE ASSESSING OFFICER HAD MADE ENQUIRIES WITH REGARD TO THE POINT RAISED BY THE COMMISSIONER AND THE ASSESSEE HAD MADE DETAILED EXPLANATIONS IN WRITING IN THE COURSE OF A SSESSMENT PROCEEDINGS. THE ENQUIRIES MADE BY THE ASSESSING OFFICER AS WELL AS THE REPLIES FURNISHED BY THE ASSESSEE WERE RECOGNIZED AS A PART OF RECORD OF THE PROCEEDINGS UNDER REVISION, THOUGH AN ELABORATE DISCUSSION IN THE ASS ESSMENT ORDER WAS NOT PRESENT. AS PER THE HONBLE BOMBAY HIGH COURT, UND ER AFORESAID CIRCUMSTANCES, ASSESSMENT ORDER COULD NOT BE HELD T O BE ERRONEOUS MERELY BECAUSE IT DID NOT CONTAIN AN ELABORATE DISCUSSION ON THE ISSUE RAISED BY THE COMMISSIONER. 45. IT WOULD ALSO BE RELEVANT AT THIS POINT TO REFE R TO THE JUDGEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HARI IRON TRADING CO. VS. CIT, (2003) 263 ITR 437 (P&H). THE HONBLE HIGH CO URT EMPHASIZED THE PHRASEOLOGY OF SECTION 263(1) OF THE ACT TO SAY THA T IT REQUIRED THE COMMISSIONER TO EXERCISE HIS POWER ONLY AFTER EXAMI NING THE RECORD OF ANY PROCEEDING UNDER THE ACT . NOTABLY, THE EXPRESSION RECORD IN SECTION 263( 1) OF THE ACT HAS BEEN DEFINED IN CLAUSE (B) OF THE EX PLANATION TO INCLUDE ALL ITA NOS.1855 & 1856/PN/2012 RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT A VAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER. IN THIS BACKGROUN D, THE HONBLE HIGH COURT OPINED THAT IT IS NOT ONLY THE ASSESSMENT ORDER BUT THE ENTIRE MATERIAL AVAILABLE ON RECORD WHICH HAS TO BE EXAMINED BEFORE ARRIVING AT A CONCLUSION AS TO WHETHER OR NOT THE ASSESSING OFFICER HAS EXAMINED A N ISSUE. THE HONBLE HIGH COURT EXPLAINED THAT THE AFORESAID EXERCISE WA S NECESSARY BECAUSE ASSESSEE HAS NO CONTROL OVER THE WAY AN ASSESSMENT ORDER IS DRAFTED AND THUS NON-MENTIONING OF AN ISSUE IN THE ASSESSMENT O RDER CANNOT BE CONCLUSIVE OF NON-APPLICATION OF MIND BY THE ASSESSING OFFICER . IN CONCLUSION, THEREFORE WE COME TO A PREMISE THAT A MERE PERUSAL OF THE ASS ESSMENT ORDER IS NOT SUFFICIENT TO CONCLUDE AS TO WHETHER OR NOT THE ASS ESSING OFFICER HAS APPLIED HIS MIND ON AN ISSUE UNDER REVISION; AND, RATHER TH E ENTIRE RECORD OUGHT TO BE EXAMINED IN THIS CONTEXT. 46. IN THE AFORESAID BACKGROUND, NOW, WE MAY EVALUA TE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, IN ORDER TO TEST THE EFFICACY OF THE CHARGE MADE BY THE COMMISSIONER THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND ON THE TWO ISSUES RAISED BY HIM. IN THIS CONTEXT, WE HAVE PERUSED THE ASSESSMENT ORDER DATED 30.12.2011 (SUPRA). IN THE ASSESSMENT ORDER IN PARA 2, THE ASSESSING OFFICER HAS DISCUSSED THE INCOME F ROM OTHER SOURCES OF RS.22,52,33,762/- SHOWN BY THE ASSESSEE IN ITS RETU RN OF INCOME. THE ASSESSING OFFICER FURTHER NOTES THAT SUCH SUM INCLU DED AN AMOUNT OF RS.21,04,23,032/- RECEIVED FROM BCCI ON ACCOUNT OF SHARE IN T.V. RIGHTS, TOURNAMENT RECEIPTS FROM BCCI OF RS.1,20,30,286/-, INTEREST ON FIXED DEPOSITS, SPONSORSHIP RECEIVABLE, ETC.. THEREAFTER, IN PARA 3 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER REFERS TO THE REGISTRATION AV AILABLE TO THE ASSESSEE U/S 12A OF THE ACT AND ITS CLAIM OF EXEMPTION U/S 11 MA DE IN THE RETURN OF INCOME FILED. THE ASSESSING OFFICER HAS ALSO MADE A REFER ENCE TO THE OBJECTS CLAUSE OF THE ASSESSEE. THEREAFTER IN PARA 4, HE HAS COMP UTED THE TOTAL INCOME ENUMERATING THE GROSS RECEIPTS AND AFTER REDUCING T HE APPLICATION OF INCOME ON ITA NOS.1855 & 1856/PN/2012 VARIOUS HEADS THE RESULTANT SURPLUS OF RS.43,28,24, 332/- HAS BEEN ACCEPTED AS EXEMPT. ACCORDINGLY, THE RETURN OF INCOME OF RS .NIL WAS ACCEPTED. 47. NOW, IF WE EXAMINE THE RECORD OF PROCEEDINGS BE FORE THE ASSESSING OFFICER, NAMELY, ORDER-SHEET ENTRIES OF THE ASSESSM ENT FOLDER, A COPY OF THE SAME HAS BEEN FURNISHED IN THE COURSE OF HEARING, T HE SAID RECORD REFLECTS HEARINGS HAVING TAKEN PLACE BEFORE THE ASSESSING OF FICER ON VARIOUS DATES STARTING FROM 30.06.2011 UPTO 19.12.2011. WE DEEM IT FIT AND PROPER TO REPRODUCE HEREINAFTER THE PROCEEDINGS RECORDED 03.1 0.2011 AND 05.12.2011, WHICH ARE AS UNDER :- 03.10.2011 IN CONTINUATION SHRI R.R. PETHE, CA & AR OF ASSESS EE ATTENDED AND FILED SUBMISSION DATED 03.10.2011. CASE DISCUSSED. HE IS REQUESTED TO FURNISH FOLLOWING INFORMATION/DOCUMENTS. - DETAILS OF ONE DAY TEST MATCHES, T-20 MATCHES, IP L MATCHES CONDUCTED DURING THE YEAR, WITH AMOUNT OF TICKET SA LES/GATE COLLECTION MADE. - GROUNDS OWNED BY MCA AND RENT RECEIVED FROM GROUN D, ROOMS, ETC. - AMOUNT OF FEES RECEIVED FOR PROVIDING ANY SERVICE S TO IPL FRANCHISEES, ETC.. - INCOME FROM GROUND ADVERTISEMENT, IF ANY, RECEIVE D DURING THE YEAR. - DETAILS OF SUBSIDY RECEIVED FROM BCCI OF RS.21 CR ORE WITH PURPOSE OF SUBSIDY AND ALSO A NOTE AS TO WHY RECEIP TS FROM BCCI SHOULD NOT BE TAXED IN VIEW OF AMENDMENT TO SE C. 2(15). - INCOME FROM ANY ADVERTISEMENT FROM LOGOS ON UNIFO RMS & KIT MATERIALS OF RANJI TROPHY, ETC.. - INCOME FROM CORPORATE BOXES BOOKS FOR VIEWING CRI CKET MATCHES, IF ANY. - DETAILS OF CLUB ACTIVITIES WITH MEMBERSHIP FEES, MEMBERSHIP CONTRIBUTION, RESTAURANT INCOME, INCOME FROM BANQUE T HALL, SPORTS FACILITIES PROVIDED DURING THE YEAR. - DETAILS OF MPL TOURNAMENT AND INCOME EARNED THERE FROM WITH COPY OF MPL AGREEMENT. THE ABOVE INFORMATION TO BE FURNISHED WITHIN THRE E WEEKS. SD/- SD/- R.R. PETHE, CA & AR ITO 05.12.2011 ITA NOS.1855 & 1856/PN/2012 IN CONTINUATION SHRI R.R. PETHE, CA & AR OF ASSESS EE ATTENDED AND FILED SUBMISSIONS DATED 05.11.2011. CASE DISCUSSED . HE IS REQUESTED TO FURNISH FOLLOWING INFORMATION/DOCUMENTS BY 05.12.20 11. (I) NATURE/NOTE ON TOURNAMENT RECEIPTS OF 1.20 CROR E AS TO WHY IT SHOULD NOT BE TAXED CONSIDERING AMENDMENT TO SEC. 2 (15). (II) DETAILS OF EXP. ON OBJECT OF RS.7.99 CRORE & E XP. ON 30.19 CRORE. (III) NOTE ON TDS PAYMENTS/APPLICABILITY. (IV) NOTE ON AMT. OF RS.2,80,000 RECEIVABLE FROM SI T-TECH. SD/- SD/- R.R. PETHE, CA & AR ITO 48. THE PERTINENT POINT TO BE NOTED IS THAT ON 03.1 0.2011, THE ASSESSING OFFICER SPECIFICALLY REQUIRED THE ASSESSEE TO EXPLA IN THE SUBSIDY RECEIVED FROM BCCI OF RS.21 CRORES ALONGWITH ITS PURPOSE AND THE ASSESSEE WAS ALSO REQUIRED TO EXPLAIN AS TO WHY THE SAME MAY NOT BY T AXED IN VIEW OF THE AMENDED SECTION 2(15) OF THE ACT. IN THE COURSE OF HEARING BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT REPLY TO SUCH QUERIE S WERE FURNISHED IN WRITING BEFORE THE ASSESSING OFFICER ON 05.12.2011, COPY OF WHICH HAS BEEN PLACED AT PAGES 126-141 IN THE PAPER BOOK. FURTHER, AT PAGES 124-125 IS ALSO PLACED A COPY OF THE WRITTEN REPLY FURNISHED TO THE ASSESSIN G OFFICER ON 20.10.2011 ON THIS ASPECT. WE HAVE PERUSED THE REPLIES FURNISHED BY THE ASSESSEE AND IN SUCH REPLIES THE NATURE OF SUBSIDY RECEIVED ON THE SHARE T.V. RIGHTS FROM BCCI HAS BEEN ADDRESSED. THE ASSESSEE HAS ALSO EXPLAINE D THAT SUCH ACTIVITIES CANNOT BE SAID TO BE COMMERCIAL ACTIVITIES. BE THA T AS IT MAY, AT THE PRESENT STAGE, WE ARE NOT EXAMINING THE MERITS OF THE ISSUE BUT WE ARE ONLY TRYING TO DETERMINE AS TO WHETHER OR NOT THE ASSESSMENT HAS B EEN FRAMED WITHOUT APPLICATION OF MIND BY THE ASSESSING OFFICER ON THE ISSUE OF APPLICATION OF AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT VIS- -VIS THE SUBSIDY BY WAY OF SHARE IN T.V. RIGHTS RECEIVED FROM BCCI OF RS.21,04 ,23,032/-. THE AFORESAID MATERIAL, NAMELY, QUERIES RAISED BY THE ASSESSING O FFICER DURING THE ASSESSMENT PROCEEDING AND THE DETAILED EXPLANATIONS FURNISHED BY THE ASSESSEE IN WRITING IN THE COURSE OF ASSESSMENT PRO CEEDINGS CLEARLY POINT OUT THAT THE ASSESSING OFFICER DID MAKE ENQUIRIES WITH REGARD TO THE POINT SOUGHT ITA NOS.1855 & 1856/PN/2012 TO BE RAISED BY THE COMMISSIONER AND REPLIES WERE F URNISHED BY THE ASSESSEE BEFORE HIM. THEREFORE, IN THIS FACTUAL BACKGROUND, WE ARE UNABLE TO CONVINCE OURSELVES THAT THE ASSESSMENT ORDER HAS BEEN MADE W ITHOUT APPLICATION OF MIND WITH RESPECT TO THE APPLICATION OF AMENDED PRO VISIONS OF SECTION 2(15) OF THE ACT VIS--VIS SUBSIDY BY WAY OF SHARE IN T.V. R IGHTS RECEIVED FROM BCCI OF RS.21,04,23,032/-. BEFORE PARTING, WE MAY ALSO REF ER TO A OFFICE NOTE APPENDED BELOW THE ASSESSMENT ORDER DATED 30.12.201 1 (SUPRA), WHICH HAS BEEN PLACED ON RECORD. THE SAID OFFICE NOTE READS AS UNDER :- OFFICE NOTE :- 1. THE CASE WAS STUDIED FROM POINT OF VIEW OF AMEND ED PROVISIONS OF SECTION 2(15) W.E.F. 01.04.2009 I.E. FROM THIS YEAR ONWARDS. TOTAL RECEIPTS OF THE ASSESSEE DURING THE YEAR ARE RS.22, 52,33,762/-. IT IS SEEN THAT RECEIPTS DURING THE YEAR ARE MAINLY ON AC COUNT OF SUBSIDY FOR SHARES IN TV RIGHTS FROM BCCI OF RS.21,04,23,032/-. SINCE IT IS NOT A DIRECT RECEIPT OF MCA, IT IS NOT HIT BY THE AMENDED PROVISIONS OF SECTION 2(15). FURTHER, TOURNAMENT RECEIPTS OF RS.1,20,30,2 86/- ARE ALSO RECEIVED FROM BCCI FOR VARIOUS TOURNAMENTS CONDUCTE D ON BEHALF OF BCCI SUCH AS RANJI TROPHY, C.K.NAYADU TROPHY, COOCH BEHAR TROPHY, DEODHAR TROPHY, DULEEP TROPHY, VIJAY MERCHANT TROPH Y, VINOO MANKAD TROPHY AND VARIOUS OTHER TOURNAMENTS FOR DIFFERENT AGE GROUPS FROM U/13 TO U/19 FOR MEN AND WOMEN. 2. BESIDES ABOVE, ASSESSEE HAS RECEIVED INTEREST ON FIXED DEPOSITS OF RS.14,67,257/-, INTEREST ON SAVING BANK A/C OF RS.8 ,83,707/-, SPONSORSHIP RECEIVABLE FROM SILTECH OF RS.2,80,000/ -, ANNUAL AFFILIATION FEES OF RS.1,18,000/-, MISC. RECEIPTS OF RS.31,480/ -. RECEIPTS OTHER THAN INTEREST AND AMOUNTS RECEIVED FROM BCCI ARE BE LOW RS. TEN LAKH, IN VIEW OF SECOND PROVISO TO SECTION 2(15). 3. WITH THE ADVENT OF T 20 TOURNAMENTS, CRICKET ASS OCIATIONS HAVE COME IN TO LIMELIGHT AND CRITICISM FOR EXEMPTION U/S 11 FOR TRUST. ASSESSEE'S CASE WAS ALSO STUDIED FROM THIS ANGLE. HOWEVER, DURING T HE YEAR THERE ARE NO SUCH TOURNAMENTS CONDUCTED BY THE ASSESSEE. FURTHER , ASSESSEE HAS ENTERED INTO AGREEMENT WITH SAKAL PAPERS LTD TO CON DUCT STATE LEVEL CRICKET TOURNAMENTS TO BE KNOWN AS 'MAHARASHTRA PRE MIER LEAGUE' I.E. MPL, VIDE JOINT VENTURE AGREEMENT DATED 24 TH APRIL 2009 FOR THE TERM COMMENCING FROM 1 ST APRIL 2009 I.E. APPLICABLE FROM AY 2010-11 ONWARDS (NOT THIS YEAR). COPY OF AGREEMENT IS OBTAI NED FROM THE ASSESSEE AND PLACED ON RECORDS. SO AMENDED PROVISIO NS OF SECTION 2(15) WOULD BE REQUIRED TO BE PUT TO TEST FROM AY 2 010-11 ONWARDS. SD/- INCOME-TAX OFFICER, WARD 11(1), PUNE. 49. THE OFFICE NOTE NO.1 ABOVE, CLEARLY ESTABLISHES THAT THE ASSESSING OFFICER MADE AN ACTIVE AND CONSCIOUS EXAMINATION OF THE FACTS RELATING TO ITA NOS.1855 & 1856/PN/2012 SUBSIDY BY WAY OF SHARE IN T.V. RIGHTS RECEIVED FRO M BCCI OF RS.21,04,23,032/- EVEN IN TERMS OF THE AMENDED PROV ISIONS OF SECTION 2(15) OF THE ACT. THEREFORE, WE ARE UNABLE TO ACQUIESCE TO THE PLEA OF THE LEARNED CIT- DR BEFORE US THAT THE ASSESSMENT HAS BEEN FINALIZED WITHOUT ACTIVE AND CONSCIOUS EXAMINATION OF THE ISSUES RAISED BY THE C OMMISSIONER. IN THIS VIEW OF THE MATTER, WE ARE UNABLE TO UPHOLD THE CHARGE M ADE BY THE COMMISSIONER THAT THE ASSESSING OFFICER ACCEPTED THE CLAIM OF TH E ASSESSEE FOR EXEMPTION U/S 11 OF THE ACT WITH RESPECT TO THE SUBSIDY BY WA Y OF SHARE IN T.V. RIGHTS RECEIVED FROM BCCI WITHOUT MAKING ENQUIRIES. 50. NOW, WE MAY TAKE UP THE SECOND ISSUE RAISED BY THE COMMISSIONER. IN THIS CONTEXT, THE COMMISSIONER WAS OF THE VIEW THAT THE ASSESSING OFFICER FAILED TO TAKE COGNIZANCE OF THE CHANGE IN THE OBJE CTS OF THE ASSESSEE AND ALSO THE CHANGE IN STRUCTURE SO AS TO EXAMINE THAT SUCH CHANGES HAD A BEARING ON THE TAXABILITY OF THE INCOME OF ASSESSEE . ON THIS ASPECT ALSO, WE FIND THAT THE QUERIES MADE BY THE ASSESSING OFFICER , WHICH WE HAVE REPRODUCED ABOVE AND THE EXPLANATIONS FURNISHED BY THE ASSESSEE THEREOF COPIES OF WHICH HAVE BEEN PLACED ON RECORD, BELIE T HE ASSERTIONS OF THE COMMISSIONER. IN-FACT, THE QUERIES RAISED BY THE A SSESSING OFFICER SHOW THAT HE HAD SHOW-CAUSED THE ASSESSEE AS TO WHY THE RECEI PTS ON ACCOUNT OF TOURNAMENTS, ETC. WERE NOT TO BE TAXED CONSIDERING THE AMENDMENTS TO SECTION 2(15) OF THE ACT. FURTHER, THE ASSESSING OFFICER M ADE ENQUIRIES WITH REGARD TO THE ONE DAY MATCHES, T-20 MATCHES, IPL CONDUCTED DU RING THE YEAR, AND ALSO RENT EARNINGS FROM THE GROUND OWNED BY THE ASSESSEE . IT HAS BEEN POINTED OUT THAT THE AFORESAID QUERIES ARE IN THE BACKGROUN D OF THE CHARGE SOUGHT TO BE MADE BY THE COMMISSIONER THAT THE CHANGE IN OBJE CT/STRUCTURE OF THE ASSESSEE REFLECTS CARRYING ON COMMERCIAL ACTIVITIES . 51. WE HAVE CAREFULLY EXAMINED THE ENTIRE FACTUAL M ATRIX ON THIS ASPECT AND FIND THAT IT IS DIFFICULT TO UPHOLD THE CHARGE MADE BY THE COMMISSIONER OF NON- ITA NOS.1855 & 1856/PN/2012 APPLICATION OF MIND BY THE ASSESSING OFFICER ON THI S ASPECT. IN-FACT, THE OFFICE NOTE NO.3 RECORDED BY THE ASSESSING OFFICER CLEARLY SHOWS THAT HE EXAMINED THE CASE OF THE ASSESSEE FOR GRANT OF EXEMPTION U/S 11 OF THE ACT IN THE CONTEXT OF THE ADVENT OF NEW CRICKETING TOURNAMENT, NAMELY, T-20 TOURNAMENT, ETC.. IT WAS FOUND BY HIM THAT NO SUCH TOURNAMENTS HAVE BEEN CONDUCTED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. BE T HAT AS IT MAY, A PERUSAL OF THE ENTIRE OFFICE NOTE REFLECTS THAT THE ASSESSING OFFICER WAS CONSCIOUS OF THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT AND HE NOT ONLY QUERIED THE ASSESSEE ON SUCH ASPECT BUT ALSO RECORDED HIS MIND ON THE SAME, ALBEIT IN THE OFFICE NOTE BELOW THE ASSESSMENT ORDER, THOUGH, IN OUR VIEW, IT WOULD HAVE BEEN APPROPRIATE FOR HIM TO PUT SUCH DISCUSSION IN THE BODY OF THE ASSESSMENT ORDER ITSELF. NEVERTHELESS, FOR THE PRESENT PURPOS E, WE HAVE CONSIDERED THE ENTIRE RECORD OF THE PROCEEDINGS AND WE ARE UNABLE TO UPHOLD THE CHARGE MADE BY THE COMMISSIONER THAT THE ASSESSMENT ORDER HAS BEEN MADE WITHOUT APPLICATION OF MIND BY THE ASSESSING OFFICER. THER EFORE, ON THE PRELIMINARY ISSUE ITSELF, WE SET-ASIDE THE ORDER OF THE COMMISS IONER AS BEING BEREFT OF THE REQUISITE CONDITIONS PRESCRIBED U/S 263(1) OF THE A CT. ACCORDINGLY, THE IMPUGNED ORDER OF THE COMMISSIONER IS SET-ASIDE AND THE ASSESSMENT ORDER DATED 30.12.2011 (SUPRA) IS RESTORED. 52. BEFORE PARTING, WE MAY REITERATE THAT WHAT WE H AVE EXAMINED IN THE AFORESAID PARAGRAPHS IS ONLY THE ASPECT AS TO WHETH ER OR NOT THE ASSESSING OFFICER HAS APPLIED HIS MIND ON THE ISSUES RAISED B Y THE COMMISSIONER IN THE CONTEXT OF THE REQUIREMENT OF SECTION 263 OF THE AC T. ANY OF OUR OBSERVATIONS IN THE ABOVE PARAGRAPHS, IS NOT TO BE CONSTRUED AS ANY REFLECTION ON THE MERITS OF THE POINTS WHICH HAVE BEEN RAISED BY THE COMMISS IONER. THE REVENUE SHALL BE AT LIBERTY TO CANVASS SUCH POINTS IN THE A SSESSMENT PROCEEDINGS, IF IT IS SO ADVISED IN LAW. 53. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ITA NOS.1855 & 1856/PN/2012 54. RESULTANTLY, BOTH THE CAPTIONED APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 28 TH AUGUST, 2014. SUJEET / GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-I, PUNE; 4) THE DR A BENCH, I.T.A.T., PUNE; 5) GUARD FILE. BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T., PUNE