Baroda Cricket Association, Vadodara V. The Dy. CIT, (Exemption), Circle-2, Ahmedabad

ITA 2675/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9482 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA A GARWAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business income; Charitable institution
• Section: 143(3); 234B; 27; 28; 10; 11

Judgement Text

ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR, VP AND MS. MADHUMITA ROY, JM] ITA NO. 2675/AHD/2017 ASSESSMENT YEAR: 2014-15 BARODA CRICKET ASSOCIATION ................ ..APPELLANT BCA HOUSE, 78, HARBHAKTI EXTENSION, RACE COURSE CIRCLE, VADODARA-390007 [PAN : AAAAB 1410 E] VS. DY. COMMISSIONER OF INCOME-TAX (EXEMPTIONS) ...........................RESPONDENT CIRCLE-2, AHMEDABAD APPEARANCES BY: SN SOPARKAR & PARIN SHAH, FOR THE APPELLANT APARNA AGARWAL, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 13.03.2019 DATE OF PRONOUNCING THE ORDER : 11.06.2019 O R D E R PER PRAMOD KUMAR, VICE PRESIDENT: 1. BY WAY OF THIS APPEAL, THE ASSESSEE-APPELLANT HA S CHALLENGED CORRECTNESS OF THE LEARNED CIT(A)S ORDER DATED 22 ND SEPTEMBER 2017 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961, F OR THE ASSESSMENT YEAR 2014-15. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) - 9, AHMEDABAD ['THE CIT(A)'] ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE-2, AHMEDABAD ['THE AO'] IN HOLDING THAT THE ACTIVITIES CARRIED OUT BY APPEL LANT ARE NOT IN THE NATURE OF 'CHARITABLE ACTIVITIES' AND THEREBY DISALLOWING EXE MPTION U/S 11 OF THE INCOME TAX ACT, 1961 ('THE ACT'). 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN TAXING THE NET SURPLUS OF RS. 40,33,47,248/- AS PER INCOME AND EXPENDITURE ACCOUNT AS INCOME OF THE APPELLANT. ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 2 OF 15 3. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN HOLDING THAT THE ACTIVITIES CARRIED O UT BY APPELLANT ARE IN THE NATURE OF TRADE, COMMERCE AND BUSINESS AND THEREFOR E COVERED BY THE PROVISO TO SECTION 2(15) OF THE ACT. 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN HOLDING THE ACTIVITIES OF PROMOTING T HE GAME OF CRICKET AS BUSINESS INCOME U/S. 28 WITHOUT ESTABLISHING THE SA ID ACTIVITIES ARE IN NATURE OF BUSINESS TRADE OR COMMERCE. 5. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN APPLYING THE PROVISO TO SECTION 2(15) R.W.S. 13(8) OF THE ACT AND THEREBY TAXING THE ENTIRE INCOME OF THE APPELLANT D ESPITE THE FACT THAT THE SAID PROVISO DID NOT APPLY TO THE APPELLANT. 6. WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN TAXING T HE ENTIRE INCOME OF THE APPELLANT AS BUSINESS INCOME DESPITE THE FACTS THAT THE RECEIPTS ON ACCOUNT OF SALES OF TICKETS, SPONSORSHIP INCOME ETC. DID NOT E XCEED THE STATUTORY LIMIT OF RS. 25,00,000 SPECIFIED IN SECOND PROVISO TO SECTIO N 2(15). 7. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN NOT ALLOWING BENEFIT OF SECTION 11(1) (A) OF THE ACT AND THEREBY TREATING AN AMOUNT OF RS. 1,47,98,329/- AS AN INCOM E OF THE APPELLANT. 8. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN NOT ALLOWING THE BENEFIT OF SECTION 1 1(2) OF THE ACT AND THEREBY TREATING AN AMOUNT OF RS.4,50,00,000/- AS THE INCOM E OF THE APPELLANT. 9. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN CHARGING INTEREST U/S. 234B OF THE AC T. 10. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE LEARNED AO IN INITIATING PENALTY PROCEEDINGS U/S 27 1(L)(C) OF THE ACT. 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE IS SUES IN APPEAL ARE COVERED, IN FAVOUR OF THE ASSESSEE, BY A DECISION OF THE COORDI NATE BENCH IN THE CASE OF GUJARAT CRICKET ASSOCIATION & ORS* (*INCLUDING BARODA CRICK ET ASSOCIATION) VS. JCIT [(2019) 101 TAXMANN.COM 45 (AHD)] WHEREIN IT WAS, INTER ALIA, OBSERVED AS FOLLOWS:- OUR ANALYSIS: 31. AS WE PROCEED TO DEAL WITH THE IMPACT OF INSERTION OF PROVISO TO SECTION 2(15), WE CONSIDER IT APPROPRIATE TO LOOK AT A COOR DINATE BENCH DECISION, IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST V. ITO [2015] 155 ITD 570/61 TAXMANN.COM 162 (ASR. - TRIB.) ], WHEREIN, SPEAKING THROUGH ONE OF US (I.E. THE VICE PRESIDENT), THE COORDINATE BENCH HAS, INTER AL IA, OBSERVED AS FOLLOWS: '14. BEFORE WE ADDRESS OURSELVES TO THE FACTS OF TH IS CASE, LET US ANALYSE THE RELEVANT LEGAL PROVISIONS. SECTION 2 (15), WHIC H DEFINES 'CHARITABLE PURPOSES' THOUGH IN AN INCLUSIVE RATHER THAN AN EXH AUSTIVE MANNER, HAD A ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 3 OF 15 RATHER QUIET EXISTENCE, UNAFFECTED BY THE FREQUENT AMENDMENTS TO THE INCOME TAX ACT 1961, TILL 1ST APRIL 1984. VIDE FINA NCE ACT, 2013, AND WITH EFFECT FROM 1ST APRIL 1984, THE WORDS 'NOT INVOLVIN G THE CARRYING ON ANY ACTIVITY FOR PROFIT' WERE DELETED FROM SECTION 2(15 ), AND, WITH THIS AMENDMENT, THIS DEFINITION WAS AS FOLLOWS: 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: 15. VIDE FINANCE ACT, 2008, THE WORDS 'PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PR ESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTO RIC INTEREST)', WERE ADDED AND, ON A MORE RELEVANT NOTE, A NEW PROVISO ( I.E. FIST PROVISO) WAS ADDED TO THIS PROVISION, CARVING OUT AN EXCEPTION I N THE CASES OF 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL UTILITY ', AND, BY THE IMMEDIATELY FOLLOWING FINANCE ACT 2009, THERE WAS Y ET ANOTHER PROVISO (I.E. SECOND PROVISO) INTRODUCED TO CARVE OUT AN EX CEPTION FROM THE EXCEPTION ITSELF. IN ESSENCE, THE EFFECT OF THESE P ROVISOS WAS THAT EVEN WHEN AN ASSESSEE WAS PURSUING 'A CHARITABLE PURPOSE ' IN THE EVENT OF ADVANCEMENT OF ANY OTHER OBJECT OF PUBLIC UTILITY' IT WOULD CEASE TO BE FOR CHARITABLE PURPOSES IF IT INVOLVES (A) CARRYING ON AN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS; OR (B) RENDERING ANY S ERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF NATURE OF USE OR APP LICATION OR RETENTION OF THE INCOME FROM SUCH ACTIVITY. HOWEVER, THESE PROVI SIONS ARE NOT TO APPLY WHEN THE ACTIVITIES ARE SUCH A MODEST SCALE THAT TH E VALUE OF RECEIPTS IN RESPECT OF THE SAME ARE LESS THAN RS 25 LAKHS. THES E TWO PROVISOS, AS THEY STAND NOW, ARE AS FOLLOWS: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUB LIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECT IVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SU CH ACTIVITY; PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGR EGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TWENTY FIVE LAKH RUPEES OR LESS IN THE PREVIOUS YEAR.' 16. EXPLAINING THE SCOPE OF THESE PROVISIONS, A COO RDINATE BENCH OF THIS TRIBUNAL, IN THE CASE OF HIMACHAL PRADESH ENVIRONME NT PROTECTION AND POLLUTION CONTROL BOARDV. CIT [(2010) 9 ITR TRIB 20 4 (CHANDIGARH)], HAS OBSERVED AS FOLLOWS: 13. IT IS ALSO IMPORTANT TO BEAR IN MIND THAT THE I NSERTION OF PROVISO TO S. 2(15) DOES NOT MEAN THAT IN CASE AN ASSESSEE IS TO RECEIVE ANY PAYMENT FOR ANYTHING DONE FOR TRADE, COMMERCE OR BUSINESS, THE ASSESSEE WILL BE HIT BY THE SAID PROVISO. IT MAY BE RECALLED THAT EL ABORATING THE SCOPE OF THIS AMENDMENT, CBDT, VIDE CIRCULAR NO. 11, DT. 19T H DEC., 2008 [(2009) 221 CTR (ST) 1], HAS OBSERVED AS FOLLOWS: ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 4 OF 15 '3. THE NEWLY AMENDED S. 2(15) WILL APPLY ONLY TO T HE ENTITIES WHOSE PURPOSE IS 'ADVANCEMENT OF ANY OTHER OBJECT OF GENE RAL PUBLIC UTILITY' I.E., THE FOURTH LIMB OF DEFINITION OF 'CHARITABLE PURPOS E' CONTAINED IN S. 2(15). HENCE, SUCH ENTITIES WILL NOT BE ELIGIBLE FOR EXEMP TION UNDER S. 11 OR UNDER S. 10(23C) OF THE ACT, IF THEY CARRY ON COMME RCIAL ACTIVITIES. WHETHER SUCH AN ENTITY IS CARRYING ON AN ACTIVITY I N THE NATURE OF TRADE, COMMERCE OR BUSINESS IS A QUESTION OF FACT WHICH WI LL BE DECIDED BASED ON THE NATURE, SCOPE, EXTENT AND FREQUENCY OF ACTIV ITY. 3.1 THERE ARE INDUSTRY AND TRADE ASSOCIATIONS WHO C LAIM EXEMPTION FROM TAX UNDER S. 11 OR ON THE GROUND THAT THEIR OBJECTS ARE FOR CHARITABLE PURPOSES AS THESE ARE COVERED UNDER THE 'ANY OTHER OBJECT OF PUBLIC UTILITY'. UNDER THE PRINCIPLE OF MUTUALITY, IF TRAD ING TAKES PLACE BETWEEN THE PERSONS WHO ARE ASSOCIATED TOGETHER AND CONTRIBUTE TO A COMMON FUND FOR THE FINANCING OF SOME VENTURE OR OBJECT, AND IN THIS RESPECT HAVE NO DEALINGS OR RELATIONS WITH ANY OUTSIDE BODY, THEN T HE SURPLUS RETURNED TO SUCH PERSONS IS NOT CHARGEABLE TO TAX. THEREFORE, W HERE INDUSTRY OR TRADE ASSOCIATIONS CLAIM BOTH TO BE CHARITABLE INSTITUTIO NS AS WELL AS MUTUAL MEMBERS, THESE WOULD NOT FALL UNDER THE PURVIEW OF S. 2(15) OWING TO THE PRINCIPLE OF MUTUALITY. HOWEVER, IF SUCH ORGANIZATI ONS HAVE DEALINGS WITH THE NON-MEMBERS, THEIR CLAIM FOR CHARITABLE INSTITU TION WOULD NOW BE GOVERNED BY THE ADDITIONAL CONDITIONS STIPULATED IN PROVISO TO S. 2(15). 3.2 IN THE FINAL ANALYSIS, WHETHER THE ASSESSEE HAS FOR ITS OBJECT 'THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY' IS A QUESTION OF FACT. IF SUCH ASSESSEE IS ENGAGED IN ANY ACTIVITY I N THE NATURE OF TRADE, COMMERCE OR BUSINESS OR RENDERS ANY SERVICE IN CONN ECTION TO TRADE, COMMERCE OR BUSINESS, IT WOULD NOT BE ENTITLED TO C LAIM THAT ITS OBJECT IS FOR CHARITABLE PURPOSES. IN SUCH A CASE, THE OBJECT OF 'GENERAL PUBLIC UTILI TY' WILL ONLY BE A MASK OR A DEVICE TO HIDE THE TRUE PURPOSE WHICH IS TRADE, COM MERCE, OR BUSINESS OR RENDERING OF ANY SERVICE IN RELATION TO TRADE, COMM ERCE OR BUSINESS. EACH CASE WOULD, THEREFORE, HAVE TO BE DECIDED ON ITS OW N FACTS, AND GENERALIZATIONS ARE NOT POSSIBLE. AN ASSESSEE WHO C LAIMS THAT THEIR OBJECT IS 'CHARITABLE PURPOSE' WITHIN THE MEANING OF S. 2( 15) WOULD BE WELL ADVISED TO ESCHEW ANY ACTIVITY WHICH IS IN THE NATU RE OF TRADE, COMMERCE OR BUSINESS OR RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS. 14. AS THE ABOVE CBDT CIRCULAR, WHICH IS BINDING ON THE CIT UNDER S. 119(1)(A) OF THE ACT, APTLY PUTS IT, WHETHER THE AS SESSEE HAS, AS ITS OBJECT, ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY IS ESSENTIALLY A QUESTION OF TO BE DECIDED ON THE FACTS OF THE ASSES SEE'S OWN CASE AND WHERE OBJECT OF GENERAL PUBLIC ACTIVITY IS ONLY A M ASK OR DEVICE TO HIDE THE TRUE PURPOSE OF TRADE, BUSINESS OR COMMERCE, OR REN DERING OF ANY SERVICE IN RELATION THERETO, THE ASSESSEE CANNOT BE SAID TO BE ENGAGED IN A CHARITABLE ACTIVITY WITHIN MEANINGS OF S. 2(15) OF THE ACT. AS A COROLLARY TO THIS APPROACH ADOPTED BY TAX ADMINISTRATION, IN OUR CONSIDERED VIEW, IT CANNOT BE OPEN TO LEARNED CIT TO CONTEND THAT WHERE AN OBJECT OF GENERAL PUBLIC UTILITY IS NOT MERELY A MASK TO HIDE TRUE PU RPOSE OR RENDERING OF ANY SERVICE IN RELATION THERETO, AND WHERE SUCH SERVICE S ARE BEING RENDERED ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 5 OF 15 AS PURELY INCIDENTAL TO OR AS SUBSERVIENT TO THE MA IN OBJECTIVE OF 'GENERAL PUBLIC UTILITY', THE CARRYING ON OF BONA FIDE ACTIV ITIES IN FURTHERANCE OF SUCH OBJECTIVES OF 'GENERAL PUBLIC UTILITY' WILL ALSO BE HIT BY THE PROVISO TO S. 2(15). 15. AS CBDT RIGHTLY PUTS IT, SWEEPING 'GENERALIZATI ONS ARE NOT POSSIBLE' AND 'EACH CASE WILL HAVE TO DECIDED ON ITS FACTS'. THE QUESTION THEN ARISES WHETHER ON THE PRESENT SET OF FACTS IT CAN BE SAID THAT THE ASSESSEE WAS ENGAGED IN TRADE, COMMERCE OR BUSINESS OR IN RENDER ING OF A SERVICE TO TRADE, COMMERCE OR BUSINESS. 17. THEREFORE, AS THE LEGAL POSITION STANDS AS ON N OW, EVEN AFTER THE INSERTION OF THE ABOVE TWO PROVISOS, AS LONG AS THE OBJECT OF GENERAL PUBLIC UTILITY IS NOT MERELY A MASK TO HIDE TRUE PU RPOSE OR RENDERING OF ANY SERVICE IN RELATION THERETO, AND WHERE SUCH SERVICE S ARE BEING RENDERED AS PURELY INCIDENTAL TO OR AS SUBSERVIENT TO THE MA IN OBJECTIVE OF 'GENERAL PUBLIC UTILITY', THE CARRYING ON OF BONAFIDE ACTIVI TIES IN FURTHERANCE OF SUCH OBJECTIVES OF 'GENERAL PUBLIC UTILITY' CANNOT BE HI T BY THE PROVISO TO S. 2(15). BY THE FINANCE ACT 2015, THESE TWO PROVISOS ALSO ST AND SUBSTITUTED, WITH EFFECT FROM 1ST APRIL 2016, A NEW PROVISO TO SECTIO N 2(15). THIS NEW PROVISO IS AS FOLLOWS: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUB LIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECT IVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SU CH ACTIVITY, UNLESS (I) SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY; AND (II) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR ACTIVI TI ES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT. OF THE TOTAL R ECEIPTS, OF THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR ACTIVITIES , OF THAT PREVIOUS YEAR 18. IT MAY BE NOTED THAT WHILE THE EARLIER PROVISO SIMPLY STATED THAT EXCLUSION FROM 'CHARITABLE PURPOSES' WILL COME INTO PLAY 'IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATIO N TO ANY TRADE, COMMERCE OR BUSINESS', THE REQUIREMENT OF EXCLUSION CLAUSE E XTENDS EVEN TO SITUATIONS 'IN WHICH SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJEC T OF GENERAL PUBLIC UTILITY'. IN OTHER WORDS, THE EXCLUSION CLAUSE, BY PROVISO TO SECTION 2 (15), WAS EARLIER TRIGGERED BY 'INVOLVEMENT IN ANY ACTIVI TY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS ETC' BUT, POST FINANCE ACT 201 5 AMENDMENT, IT WILL BE TRIGGERED EVEN IF 'SUCH AN ACTIVITY IN THE NATUR E OF TRADE, COMMERCE OR BUSINESS ETC IS UNDERTAKEN IN THE COURSE OF CARRYIN G OUT SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY'. 19. THIS SUBSTITUTION OF PROVISO TO SECTION 2(15), IN OUR CONSIDERED VIEW, MAY BE VIEWED AS REPRESENTING A PARADIGM SHIFT IN T HE SCOPE OF THE EXCLUSION CLAUSE. ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 6 OF 15 20. THE PARADIGM SHIFT IS THIS. SO FAR AS THE SCOPE OF EARLIER PROVISOS IS CONCERNED, THE CBDT ITSELF HAS, DEALING WITH AN ASS ESSEE PURSING 'THE ADVANCEMENT OF ANY OBJECT OF GENERAL PUBIC UTILITY' , OBSERVED THAT 'IF SUCH ASSESSEE IS ENGAGED IN ANY ACTIVITY IN THE NATURE O F TRADE, COMMERCE OR BUSINESS OR RENDERS ANY SERVICE IN CONNECTION TO TR ADE, COMMERCE OR BUSINESS, IT WOULD NOT BE ENTITLED TO CLAIM THAT IT S OBJECT IS FOR CHARITABLE PURPOSES' BECAUSE 'IN SUCH A CASE, THE OBJECT OF 'G ENERAL PUBLIC UTILITY' WILL ONLY BE A MASK OR A DEVICE TO HIDE THE TRUE PURPOSE WHICH IS TRADE, COMMERCE, OR BUSINESS OR RENDERING OF ANY SERVICE I N RELATION TO TRADE, COMMERCE OR BUSINESS.' THE ADVANCEMENT OF ANY OBJEC TS OF GENERAL PUBLIC UTILITY AND ENGAGEMENT IN TRADE, COMMERCE AN D BUSINESS ETC. WERE THUS SEEN AS MUTUALLY EXCLUSIVE IN THE SENSE THAT E ITHER THE ASSESSEE WAS PURSUING THE OBJECTS OF GENERAL PUBLIC UTILITY OR P URSUING TRADE, COMMERCE OR BUSINESS ETC. IN THE GARB OF PURSING THE OBJECTS OF GENERAL PUBLIC UTILITY. AS THE CBDT CIRCULAR ITSELF DEMONSTRATES, THERE COU LD NOT HAVE BEEN ANY SITUATION IN WHICH THE ASSESSEE WAS PURSING THE OBJ ECTS OF GENERAL PUBLIC UTILITY AS ALSO ENGAGED IN TRADE, COMMERCE OF BUSIN ESS ETC. IN THE NEW PROVISO, HOWEVER, EVEN WHEN THE ASSESSEE IS ENGAGED IN THE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS ETC. AND 'SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' IT IS E XCLUDED FROM THE SCOPE OF CHARITABLE PURPOSES ONLY WHEN 'THE AGGREGATE RECEIP TS FROM SUCH ACTIVITY OR ACTIVITIES DURING THE PREVIOUS YEAR, DO NOT EXCE ED TWENTY PER CENT OF THE TOTAL RECEIPTS, OF THE TRUST OR INSTITUTION UNDERTA KING SUCH ACTIVITY OR ACTIVITIES, OF THAT PREVIOUS YEAR'. IN OTHER WORDS, EVEN WHEN THE ACTIVITIES ARE IN THE COURSE OF ADVANCEMENT OF ANY OTHER OBJEC T OF GENERAL PUBLIC UTILITY, BUT IN THE NATURE OF TRADE, COMMERCE OR BU SINESS ETC, THE PROVISO SEEKS TO EXCLUDE IT ONLY WHEN THE THRESHOLD LEVEL O F ACTIVITY IS NOT SATISFIED. WHETHER SUCH A STATUTORY PROVISION STAND S THE LEGAL SCRUTINY OR NOT IS ANOTHER ASPECT OF THE MATTER, AND THAT IS NO NE OF OUR CONCERN AT PRESENT ANYWAY, IT IS BEYOND DOUBT THAT THE NEW PRO VISO, WITH EFFECT FROM 1ST APRIL 2016, SEEKS TO EXCLUDE, FROM THE SCOPE OF SECTION 2(15), THE SITUATIONS IN WHICH EVEN IN THE COURSE OF PURSUING ADVANCEMENT OF ANY OBJECTS OF GENERAL PUBLIC UTILITY WHEN ANY ACTIVITI ES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS ETC 'IS UNDERTAKEN IN THE COUR SE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENE RAL PUBLIC UTILITY', UNLESS, OF COURSE, THE ACTIVITY LEVEL REMAINS WITHI N THE THRESHOLD LIMIT I.E. RECEIPTS FROM SUCH ACTIVITIES ARE LESS THAN TWENTY PERCENT OF TOTAL RECEIPTS OF THAT YEAR. 21. AS THE ABOVE PROVISIONS, WHICH, IN OUR HUMBLE U NDERSTANDING, SEEKS TO RESTRICT THE SCOPE OF SECTION 2(15) IS EFFECTIVE FROM THE ASSESSMENT YEAR 2016-17, IN OUR CONSIDERED VIEW, THESE PROVISI ONS ARE ONLY PROSPECTIVE IN EFFECT. AS A COROLLARY TO THIS LEGAL POSITION, IN OUR CONSIDERED VIEW, EVEN IF THE ACTIVITIES IN THE NATU RE OF TRADE, COMMERCE OR BUSINESS ETC ARE UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF ADVANCEMENT OF ANY OBJECT OF GENERAL PUBLIC UTILITY , TILL THE END OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2016- 17, THE ACTIVITIES WILL CONTINUE TO BE COVERED BY THE SCOPE OF SECTION 2 (1 5). ' ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 7 OF 15 32. THE VIEWS SO EXPRESSED BY THE COORDINATE BENCH WER E APPROVED BY HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT (EXEMPTIONS) V. IMPROVEMENT TRUST MONGA [ITA NO. 14 7 OF 2016; TRIBUNE TRUST (SUPRA) WHEREIN THEIR LORDSHIPS HAVE, INTER A LIA, OBSERVED AS FOLLOWS: THE TRIBUNAL BY THE IMPUGNED ORDER HELD THAT TH E STAND OF THE AUTHORITIES WAS UNSUSTAINABLE AS EVEN ASSUMING THAT ALL THE ALLEGATIONS OF THE ASSESSING OFFICER WITH RESPECT TO THE PROFIT MO TIVE IN THE ACTIVITIES OF THE ASSESSEE ARE CORRECT, THE SAME WERE CARRIED OUT WITH THE LARGER AND PREDOMINANT OBJECTIVE OF GENERAL PUBLIC UTILITY. RE LYING UPON THE CBDT CIRCULAR THE TRIBUNAL OBSERVED THAT IT IS ONLY WHEN THE ASSESSING OFFICER FINDS THAT 'THE INCOME IS FROM ANY OTHER BUSINESS W HICH IS NOT INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST OR IN STITUTION', THAT SUCH AN INCOME WILL 'NOT BE EXEMPT FROM TAX'. THE TRIBUNAL NOTED THAT THERE IS NO FINDING TO THAT EFFECT BY ANY OF THE AUTHORITIES AN D THAT IT IS NOT EVEN THE CASE OF THE REVENUE THAT THE ACTIVITIES OF THE TRUS TS DO NOT SERVE THE OBJECTS OF THE GENERAL PUBLIC UTILITY. THE TRIBUNAL HELD THAT THE ACTIVITIES OF THE TRUST FALL WITHIN THE CATEGORY 'OBJECTS OF GENE RAL PUBLIC UTILITY'. IT WAS ALSO HELD THAT SEPARATE BOOKS OF ACCOUNT FOR THE BU SINESS ACTIVITIES WERE MAINTAINED. THIS WAS NOT CHALLENGED BEFORE US. IT I S NOT NECESSARY IN THESE APPEALS TO DECIDE THE EFFECT OF THE AMENDMENT TO SECTION 2(15) INTRODUCED WITH EFFECT FROM 01.04.2016. THE TRIBUNAL THEN DEALT WITH THE MAIN CONTENTION OF THE REVENUE THAT THE ASSESSEE WAS INVOLVED IN THE ACTIVITIES OF DEVELOPI NG AND SELLING THE RESIDENTIAL AND COMMERCIAL UNITS WITH THE SOLE AIM OF MAKING PROFITS. THE CONCLUSIONS OF THE TRIBUNAL IN THIS REGARD ARE AS F OLLOWS; THE PROFIT ON SALE DOES NOT NECESSARILY IMPLY PROFIT MOTIVE IN THE ACT IVITIES OF THE ASSESSEE. WHAT IS IMPORTANT IS THE MOTIVE OR THE PREDOMINANT OBJECT OF THE ACTIVITIES. THE BIDS ARE INVITED BY THE ASSESSEE WHO ALLOTS THE PLOTS TO THE HIGHEST BIDDERS. THIS, HOWEVER, IS BECAUSE IT IS NOT DESIRA BLE FOR THE STATE TO SUBSIDISE ITS BUSINESSES. A BIDDING PROCESS ENSURES TRANSPARENCY IN THE FUNCTIONING OF THE TRUSTS AND THEREFORE, IT DOES NO T MAKE THE BIDDING PROCESS A COMMERCIAL VENTURE. FURTHER THE BIDS ARE INVITED ONLY IN THE CONTEXT OF COMMERCIAL UNITS. UNDER THE RULES THERE IS A FORMULA ON THE BASIS OF WHICH THE PRICE IS WORKED OUT. THE REVENUE DID NOT DENY THE SAME BUT ALLEGED THAT THE PROFIT MOTIVE IS EMBEDDED IN THIS FORMULA AS SHOWN BY THE ADJUSTMENTS FOR VARIOUS CHARGES. 72. THE TRIBUNAL RIGHTLY REJECTED THE CONTENTION TH AT TO FALL WITHIN THE AMBIT OF THE WORDS 'ADVANCEMENT OF ANY OTHER OBJECT OF GE NERAL PUBLIC UTILITY' THE TRUST MUST NECESSARILY BE INVOLVED ONLY IN IMPL EMENTING POVERTY ALLEVIATION PROGRAMS OR DOING OTHER ACTS OF CHARITY . IT IS SUFFICIENT IF IT DOES PRECISELY WHAT THE LAST CATEGORY IN SECTION 2(15) S TATES NAMELY BEING INVOLVED IN ACTIVITIES FOR THE ADVANCEMENT OF AN OB JECT OF GENERAL PUBLIC UTILITY. THEY INCLUDE A PROPER SYSTEMATIC DEVELOPME NT OF CERTAIN AREAS. THESE ACTIVITIES ARE BY VIRTUE OF THE PTI ACT UNDER TAKEN BY THIS ASSESSEE. 73. THE TRIBUNAL ALSO RIGHTLY HELD THAT AN OBJECT O F GENERAL PUBLIC UTILITY DOES NOT NECESSARILY REQUIRE THE ACTIVITIES TO BE F UNDED OR SUBSIDIZED BY THE STATE. SO LONG AS THE OBJECTS FALL WITHIN THE A MBIT OF THE WORDS 'OBJECT OF GENERAL PUBLIC UTILITY', IT IS SUFFICIENT. THE A CHIEVEMENTS OF THOSE OBJECTS ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 8 OF 15 DO NOT HAVE TO BE AS A RESULT OF STATE FUNDING OR S TATE SUBSIDY. THE TRIBUNAL ACCORDINGLY RIGHTLY HELD THAT THE AUTHORIT IES WERE NOT JUSTIFIED IN DENYING THE BENEFIT OF SECTION 11 AND HOLDING THAT THE ASSESSEE WAS NOT COVERED BY THE WORDS 'ADVANCEMENT OF ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY' IN SECTION 2(15). THE TRIBUNAL, THEREFORE, RIGHTLY DIRECTED THE ASSESSING OFFICER TO DELETE DISALLOWANCE OF EXEMPTI ON. 33. ON A SIMILAR AND DETAILED NOTE, OUR JURISDICTIONAL HIGH COURT, IN THE CASE OF SABARMATI GAUSHALA TRUST (SUPRA), HAS OBSERVED A S FOLLOWS: 5. TERM 'CHARITABLE TRUST' IS DEFINED IN SECTION 2 (15) OF THE ACT WHICH INCLUDES THE RELIEF TO THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT; INCLUDING WATERSHEDS, FORESTS AND WILD LIFE AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTIONS OF ARTISTIC OR HISTORIC INTEREST AND ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. PROVISO TO SECTION 2 (15) AND FURTHER PROVISO WHEREOF INSERTED BY FINANCE ACT 2010 W.E.F 1ST APRIL 2009 READ, THUS 'PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECT IVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION OF THE INCOME FROM SUC H ACTIVITY. PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGR EGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TWENTY FIVE LAKH RUPEES OR LESS IN THE PREVIOUS YEAR.' 6. THE LEGAL CONTROVERSY IN THE PRESENT TAX APPEAL CENTERS AROUND THE FIRST PROVISO. IN THE PLAIN TERMS, THE PROVISO PROV IDES FOR EXCLUSION FROM THE MAIN OBJECT OF THE DEFINITION OF THE TERM 'CHARITAB LE PURPOSES' AND APPLIES ONLY TO CASES OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. IF THE CONDITIONS PROVIDED UNDER THE PROVISO ARE SA TISFIED, ANY ENTITY, EVEN IF INVOLVED IN ADVANCEMENT OF ANY OTHER OBJECT OF G ENERAL PUBLIC UTILITY BY VIRTUE TO PROVISO, WOULD BE EXCLUDED FROM THE DEFIN ITION OF 'CHARITABLE TRUST'. HOWEVER, FOR THE APPLICATION OF THE PROVISO , WHAT IS NECESSARY IS THAT THE ENTITY SHOULD BE INVOLVED IN CARRYING ON A CTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF REN DERING SERVICES IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION. IN SUCH A SITUATION, THE NATUR E, USE OR APPLICATION, OR RETENTION OF INCOME FROM SUCH ACTIVITIES WOULD NOT BE RELEVANT. UNDER THE CIRCUMSTANCES, THE IMPORTANT ELEMENTS OF APPLICATIO N OF PROVISO ARE THAT THE ENTITY SHOULD BE INVOLVED IN CARRYING ON THE AC TIVITIES OF ANY TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITIES OF RENDERING SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION. SUCH STATUTORY AMENDMENT WAS EXPLAIN ED BY THE FINANCE MINISTER'S SPEECH IN THE PARLIAMENT. RELEVANT PORTI ON OF WHICH READS AS UNDER : 'I ONCE AGAIN ASSURE THE HOUSE THAT GENUINE CHARITA BLE ORGANIZATIONS WILL NOT IN ANY WAY BE AFFECTED. THE CBDT WILL, FOLLOWIN G THE USUAL PRACTICE, ISSUE AN EXPLANATORY CIRCULAR CONTAINING GUIDELINES FOR DETERMINING ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 9 OF 15 WHETHER ANY ENTITY IS CARRYING ON ANY ACTIVITY IN T HE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS. WHETHER THE PUR POSE IS A CHARITABLE PURPOSE WILL DEPEND ON THE TOTALITY OF THE FACTS OF THE CASE. ORDINARILY, CHAMBERS OF COMMERCE AND SIMILAR ORGANIZATIONS REND ERING SERVICES TO THEIR MEMBERS WOULD NOT BE AFFECTED BY THE AMENDMEN T AND THEIR ACTIVITIES WOULD CONTINUE TO BE REGARDED AS 'ADVANC EMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY'.' 7. IN CONSONANCE WITH SUCH ASSURANCE GIVEN BY THE F INANCE MINISTER ON THE FLOOR OF THE HOUSE, CBDT ISSUED A CIRCULAR NO. 11 OF 2008 DATED 19TH DECEMBER 2008 EXPLAINING THE AMENDMENT AS UNDER : '3. THE NEWLY INSERTED PROVISO TO SECTION 2 (15) WI LL APPLY ONLY TO ENTITIES WHOSE PURPOSE IS ' ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' I.E., THE FOURTH LIMB OF THE DEFINITION OF ' CHARITABLE PURPOSE' CONTAINED IN SECTION 2 (15). HENCE, SUCH ENTITIES W ILL NOT BE ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OR UNDER SECTION 10 (23C ) OF THE ACT IF THEY CARRY ON COMMERCIAL ACTIVITIES. WHETHER SUCH AN ENT ITY IS CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS IS A QUESTION OF FACT WHICH WILL BE DECIDED BASED ON THE NATURE, SCOPE, E XTENT AND FREQUENCY OF THE ACTIVITY. 3.1 THERE ARE INDUSTRY AND TRADE ASSOCIATIONS WHO C LAIM EXEMPTION FROM TAX UNDER SECTION 11 ON THE GROUND THAT THEIR OBJEC TS ARE FOR CHARITABLE PURPOSE AS THESE ARE COVERED UNDER ' ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY'. UNDER THE PRINCIPLE OF MUTUALITY, IF TRAD ING TAKES PLACE BETWEEN PERSONS WHO ARE ASSOCIATED TOGETHER AND CONTRIBUTE TO A COMMON FUND FOR THE FINANCING OF SOME VENTURE OR OBJECT AND IN THIS RESPECT HAVE NO DEALINGS OR RELATIONS WITH ANY OUTSIDE BODY, THEN A NY SURPLUS RETURNED TO THE PERSONS FORMING SUCH ASSOCIATION IS NOT CHARGEA BLE TO TAX. IN SUCH CASES, THERE MUST BE COMPLETE IDENTITY BETWEEN THE CONTRIBUTORS AND THE PARTICIPANTS. THEREFORE, WHERE INDUSTRY OR TRADE AS SOCIATIONS CLAIM BOTH TO BE CHARITABLE INSTITUTIONS AS WELL AS MUTUAL ORGANI ZATIONS AND THEIR ACTIVITIES ARE RESTRICTED TO CONTRIBUTIONS FROM AND PARTICIPATION OF ONLY THEIR MEMBERS, THESE WOULD NOT FALL UNDER THE PURVIEW OF THE PROVISO TO SECTION 2 (15) OWING TO THE PRINCIPLE OF MUTUALITY. HOWEVER , IF SUCH ORGANIZATIONS HAVE DEALINGS WITH NON-MEMBERS, THEIR CLAIM TO BE C HARGEABLE ORGANIZATIONS WOULD NOW BE GOVERNED BY THE ADDITION AL CONDITIONS STIPULATED IN THE PROVISO TO SECTION 2 (15). 3.2 IN THE FINAL ANALYSIS, HOWEVER, WHETHER THE ASS ESSEE HAS FOR ITS OBJECT ' THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PU BLIC UTILITY' IS A QUESTION OF FACT. IF SUCH ASSESSEE IS ENGAGED IN AN Y ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR RENDERS ANY SERVI CE IN RELATION TO TRADE, COMMERCE OR BUSINESS, IT WOULD NOT BE ENTITL ED TO CLAIM THAT ITS OBJECT IS CHARITABLE PURPOSE. IN SUCH A CASE, THE O BJECT OF ' GENERAL PUBLIC UTILITY' WILL BE ONLY A MASK OR A DEVICE TO HIDE TH E TRUE PURPOSE WHICH IS TRADE, COMMERCE OR BUSINESS OR THE RENDERING OF ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS. EACH CASE WOULD, THERE FORE, BE DECIDED ON ITS OWN FACTS AND NO GENERALIZATION IS POSSIBLE. AS SESSEES, WHO CLAIM THAT THEIR OBJECT IS ' CHARITABLE PURPOSE' WITHIN THE ME ANING OF SECTION 2(15), ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 10 OF 15 WOULD BE WELL ADVISED TO ESCHEW ANY ACTIVITY WHICH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR THE RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS.' 8. WHAT THUS EMERGES FROM THE STATUTORY PROVISIONS, AS EXPLAINED IN THE SPEECH OF FINANCE MINISTER AND THE CBDT CIRCULAR, I S THAT THE ACTIVITY OF A TRUST WOULD BE EXCLUDED FROM THE TERM ' CHARITABLE PURPOSE' IF IT IS ENGAGED IN ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR RENDERS ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSIN ESS FOR A CESS, FEE AND/OR ANY OTHER CONSIDERATION. IT IS NOT AIMED AT EXCLUDING THE GENUINE CHARITABLE TRUSTS OF GENERAL PUBLIC UTILITY BUT IS AIMED AT EXCLUDING ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS WHICH ARE MASKED AS ' CHARITABLE PURPOSE'. 9. MANY ACTIVITIES OF GENUINE CHARITABLE PURPOSES W HICH ARE NOT IN THE NATURE OF TRADE, COMMERCE OR BUSINESS MAY STILL GEN ERATE MARKETABLE PRODUCTS. AFTER SETTING OFF OF THE COST, FOR PRODUC TION OF SUCH MARKETABLE PRODUCTS FROM THE SALE CONSIDERATION, THE ACTIVITY MAY LEAVE A SURPLUS. THE LAW DOES NOT EXPECT THE TRUST TO DISPOSE OF ITS PRODUCE AT ANY CONSIDERATION LESS THAN THE MARKET VALUE. IF THERE IS ANY SURPLUS GENERATED AT THE END OF THE YEAR, THAT BY ITSELF WO ULD NOT BE THE SOLE CONSIDERATION FOR JUDGING WHETHER ANY ACTIVITY IS T RADE, COMMERCE OR BUSINESS - PARTICULARLY IF GENERATING ' SURPLUS' IS WHOLLY INCIDENTAL TO THE PRINCIPAL ACTIVITIES OF THE TRUST; WHICH IS OTHERWI SE FOR GENERAL PUBLIC UTILITY, AND THEREFORE, OF CHARITABLE NATURE. ** ** ** 11. WE ARE WHOLLY IN AGREEMENT WITH THE VIEW OF THE TRIBUNAL. THE OBJECTS OF THE TRUST CLEARLY ESTABLISH THAT THE SAME WAS FO R GENERAL PUBLIC UTILITY AND WHERE FOR CHARITABLE PURPOSES. THE MAIN OBJECTI VES OF THE TRUST ARE - TO BREED THE CATTLE AND ENDEAVOUR TO IMPROVE THE QU ALITY OF THE COWS AND OXEN IN VIEW OF THE NEED OF GOOD OXEN AS INDIA IS P ROMINENT AGRICULTURAL COUNTRY; TO PRODUCE AND SALE THE COW MILK; TO HOLD AND CULTIVATE AGRICULTURAL LANDS; TO KEEP GRAZING LANDS FOR CATTL E KEEPING AND BREEDING; TO REHABILITATE AND ASSIST RABARIS AND BHARWADS; TO MAKE NECESSARY ARRANGEMENTS FOR GETTING INFORMATICS AND SCIENTIFIC KNOWLEDGE AND TO DO SCIENTIFIC RESEARCH WITH REGARD TO KEEPING AND BREE DING OF THE CATTLE, AGRICULTURE, USE OF MILK AND ITS VARIOUS PREPARATIO NS, ETC.; TO ESTABLISH OTHER ALLIED INSTITUTIONS LIKE LEATHER WORK AND TO RECOGNIZE AND HELP THEM IN ORDER TO MAKE THE COW KEEPING ECONOMICALLY VIABL E; TO PUBLISH STUDY MATERIALS, BOOKS, PERIODICALS, MONTHLIES ETC., IN O RDER TO PUBLICIZE THE OBJECTS OF THE TRUST AS ALSO TO OPEN SCHOOLS AND HO STELS FOR IMPARTING EDUCTION IN COW KEEPING AND AGRICULTURE HAVING REGA RD TO THE TRUST OBJECTS. 12. ALL THESE WERE THE OBJECTS OF THE GENERAL PUBLI C UTILITY AND WOULD SQUARELY FALL UNDER SECTION 2 (15) OF THE ACT. PROF IT MAKING WAS NEITHER THE AIM NOR OBJECT OF THE TRUST. IT WAS NOT THE PRINCIP AL ACTIVITY. MERELY BECAUSE WHILE CARRYING OUT THE ACTIVITIES FOR THE P URPOSE OF ACHIEVING THE OBJECTS OF THE TRUST, CERTAIN INCIDENTAL SURPLUSES WERE GENERATED, WOULD NOT RENDER THE ACTIVITY IN THE NATURE OF TRADE, COM MERCE OR BUSINESS. AS CLARIFIED BY THE CBDT IN ITS CIRCULAR NO. 11/2008 D ATED 19TH DECEMBER 2008 THE PROVISO AIMS TO ATTRACT THOSE ACTIVITIES W HICH ARE TRULY IN THE ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 11 OF 15 NATURE OF TRADE, COMMERCE OR BUSINESS BUT ARE CARRI ED OUT UNDER THE GUISE OF ACTIVITIES IN THE NATURE OF ' PUBLIC UTILITY'. 34. WHAT ESSENTIALLY FOLLOWS FROM THE ABOVE DISCUSSION S IS THAT, EVEN AFTER THE 2008 AMENDMENT AND INSERTION OF PROVISO TO SECTION 2(15), SO FAR AS 'ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY IS CONCERNED , AS LONG AS PROFIT EARNING IS NOT THE PREDOMINANT PURPOSE OF THE ACTIVITY OF THE ASSESSEE, THE BENEFIT OF SECTION 2(15) CANNOT BE DECLINED. IN OTHER WORDS, T HE ACCRUAL OF PROFITS TO THE ASSESSEE, BY ITSELF, CANNOT, THEREFORE, BE REASON E NOUGH TO HOLD THAT THE ASSESSEE IS NOT COVERED BY THE DEFINITION OF 'CHARI TABLE INSTITUTION' UNDER SECTION 2(15). OF COURSE, ALL THESE DISCUSSIONS ARE RELEVANT ONLY FOR THE RESIDUARY CLAUSE I.E. 'ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY'. IN CASE, THEREFORE, WHERE THE OBJECTS BEING PURSUED BY THE A SSESSEE IS 'RELIEF OF THE POOR', 'EDUCATION' OR 'MEDICAL RELIEF', IT IS NOT E VEN MATERIAL WHETHER OR NOT THE ASSESSEE IS CARRYING ON AN ACTIVITY IN THE NATURE O F TRADE, COMMERCE OR BUSINESS IN THE COURSE OF SUCH ACTIVITIES. THE KEY FACTOR IS AS TO WHAT ARE THE ACTIVITIES OF THE ASSESSEE INSTITUTION AND AS TO WH AT THESE ACTIVITIES SEEK TO ACHIEVE. 35. LET US TAKE A PAUSE HERE AND EXAMINE AS TO WHAT AR E THE ACTIVITIES OF THE ASSESSEE CRICKET ASSOCIATIONS SO AS TO BE BROUGHT W ITHIN THE AMBIT OF TRADE, COMMERCE OR BUSINESS. WE HAVE SEEN OBJECTS OF THE A SSOCIATION, WHICH ARE REPRODUCED EARLIER IN OUR ORDER, AND IT IS NOT EVEN THE CASE OF THE REVENUE THAT THESE OBJECTS HAVE ANYTHING TO DO WITH ANY TRADE, C OMMERCE OR BUSINESS; THESE OBJECTS ARE SIMPLY TO PROMOTE CRICKET. THE TR IGGER FOR INVOKING PROVISO TO SECTION 2(15), AS SHRI SOPARKAR RIGHTLY CONTENDS, H AS TO AN ACTIVITY OF THE ASSESSEE WHICH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. HOWEVER, THE CASE OF THE REVENUE AUTHORITIES HINGES ON THE A LLEGATION THAT THE WAY AND MANNER IN WHICH CRICKET MATCHES ARE BEING ORGANIZED , PARTICULARLY THE IPL MATCHES, THE ACTIVITY OF ORGANIZING CRICKET MATCHES IS NOTHING BUT BRUTE COMMERCE. UNDOUBTEDLY, IT WOULD APPEAR THAT RIGHT F ROM THE TIME KERRY PACKER STARTED HIS WORLD SERIES CRICKET IN 1977, THERE HAS BEEN NO LOOKING BACK IN COMMERCIALIZATION OF CRICKET AND THE IMPACT OF THIS COMMERCIALIZATION HAS NOT LEFT INDIAN CRICKET INTACT. THE INDIAN PREMIER LEAG UE AND THE RULES OF THE GAME BEING GOVERNED BY THE DICTATES OF COMMERCIAL CONSID ERATIONS MAY SEEM TO BE ONE SUCH EXAMPLE OF COMMERCIALIZATION OF INDIAN CRI CKET. THE DIFFICULTY FOR THE CASE OF THE REVENUE BEFORE US, HOWEVER, IS THAT THE SE MATCHES ARE NOT BEING ORGANIZED BY THE LOCAL CRICKET ASSOCIATIONS. WE ARE TOLD THAT THE MATCHES ARE BEING ORGANIZED BY THE BOARD OF CRICKET CONTROL OF INDIA, BUT THEN, IF WE ARE TO ACCEPT THIS CLAIM AND INVOKE THE PROVISO TO SECTION 2(15) FOR THIS REASON, IT WILL AMOUNT TO A SITUATION IN WHICH PROVISO TO SECTION 2 (15) IS BEING INVOKED ON ACCOUNT OF ACTIVITIES OF AN ENTITY OTHER THAN THE A SSESSEES- SOMETHING WHICH LAW DOES NOT PERMIT. WE ARE NOT REALLY CONCERNED, A T THIS STAGE, WHETHER THE ALLEGATIONS ABOUT COMMERCIALIZATION OF CRICKET BY T HE BCCI ARE CORRECT OR NOT, BECAUSE THAT ASPECT OF THE MATTER WOULD BE RELEVANT ONLY FOR THE PURPOSE OF PROVISO TO SECTION 2(15) BEING INVOKED IN THE HANDS OF THE BCCI. WE DONOT WISH TO DEAL WITH THAT ASPECT OF THE MATTER OR TO M AKE ANY OBSERVATIONS WHICH WOULD PREJUDGE THE CASE OF THE BCCI. SUFFICE TO SAY THAT THE VERY FOUNDATION OF REVENUE'S CASE IS DEVOID OF LEGALLY SUSTAINABLE BASIS FOR THE SHORT REASON THAT THE COMMERCIALIZATION OF CRICKET BY THE BCCI, EVEN IF THAT BE SO, CANNOT BE REASON ENOUGH TO INVOKE THE PROVISO TO SECTION 2 (15). WE ARE ALIVE OF ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 12 OF 15 LEARNED COMMISSIONER (DR)'S SUGGESTION THAT THE CRI CKET ASSOCIATIONS CANNOT BE SEEN ON STANDALONE BASIS AS THE BCCI IS NOTHING BUT AN APEX BODY OF THESE CRICKET ASSOCIATIONS AT A COLLECTIVE LEVEL AN D WHATEVER BCCI DOES IS AT THE BEHEST OF OR WITH THE CONNIVANCE OF THE LOCAL C RICKET ASSOCIATIONS, AND THAT IT IS NOT THE CASE THAT ANYONE CAN BECOME A MEMBER OF THE BCCI BECAUSE ONLY A RECOGNIZED CRICKET ASSOCIATION CAN BECOME A MEMBER OF THE BCCI. WE ARE ALSO ALIVE TO LEARNED COMMISSIONER'S ARGUMENT T HAT WHAT IS BEING SOUGHT TO BE PROTECTED BY THE CHARITABLE STATUS OF THESE A SSOCIATIONS IS THE SHARE OF THESE CRICKET ASSOCIATIONS FROM THE COMMERCIAL PROF ITS EARNED BY THE BCCI BY ORGANIZING THE CRICKET MATCHES. THE PROBLEM, HOWEVE R, IS THAT THE ACTIVITIES OF THE APEX BODY, AS WE HAVE EXPLAINED EARLIER, CANNOT BE REASON ENOUGH TO TRIGGER PROVISO TO SECTION 2(15) IN THESE CASES. WH ETHER THESE CRICKET ASSOCIATIONS COLLECTIVELY CONSTITUTE BCCI OR NOT, I N THE EVENT OF BCCI BEING INVOLVED IN COMMERCIAL ACTIVITIES, THE TAXABILITY O F SUCH COMMERCIAL PROFITS WILL ARISE IN THE HANDS OF THE BCCI AND NOT THE END BENE FICIARIES. EVEN IN SUCH A CASE THE POINT OF TAXABILITY OF THESE PROFITS IS TH E BCCI AND NOT THE CRICKET ASSOCIATIONS, BECAUSE, EVEN GOING BY LEARNED COMMIS SIONER'S ARGUMENTS, THESE RECEIPTS IN THE HANDS OF THE CRICKET ASSOCIAT IONS IS NOTHING BUT APPROPRIATION OF PROFITS. WHAT CAN BE TAXED IS ACCR UAL OF PROFITS AND NOT APPROPRIATION OF PROFITS. IN ANY EVENT, DISTINCTION BETWEEN THE CRICKET ASSOCIATIONS AND THE BCCI CANNOT BE IGNORED FOR THE PURPOSES OF TAX TREATMENT. THERE IS NO DISPUTE THAT THE MATCHES WER E ORGANIZED BY THE BCCI, AND THE ASSESSEE CANNOT THUS BE FAULTED FOR THE COM MERCIAL CONSIDERATIONS SAID TO BE INHERENT IN PLANNING THE MATCHES. AS WE MAKE THESE OBSERVATIONS, AND AS WE DO NOT HAVE THE BENEFIT OF HEARING THE PE RSPECTIVE OF THE BCCI, WE MAKE IT CLEAR THAT THESE OBSERVATIONS WILL HAVE NO BEARING ON ANY ADJUDICATION IN THE HANDS OF THE BCCI. SUFFICE TO SAY THAT SO FA R AS THE CRICKET ASSOCIATIONS ARE CONCERNED, THE ALLEGATIONS OF THE REVENUE AUTHO RITIES HAVE NO BEARING ON THE DENIAL OF THE STATUS OF 'CHARITABLE ACTIVITIES' IN THE HANDS OF THE CRICKET ASSOCIATIONS BEFORE US- PARTICULARLY AS LEARNED COM MISSIONER HAS NOT BEEN ABLE TO POINT OUT A SINGLE OBJECT OF THE ASSESSEE C RICKET ASSOCIATIONS WHICH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, AND, AS IT IS NOT EVEN IN DISPUTE THAT THE OBJECTS BEING PURSUED BY THE ASSESSEE CRIC KET ASSOCIATIONS ARE 'OBJECTS OF GENERAL PUBLIC UTILITY' UNDER SECTION 2 (15). ALL THE OBJECTS OF THE ASSESSEE CRICKET ASSOCIATIONS, AS REPRODUCED EARLIE R IN THIS ORDER, UNAMBIGUOUSLY SEEK TO PROMOTE THE CRICKET, AND THIS OBJECT, AS HAS BEEN ALL ALONG ACCEPTED BY THE CBDT ITSELF, AN OBJECT OF GEN ERAL PUBLIC UTILITY. 36. CRICKET IS INDEED AN IMMENSELY POPULAR GAME IN THI S PART OF THE WORLD, AND ANYTHING TO DO WITH CRICKET RESULTS IN MASS INVOLVE MENT OF PUBLIC AT LARGE. THE SHEER STRENGTH OF THESE NUMBERS RESULTS IN HIGHER V ISIBILITY OF CRICKETING ACTIVITIES AND THE SCALE OF OPERATIONS ON WHICH THE WORK FOR DEVELOPMENT OF CRICKET IS TO BE CARRIED OUT. THESE FACTS, BY ITSEL F, AND WITHOUT THE ASSESSEES BEFORE US DEVIATING FROM THEIR OBJECTS OR VENTURING INTO TRADE, COMMERCE OR BUSINESS, CANNOT REQUIRE THE ACTIVITIES TO BE TREAT ED AS COMMERCIAL ACTIVITIES. WHEN A CRICKET STADIUM IS TO BE BUILT, IT HAS TO AC COMMODATE A VERY LARGE NUMBER OF PERSONS BUT THE SIZE OF THE STADIUM WOULD NOT MEAN THAT THE ACTIVITY IS FOR ANYTHING OTHER THAN PROMOTION OF CRICKET.. W HEN THE NUMBERS ARE LARGE, THE SCALE OF OPERATIONS IS LARGE, AND WHEN SCALE OF OPERATIONS ARE LARGER, EVEN THE SURPLUS OR DEFICIT COULD BE LARGE, BUT THEN THE SCALE OF OPERATIONS MAY BE A SCALE ON WHICH COMMERCIAL ACTIVITIES COULD BE CARRI ED OUT BUT THAT FACT CANNOT ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 13 OF 15 CONVERT AN OBJECT OF GENERAL PUBLIC UTILITY INTO A COMMERCIAL ACTIVITY. WE HAVE CAREFULLY ANALYSED THE ANNUAL REPORTS AND THE ANNUA L FINANCIAL STATEMENTS OF THE ASSESSEE, AND WE DO NOT FIND ANY OBJECTS, OTHER THAN OBJECTS OF THE CRICKET ASSOCIATIONS, BEING PURSED BY THESE CRICKET ASSOCIA TIONS. THE OBJECTS OF THESE CRICKET ASSOCIATIONS CLEARLY DEMONSTRATE THAT THESE CRICKET ASSOCIATIONS EXIST AND OPERATE PURELY FOR THE PURPOSE OF PROMOTING CRI CKET. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THE PROVISO TO SECTION 2(1 5) HAS BEEN WRONGLY INVOKED IN THESE CASES. 37. LET US ALSO QUICKLY DEAL WITH THE JUDICIAL PRECEDE NTS CITED AT THE BAR AND IN THE ORDERS OF THE AUTHORITIES BELOW. AS REGARDS THE CASE OF JALANDHAR DEVELOPMENT AUTHORITY (SUPRA),THIS DECISION DOES NO T CONSTITUTE A BINDING JUDICIAL PRECEDENT AS CONTRARY VIEW IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST (SUPRA) STANDS APPROVED BY HON'BLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF IMPROVEMENT TRUST MONGA (SUPRA). TAMILANDU CRICKET ASSOCIATION DECISION (SUPRA) BY THE COORDINATE BENCH WAS DISAPP ROVED BY HON'BLE MADRAS HIGH COURT IN THE JUDGMENT REPORTED AS TAMILNADU CR ICKET ASSOCIATION (SUPRA). AS REGARDSCRICKET ASSOCIATION OF BENGAL JUDGMENT (SUPRA), THAT WAS A CASE IN WHICH ADMITTEDLY NO TRA INING, COACHING OR ASSISTANCE WAS PROVIDED TO THE PLAYERS OR ASPIRING PLAYERS AND THE ASSOCIATION WAS FORMED ONLY FOR WATCHING THE MATCHES BY MAKING PAYMENT. IT WAS ON THESE FACTS THAT THE ASSOCIATION WAS HELD TO BE NOT FOR ANY OBJECT OF GENERAL PUBLIC UTILITY. THIS CASE HAS NO RELEVANCE IN THE P RESENT CONTEXT SINCE ADMITTEDLY EVEN THE CBDT CIRCULAR TREATS THE CRICKE T ASSOCIATIONS AS PURSUING OBJECTS OF GENERAL PUBLIC UTILITY AND THE DISPUTE I S CONFINED TO THE ALLEGED ELEMENT OF TRADE, COMMERCE AND BUSINESS IN SO PURSU ING THE OBJECTS OF GENERAL PUBLIC UTILITY. AS REGARDS PECULIARITIES OF CRICKET ASSOCIATION OF BENGALCASE (SUPRA), THE FOLLOWING OBSERVATIONS MADE BY HON'BLE COURT ARE RELEVANT: 'THE FACTS OF THE PRESENT CASE ARE THAT THE ASSESSE E ASSOCIATION MERELY HELD CERTAIN DEMONSTRATION OR EXHIBITION MATCHES. I T DOES NOT PROVIDE ANY TRAINING IN THE GAME OF CRICKET TO NOVICES OR ANY A DVANCED TRAINING FOR PERSONS WHO ARE ALREADY PRACTISED PLAYERS. ITS ACTI VITIES OUTSIDE THE HOLDING OF THE EXHIBITION MATCHES IS LIMITED ENTIRE LY TO ITS OWN MEMBERS. THE ONLY CONTACT IT HAS WITH THE PUBLIC IS BY WAY O F HAVING THEM AS SPECTATORS, ON PAYMENT OF A FEE, OF MATCHES ARRANGE D BY IT. I FIND IT IMPOSSIBLE TO HOLD THAT ANY BENEFIT OR ENTERTAINMEN T WHICH IS THUS PAID FOR AND WHICH IS AVAILED OF BY ONLY SUCH MEMBERS OF THE PUBLIC AS CAN OR WISH TO PAY FOR IT CAN IN ANY SENSE BE A PURPOSE OF A CH ARITY. IT IS TRUE THAT CHARITY IN THE INCOME-TAX SENSE NEED NOT HAVE ANY E LEEMOSYNARY ELEMENT IN IT AND THAT AN OBJECT OF GENERAL PUBLIC UTILITY IS UNDER THE INCOME-TAX LAW A CHARITABLE OBJECT. INDEED, IF THE OBJECTS PROFESS ED BY THE ASSOCIATION ARE TO BE TREATED AS CHARITABLE OBJECTS AT ALL, THEY CA N BE SO TREATED ONLY IF THEY CAN BE REGARDED AS OBJECTS OF GENERAL PUBLIC U TILITY. I FIND IT IMPOSSIBLE TO HOLD THAT THERE IS ANY GENERAL PUBLIC UTILITY, SO AS TO AMOUNT TO A CHARITY, IN ARRANGING FOR CRICKET MATCHES WHIC H THE PUBLIC CAN SEE ON PAYMENT'. 38. THE REVENUE THUS DOES NOT DERIVE ANY ADVANTAGE FRO M CRICKET ASSOCIATION OF BENGAL'S CASE (SUPRA). THE RELIANCE OF THE ASSES SING OFFICER, ON THIS JUDICIAL ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 14 OF 15 PRECEDENT, IS WHOLLY MISPLACED AND IN FACT CONTRARY TO THE STAND OF THE CBDT ON THIS ISSUE. THE CBDT CIRCULAR NO. 395 [F. NO. 18 1(5) 82/IT(A-I)], DATED 24- 9-1984, ACCEPTS THE POSITIONS THAT A CRICKET ASSOCI ATION, BEING A SOCIETY FOR PROMOTION FOR SPORTS, HAS ITS OBJECTS AS 'ADVANCEME NT OF OBJECT OF GENERAL PUBLIC UTILITY', AND, FOR THIS REASON, IT FALLS IN THE CATEGORY OF CHARITABLE INSTITUTIONS. THE DISPUTE IS ONLY WITH RESPECT TO T HE ACTIVITIES BEING IN THE NATURE OF TRADE, BUSINESS OR COMMERCE. CLEARLY, THI S JUDICIAL PRECEDENT, IF HELD TO BE APPLICABLE ON THE FACTS OF THIS CASE, WILL RE SULT IN A MUCH HARSHER A POSITION THAN ACCEPTED BY THE CBDT. BE THAT AS IT M AY, THAT IS NOT THE SITUATION AND THIS JUDICIAL PRECEDENT CANNOT BE HELD TO BE AP PLICABLE ON THE FACTS OF THIS CASE. 39. AS REGARDS THE DECISION OF THE COORDINATE BENCH IN THE CASE OF ENTERTAINMENT SOCIETY OF GOA (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT IN THE LIGHT OF SUBSEQUENT JUDGMENTS OF HON'BLE HIGH C OURTS IN THE CASE OF TRIBUNE TRUST (SUPRA) AND SABARMATI GAUSHALA TRU ST(SUPRA), WHICH UPHOLD THE CONTRARY VIEW, THIS COORDINATE BENCH DECISION D OES NOT CONSTITUTE A BINDING JUDICIAL PRECEDENT. 40. WE HAVE NOTED THAT THERE ARE A LARGE NUMBER OF JUD ICIAL PRECEDENTS, IN THE CASES OF VARIOUS OTHER CRICKET ASSOCIATIONS- DETAIL S OF WHICH ARE SET OUT EARLIER IN THIS ORDER, HOLDING THAT THE PROVISO TO SECTION 2(15) CANNOT BE INVOKED IN THE CASES OF SUCH SIMILARLY PLACED CRICKET ASSOCIATIONS . RESPECTFULLY FOLLOWING THE SAME, AND ALSO FOR THE DETAILED REASONS SET OUT ABO VE, WE UPHOLD THE PLEA OF THE ASSESSEE. WE ARE NOT REPRODUCING EXTRACTS FROM THESE DECISIONS, FOR THE SAKE OF BREVITY, BUT WE ADOPT, AND CONCUR WITH, THE REASONING OF THESE DECISIONS. WHEN PROVISO TO SECTION 2(15) CANNOT BE INVOKED ON THE FACTS OF THESE CASES, THE BENEFITS OF SECTION 11 AND 12, WHI CH WERE DECLINED ONLY BY INVOKING THE PROVISO TO SECTION 2 (15), COULD NOT H AVE BEEN DECLINED ON THE FACTS OF THESE CASES. 41. WE HAVE NOTED THAT ALL THE LEARNED REPRESENTATIVES HAVE ADVANCED DETAILED ARGUMENTS ON THE PROPOSITION THAT SINCE TH E ASSESSEE CRICKET ASSOCIATIONS ARE ENGAGED IN EDUCATIONAL ACTIVITIES, IT IS NOT REALLY MATERIAL WHETHER OR NOT THE ASSESSEE HAS ENGAGED ITSELF IN T HE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. HOWEVER, IN THE LIG HT OF OUR CATEGORICAL FINDING THAT THE ASSESSEE CRICKET ASSOCIATIONS WERE NOT REALLY ENGAGED IN THE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSI NESS, IT IS NOT REALLY NECESSARY TO ADJUDICATE ON THIS PLEA. WE LEAVE THE QUESTION OPEN FOR ADJUDICATION IN A FIT CASE. CONCLUSIONS ON THIS ISSUE: 42. FOR THE DETAILED REASONS SET OUT ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW WERE IN ERROR IN INVOKING THE PROVISO TO SECTION 2(15) AND THUS IN DECLINING THE BENEFIT OF SECTION 11 AND 12 TO THE APPELLANT CRICKET ASSOCIATIONS. TO THIS EXTENT, PLEA OF THE APPELLANT S MUST BE UPHELD. WE UPHOLD THE PLEA. ITA NO. 2675/AHD/2017 BARODA CRICKET ASSOCIATION VS. DCIT ASSESSMENT YEAR: 2014-15 PAGE 15 OF 15 4. RESPECTFULLY FOLLOWING THE VIEW SO TAKEN BY THE COORDINATE BENCH, WE UPHOLD THE PLEA OF THE ASSESSEE. THE STAND OF THE AUTHORI TIES BELOW ON ACTION UNDER SECTION 2(15) R.W.S. 13(8) THUS STANDS REVERSED, AND THE AS SESSING OFFICER IS DIRECTED TO ALLOW THE ASSESSEE BENEFIT OF SECTION 11. 5. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 11 TH JUNE, 2019 SD/- SD/- MS. MADHUMITA ROY PRA MOD KUMAR (JUDICIAL MEMBER) (VICE PRESIDENT) AHMEDABAD, THE 11 TH DAY OF JUNE, 2019 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: .....ORDER PREPARED AS PER 2 PAGES MANUSCRIPTS OF HONBLE VP-ATTACHED........ ATTACHED....11.06.2019.... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: .. 11.06.2019..... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: .11.06.2019.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: .. 11.06.2019..... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : . . 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER : . 8. DATE OF DESPATCH OF THE ORDER: ......