MUMBAI CRICKET ASSOCIATION, MUMBAI V. ADDL.D.I.T.(E) RG.1, MUMBAI

ITA 4533/MUM/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0600 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 04-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARVIND SONDE; JAYANT GOKHALE
• Keywords: Charitable institution; Retrospective amendment; Cancellation of registration
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI PAWAN SINGH (JM) I.T.A. NO. 4533 /MUM/20 12 (ASSESSMENT YEAR 20 08 - 09 ) MUMBAI CRICKET ASSOCIATION WANKHEDE STADIUM NORTH STAND, A&C BLOCK D - ROAD, CHURCHGATE MUMBAI - 400 020. V S . ADDL.DIT(E) RAGE - 1 PIRAMAL CHAMBERS LALBAUG, PAREL MUMBAI - 400 012. ( APPELLANT ) ( RESPONDENT ) I.T.A. NO. 207/MUM/2014 (ASSESSMENT YEAR 2008 - 09) DY.DIT(E) - 1(1) PIRAMAL CHAMBERS 5 TH FLOOR LALBAUG, PAREL MUMBAI - 400 012. VS . MUMBAI CRIC KET ASSOCIATION WANKHEDE STADIUM NORTH STAND, A&C BLOCK D - ROAD, CHURCHGATE MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN : AAACM3560C A SSESSEE BY SHRI ARVIND SONDE & SHRI JAYANT GOKHALE DEPARTMENT BY S HRI BHUPENDRA KUMAR SINGH DATE OF HEARING 6 . 0 2 . 201 8 DATE OF PRONOUNCEMENT 6 . 0 2 . 201 8 O R D E R PER B.R. BASKARAN (AM) : - THE ASSESSEE HAS FILED APPEAL FOR ASSESSMENT YEAR 2008 - 09 AND THE REVENUE HAS FILED APPEAL FOR ASSESSMENT YEAR 2009 - 10. BOTH THE APPEALS ARE DIRECTED AGAINST THE O RDERS PASSED BY LD CIT(A) - 1, MUMBAI. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS ORDER, FOR THE SAKE OF CONVENIENCE. 2. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 09. THE ASSESSEE IS A PUBLIC CHARITABLE TRUST AND IS ENGAGED IN THE MUMBAI CRICKET ASSOCIATION 2 ACTIVITIES OF PROMOTION AND REGULATION OF GAME OF CRICKET IN MUMBAI. THE ASSESSEE WAS GRANTED REGISTRATION U/S 12A OF THE ACT IN THE YEAR 1975. THE LD DIT (EXEMPTION), VIDE HIS ORDER DATED 31.12.2010, WITHDREW THE REGISTRATION RETROSPECTIVELY. THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008 - 09 ON 31.12.2010 AND BY THAT TIME, THE LD DIT(EXEMPTION) HAD CANCELLED THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A OF THE ACT WITH RETROSPEC TIVE EFFECT. 3. THE ASSESSEE HAD COMPUTED INCOME BY AVAILING EXEMPTION U/S 11 OF THE ACT. ONE OF THE CONDITIONS FOR ALLOWING EXEMPTION U/S 11 WAS THAT THE CHARITABLE TRUST SHOULD HAVE BEEN REGISTERED BY THE LD DIT (EXEMPTION) U/S 12A OF THE ACT. S INCE THE REGISTRATION GRANTED TO THE ASSESSEE U/S 12A HAS BEEN WITHDRAWN BY LD DIT (EXEMPTION) IN THE PROCEEDINGS CARRIED U/S 12AA(3) OF THE ACT WITH RETROSPECTIVE EFFECT, THE AO REJECTED THE CLAIM FOR EXEMPTION U/S 11 OF THE ACT AND ACCORDINGLY DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.1558.66 LAKHS. THE LD CIT(A) ALSO CONFIRMED THE SAME. 4. THE LD A.R SUBMITTED THAT THE ASSESSEE HAD CHALLENGED THE ORDER PASSED BY LD DIT(EXEMPTION) CANCELLING THE REGISTRATION GRANTED TO THE ASSESSEE, BY FILING APPEAL BEFORE ITAT. HE SUBMITTED THAT THE ITAT HAS ALREADY PASSED ITS ORDER IN ITA NO.1700/MUM/2011 ON 08 TH AUGUST, 2012 (138 ITD 0338), WHEREIN IT HAS BEEN HELD THAT THE CANCELLATION OF REGISTRATION CANNOT BE RETROSPECTIVE. ACCORDINGLY THE TRIBUNAL HEL D THAT THE CANCELLATION OF ORDER SHALL TAKE EFFECT FROM 01.06.2010 ONLY. ACCORDINGLY THE LD A.R SUBMITTED THAT THE ASSESSEE SHALL BE HAVING REGISTRATION U/S 12A OF THE ACT DURING ASSESSMENT YEAR 2008 - 09 AND ACCORDINGLY CONTENDED THAT THE ASSESSEE SHOULD B E GRANTED EXEMPTION U/S 11 OF THE ACT. 5. WE HEARD LD D.R AND PERUSED THE RECORD. HAVING REGARD TO THE FACTS NARRATED ABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE GRANTED EXEMPTION U/S 11 OF THE ACT FOR ASSESSMENT YEAR 2008 - 09, SINCE THE TRI BUNAL HAS HELD THAT THE CANCELLATION OF REGISTRATION SHALL TAKE EFFECT FROM 01 - 06 - 2010 MUMBAI CRICKET ASSOCIATION 3 ONLY. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) FOR ASSESSMENT YEAR 2008 - 09 AND RESTORE ALL THE MATTERS TO THE FILE OF THE ASSESSING OFFICER WITH THE DIREC TION TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE BY APPLYING THE PROVISIONS OF EXEMPTION GRANTED U/S 11 OF THE ACT. 6. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2009 - 10. THE REVENUE HAS RAISED FOLLOWING TWO EFFECTIVE GR OUNDS: - 1. THAT ON THE FACTS AND CIRCUMSTANES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO COMPUTE THE INCOME OF THE ASSESSEE IN TERMS OF SECTION 11,12 R.W.S. 13 OF THE INCOME TAX ACT, 1961, WHEN THE ACTIVITIES OF THE ASSESSEE ARE CLEARLY BUSINESS IN NATURE AND DO NOT FALL WITHIN THE DEFINITION OF CHARITABLE PURPOSE AS PER SECTION 2(15) OF THE I.T. ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ACCEPTING THE A RGUMENT OF THE ASSESSEE THAT THE WITHDRAWAL OF SECTION 12A IS VALID ONLY FROM JUNE 1, 2010 AND NOT FROM THE DATE OF SIGNING OF CONCESSIONAIRE AGREEMENT I.E. DECEMBER 12, 2005 AS HELD BY THE DIT(E), MUMBAI . 7. THE FIRST GROUND RELATES TO THE APPLICABI LITY OF THE PROVISO TO SEC. 2(15) OF THE ACT. THE ASSESSEE SET UP CERTAIN RECREATIONAL FACILITIES IN ITS PREMISES, WHICH WERE CONSIDERED AS COMMERCIAL ACTIVITIES BY THE ASSESSING OFFICER. FURTHER THE AO ALSO TOOK THE VIEW THAT THE CRICKET MATCHES CONDUCT ED BY THE ASSESSEE BY SELLING TICKETS WAS A COMMERCIAL ACTIVITY. HENCE HE INVOKED THE PROVISIONS OF THE PROVISO TO SEC. 2(15) OF THE ACT. THUS THE ASSESSING OFFICER REJECTED THE CLAIM FOR EXEMPTION U/S 11 OF THE ACT ON TWO GROUNDS, VIZ., (A) THE REGISTRA TION HAS BEEN CANCELLED BY LD DIT (EXEMPTION) WITH RETROSPECTIVE EFFECT. (B) THE ASSESSEE HAS INDULGED IN COMMERCIAL ACTIVITIES IN THE FORM CONDUCTING CRICKET MATCHES AND RUNNING RECREATIONAL CENTRES. 8. THE SECOND GROUND URGED BY THE REVENUE RELATES TO THE FIRST REASONING GIVEN BY THE AO, I.E., THE LD DIT (EXEMPTION) HAS CANCELLED THE REGISTRATION WITH RETROSPECTIVE EFFECT AND HENCE EXEMPTION U/S 11 SHOULD BE DENIED TO THE ASSESSEE. THE SAME IS LIABLE TO BE DISMISSED IN VIEW OF THE ORDER PASSED BY MUMBAI CRICKET ASSOCIATION 4 T RIBUNAL IN ITA NO.1700/MUM/2011 (SUPRA), WHEREIN THE TRIBUNAL HAS ALSO HELD THAT THE CANCELLATION OF REGISTRATION SHALL TAKE EFFECT FROM 01 - 06 - 2010. 9. COMING TO THE SECOND REASONING GIVEN BY THE AO, WHICH IS SUPPORTED IN THE FIRST GROUND OF THE REVENUE , WE NOTICE THAT THE AO HAS TAKEN THE VIEW THAT THE CONDUCTING OF CRICKET MATCHES BY SELLING TICKETS WOULD AMOUNT TO COMMERCIAL ACTIVITY. HE HAS ALSO TAKEN THE VIEW THAT THE RECREATIONAL FACILITIES CREATED BY THE ASSESSEE ALSO RESULTS IN CONDUCTING OF COM MERCIAL ACTIVITIES. ACCORDINGLY THE AO HELD THAT THE ASSESSEE WOULD BE COVERED BY THE PROVISO TO SEC.2(15) OF THE ACT AND ACCORDINGLY HELD THAT THE ASSESSEE CANNOT AVAIL EXEMPTION U/S 11 ON THIS REASON ALSO. 10. BEFORE LD CIT(A), THE ASSESSEE SUBMITT ED THAT IT HAS BEEN CONDUCTING CRICKET MATCHES FOR A NUMBER OF YEARS AND THERE HAS BEEN NO CHANGE IN FACTS. IT WAS ALSO SUBMITTED THAT THE RECREATIONAL FACILITIES WERE NOT COMMENCED DURING THE YEAR UNDER CONSIDERATION AND IT BECAME OPERATIONAL ONLY DURING AY 2010 - 11. 11. THE LD CIT(A) TOOK THE VIEW THAT ASSESSEE IS PROMOTING CRICKET GAME BY HOLDING CRICKET MATCHES AND IT IS WITHIN THE SCOPE OF ITS OBJECTS. ACCORDINGLY HE REJECTED THE VIEW TAKEN BY THE AO. WITH REGARD TO THE RECREATION FACILITIES, THE LD CIT(A) NOTICED THAT THE INCOME OF RECREATION CENTRE IS NOT RECEIVED BY THE ASSESSEE AND FURTHER THE SAID FACILITIES BECAME OPERATIONAL ONLY IN THE YEAR RELEVANT TO AY 2010 - 11. ACCORDINGLY THE LD CIT(A) REJECTED THE SECOND REASONING GIVEN BY AO IN ORDE R TO DENY EXEMPTION U/S 11 OF THE ACT. THE REVENUE IS AGGRIEVED. 12. WE HEARD THE PARTIES AND PERUSED THE RECORD. THERE IS NO DISPUTE THAT THE PROMOTION OF CRICKET FALLS WITHIN THE SCOPE OF OBJECTS OF THE ASSESSEE. FURTHER, THE RECREATIONAL FACILIT IES DID NOT BECOME OPERATIONAL DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND ACCORDINGLY CONFIRM THE SAME. MUMBAI CRICKET ASSOCIATION 5 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE FILED FOR AY 20 08 - 09 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE FILED FOR AY 2009 - 10 IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 06 . 0 2 .201 8 . SD/ - SD/ - (PAWAN SINGH ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 6 / 0 2 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER , //TRUE COPY// SENIOR P RIVATE S ECRETARY PS ITAT, MUMBAI