RAJASTHAN CRICKET ASSOCIATION, Jaipur V. CIT-1, Jaipur

ITA 544/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5217 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENA CIT DHK
• Assessee Lawyers: KAPIL GOYALADV
• Keywords: Charitable institution; Opportunity of being heard; Competent authority
• Section: 12A; 12AA; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 544/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2005-06 M/S RAJASTHAN CRICKET ASSOCIATION, NORTH BLOCK, SMS STADIUM, AMBEDKAR CIRCLE, NEW VIDHAN SABHA, JAIPUR. CUKE VS. COMMISSIONER OF INCOME TAX-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAATR 0798 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI KAPIL GOYAL(ADV) JKTLO DH VKSJ LS@ REVENUE BY : SHRI M.S. MEENA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/03/2016 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 09/06/2016 VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/03/2013 OF THE LEARNED CIT(A)-I, JAIPUR FOR A.Y. 2005-06. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE IMPUGNED ORDER DATED 28.03.2013 U/S 12AA(3)/ 254 OF THE ACT IS BAD IN LAW AND ON FACTS OF THE CASE, F OR WANT OF JURISDICTION IN AS MUCH AS THE HONBLE ITAT 2 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT DIRECTED THE ID. CIT, JAIPUR-I, JAIPUR TO EXAMINE TH E FACTS U/S 12AA(1) OF THE ACT WITH A VIEW TO GRANT REGISTRATION AFRESH HOWEVER, THE ID. CIT, JAIPUR-I, J AIPUR STILL DECIDED THE ISSUE U/S 12AA(3) OF THE ACT, AND FOR VARIOUS OTHER REASONS AND HENCE, THE IMPUGNED ORDER KINDLY BE QUASHED AND THE APPELLANT BE HELD ENTITLE D TO REGISTRATION. 2. THE ID. CIT, JAIPUR-I, JAIPUR ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN HOLDING THAT THERE WERE SUBSTANTIAL AMENDMENTS MADE IN THE CONSTITUTION/ MA IN OBJECTS OF THE APPELLANT AND ALSO ERRED IN HOLDING THAT SOME OF THE OBJECTS ARE NOT CHARITABLE, WHICH FINDI NG OF THE FACT, IS PERVERSE AND CONTRARY TO THE RECORD AN D HENCE, MAY KINDLY BE QUASHED. 3. THE ID. CIT, JAIPUR-I, JAIPUR ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN INVOKING AND APPLYING THE PROVISIONS OF SEC.12AA(3) OF THE ACT IN THIS CASE, WHICH IS BAD IN LAW AND ON FACTS OF THE CASE AND HENCE, TH E INVOKING OF THE SAID PROVISIONS BE QUASHED. 4. THE ID. CIT, JAIPUR-I, JAIPUR ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN WITHDRAWING & CANCELLING, TH E REGISTRATION ALREADY GRANTED U/S 12A(A) VIDE CERTIF ICATE DATED 02/09/1988, BY INVOKING SEC.12AA(3) OF THE AC T FOR AND FROM A.Y. 2005-06 AND ONWARD. THE SAID WITHDRAWAL & CANCELLATION OF THE REGISTRATION IS BAD IN LAW AND ON FACTS OF THE CASE AND HENCE, THE REGISTRA TION ALREADY GRANTED, PLEASE BE RESTORED. 5. THE ID. CIT, JAIPUR-I, JAIPUR FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN INVOKING AND APPLYIN G THE PROVISO BELOW SEC.2(15) OF THE ACT FOR AND FROM A.Y. 2009-10 AND ONWARD, WHICH IS BAD IN LAW AND ON FACTS 3 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT OF THE CASE AND HENCE, THE APPLICATION OF THE SAID PROVISO BE QUASHED. 6. THE ID. CIT, JAIPUR-I, JAIPUR FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN HOLDING THAT THE ACT IVITIES OF THE APPELLANT TRUST, WERE COMMERCIAL AND THERE WAS NO ELEMENT OF CHARITY AND HENCE IN WITHDRAWING THE REGISTRATION GRANTED U/S 12A(A) OF THE ACT. SUCH FI NDING AND ACTION IS BAD IN LAW AND ON FACTS OF THE CASE AN D HENCE, THE CONCLUSION SO DRAWN PLEASE BE REVERSED AN D THE REGISTRATION BE RESTORED. 7. THE ID. CIT, JAIPUR-I, JAIPUR FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN RECORDING THE FINDIN GS ADVERSE TO THE APPELLANT TRUST WHICH ARE CONTRARY TO THE FACTS AND MATERIAL ALREADY ON RECORD AND THEREFORE, SUCH FINDING KINDLY BE NEGATED/ QUASHED. 8. THE ID. CIT, JAIPUR-I, JAIPUR FURTHER ERRED IN LA W AS WELL AS ON THE FACTS OF THE CASE IN MAKING ADVERSE COMME NTS FOR EARLIER YEARS WHICH WERE COMPLETELY UNWARRANTED BEING OUT OF THE SCOPE OF SEC.12AA(3) OF THE ACT AN D THUS WITHOUT JURISDICTION. HENCE, SUCH FINDINGS BE DECLARED VOID OR BE REVERSED. 2. ALL THE GROUNDS OF THE APPEAL ARE REVOLVING AROU ND WITHDRAWING OF REGISTRATION GRANTED U/S 12A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) BY THE LD COMMISSIONER OF INCO ME TAX, JAIPUR. THE LD CIT OBSERVED THAT THE REGISTRATION U/S 12A OF THE AC T WAS GRANTED ON 25/11/2988 TO RAJASTHAN CRICKET ASSOCIATION (IN SHO RT THE RCA) ON THE BASIS OF MEMORANDUM 17 TH FEBRUARY, 1987 AND THE RULES OF THE RCA 4 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT CONTAINING THE OBJECTS OF THE ASSESSEE AS IN FORCE AT THAT TIME. THE OBJECTS OF THE RCA HAD UNDER GONE CHANGES IN THE YEAR 1999 AND 2005 AND THEREFORE, IT WAS INCUMBENT UPON THE ASSESSEE TO SEE K FRESH REGISTRATION ON THE BASIS OF THE AMENDED MEMORANDUM AND RULES. TH E ASSESSEE HAD NOT DONE SO. THUS THE VERY FOUNDATION ON THE BASIS O F WHICH THE ASSESSEE WAS REGISTERED STANDS REMOVED AND THEREFORE, REGISTR ATION GRANTED UNDER SECTION 12A HAS CEASED TO BE OPERATIVE. THE ABOVE FA CTS CAME IN THE NOTICE IN THIS OFFICE IN F.Y. 2010-11. THEREFORE, HE GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE. ACCORDING LY, REGISTRATION WAS WITHDRAWN VIDE ORDER DATED 27/12/2010 FROM A.Y. 2005- 06 AND ONWARD. 2.1 HE FURTHER OBSERVED THAT THE ASSESSEE FILED APP EAL BEFORE HONBLE ITAT CHALLENGING THE WITHDRAWAL OF REGISTRATION U/S 12 AA(3) DATED 27.12.2010. THE HONBLE ITAT, JAIPUR BENCH, JAIPUR VI DE ITS ORDER IN ITA NO.69/JP/2011 DATED 13.07.2012 HAD SET ASIDE THE OR DER OF WITHDRAWAL OF REGISTRATION U/S 12AA(3) AND HAD DIRECTED A FRESH C ONSIDERATION OF ASSESSEES CASE FOR REGISTRATION U/S 12AA IN VIEW OF EXTENSIVE AMENDMENTS EFFECTED BY IT TO ITS MEMORANDUM, BY LAWS, ETC. IN A CCORDANCE WITH LAW. AS PER DIRECTIONS OF HONBLE ITAT THE CASE WAS FIXED FO R HEARING WITH SHRI SHRI FAZLURE REHMAN ON 29.11.2012 AND ALSO CONSIDERED TH E WRITTEN REPLY 5 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT DATED 26/11/2011 ALONGWITH PAPER BOOK CONTAINING MEM ORANDUM OF RCA AND ACTIVITIES ETC. 2.2 THE DEPARTMENT ALSO FILED APPEAL BEFORE HONBLE HIGH COURT CHALLENGING THE ORDER OF HONBLE ITAT DATED 13.07.2 012. THE HONBLE HIGH COURT, RAJASHTAN IN DBIT APPEAL NO. 255/2012 ORDER D ATED 23.01.2013 HAD DECIDED AND OBSERVED AS UNDER:- THE PRAYER IS ALLOWED. THE APPEAL IS, ACCORDINGLY, DISMISSED AS WITHDRAWN WITH OBSERVATION THAT WHILE CONSIDERING A PPLICATION AFRESH, THE ASSESSING OFFICER WILL NOT BE INFLUENCE D BY ANY OBSERVATION OF APPELLATE AUTHORITY OR THE INCOME TA X APPELLATE TRIBUNAL. THE ASSESSEES ARGUMENT HAS BEEN SUMMARIZED BY THE L D CIT(A) AS UNDER:- (1) NO SUBSTANTIAL AMENDMENTS MADE - MOST OF AMENDED CLAUSES IN 2005, ARE NOTHING BUT A RE-DRAFTING, MOD IFYING THE MAIN OBJECTS, KEEPING IN MIND THE CHANGING SCENARIO , SOCIO, TECHNICO, ECONOMIC ADVANCEMENT SO AS TO EFFECTIVELY MANIFEST THE MAIN OBJECTS. (2) EVEN IF THERE ARE CERTAIN AMENDMENTS THE ASSOCI ATION DESERVES REGISTRATION IN AS MUCH AS ITS ACTIVITIES ARE OF CHARITABLE NATURE. (3) ACTION BEYOND SCOPE - THE OTHER BASIS OF WITHDRA WAL OF REGISTRATION I.E. ASSESSEES ACTIVITIES ARE COMMERC IAL WAS NOT 6 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT A GOOD BASIS. IT WAS MATTER RELATING TO APPLICATION OF INCOME WHICH COULD BE EXAMINED ONLY AT THE TIME OF ASSESSME NT. (4) RCAS ACTIVITIES ARE NOT COMMERCIAL. (5) NO COMMERCIAL ACTIVITY UNDER AMENDED SECTION 2( 15). AFTER CONSIDERING THE ASSESSEES REPLY, THE LD CIT H AD MADE COMPARISON BETWEEN THE OBJECTS AS PER MEMORANDUM OF RULES OF AS SOCIATION 1999 AND OBJECTS OF 2005 ON PAGE 3 TO 6 OF THE CIT ORDER. AFT ER COMPARING THE OBJECT OF BOTH THE MEMORANDUM, THE LD ASSESSING OFF ICER HELD THAT THERE CANNOT BE SAID THAT THERE IS NO SUBSTANTIAL AMENDME NT IN THE CONSTITUTION OF THE ASSESSEE. THE OBJECT OF THE TRUST HAD BEEN CH ANGED TWICE I.E. FIRST IN 1999 AND SECOND TIME IN 2005, WHICH ARE SUBSTANTI AL IN NATURE. HE FURTHER HELD THAT THE ASSESSEE SHOULD HAVE APPLIED A FRESH REGISTRATION AFTER AMENDING THE OBJECT OF THE TRUST HAD IT NOT BE EN SO, REGISTRAR OF SOCIETIES WOULD HAVE NOT THREATENED TO CANCEL THE RE GISTRATION IF THE CHANGES ARE NOT MADE AS PER THE PROVISIONS OF RAJAS THAN SPORTS (REGISTRATION, RECOGNITION AND REGULATION OF ASSOCI ATION) ACT, 2005. CONSEQUENT UPON CHANGES THE SCOPE OF ACTIVITIES IS ENHANCED. AS PER MAIN OBJECTS OF THE TRUST UNDERWENT CHANGES, ASSESSEE WAS R EQUIRED TO APPLY FRESHLY FOR REGISTRATION U/S 12A/12AA. THIS VIEW IS S UPPORTED BY THE 7 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ALLAHABAD AGRICULTURAL INSTITUTE AND ANOTHER VS. UNION OF INDIA AND OTHERS [2007] 291 ITR 116 (ALL). THE HONBLE HIGH COUR T HAS HELD AS UNDER:- REGISTRATION IS GRANTED BY THE COMMISSIONER OF CHA RITABLE TRUSTS UNDER SECTION 12A OF THE I.T. ACT, 1961. THE WORDS OF THAT STATUTORY PROVISION SHOW THAT IT APPLIES WHERE T HE OBJECTS OF THE TRUST OR INSTITUTION REMAIN THE SAME. HOWEVER , WHERE THE OBJECTS OF THE TRUST OR INSTITUTION, WHICH WEE T HE BASIS OF GRANT OF REGISTRATION, ARE ALTERED AFTER SUCH GRANT OF REGISTRATION, THE VERY FOUNDATION OF THE REGISTRATI ON HAVING BEEN REMOVED BY A VOLUNTARY ACT OF THE ASSESSEE, TH E REGISTRATION WOULD NOT SURVIVE. ACCORDINGLY, HE HELD THAT THE ASSESSEE HAD TO APPLY AFRESH FOR REGISTRATION U/S 12A OF THE ACT AFTER AMENDING THE OBJECT OF THE TRUST. IT IS NECESSARY TO INTIMATE THE CHANGE AND ALSO APPLIED FOR FRESH R EGISTRATION. IT IS THE BASIC PRINCIPLES OF LAW THAT THE REGISTRATION IS GRA NTED ON THE BASIS OF OBJECT OF AN INSTITUTION. IF THERE IS CHANGE IN THE OBJECTS, THE REGISTRATION WOULD NOT SURVIVE. AFTER SUCH AN EVENT, IF THE INSTI TUTION DOES NOT WANT TO COMMUNICATE THE CHANGES, THE ONLY CONSEQUENCE IS TH AT THE BENEFIT OF REGISTRATION WILL NOT BE AVAILABLE. IT IS NOT NECESS ARY THAT EVERY SOCIETY 8 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT SHOULD BE REGISTERED UNDER THE I.T. ACT. IT CAN FUNC TION WITHOUT GETTING REGISTERED UNDER THE IT ACT. IT IS ONLY WHEN AN INST ITUTION WANTS TO AVAIL EXEMPTION AS CHARITABLE INSTITUTION THAT REGISTRATI ON IS REQUIRED UNDER THE ACT. HE FURTHER HELD THAT MOST OF THE OBJECTIVES WER E AMENDED AND ADDED. NEW OBJECTS WERE ADDED AS INDICATED IN THE OBJECT OF MEMORANDUM 2005, WHICH IS VERY SUBSTANTIAL IN NATURE. HE PARTICULARLY REFERRED CLAUSE (S) OF OBJECT, 2005 TO RECEIVE MONIES AND DONATIONS FROM ANY PERSON/S CLUBS ASSOCIATIONS OR INSTITUTIONS AND TO UTILIZE AND/OR INVEST THE SAME IN ANY MANNER AND FOR ANY PURPOSE AS PER THE DECISION OF T HE EXECUTIVE COMMITTEE. HE FURTHER CONSIDERED THE OBJECT CLAUSE (U), WHICH IS AS UNDER:- TO INVEST MONIES AND FUNDS OF THE ASSOCIATION IN AU THORIZED SECURITIES OR IN ANY WAY AND MANNER AS MAY BE DECIDE D UPON FROM TIME TO TIME. THE LD CIT HELD THAT TWO OBJECTS AT SL. NO. (S) & (U) ARE NOT COVERED BY THE DEFINITION OF CHARITABLE AS PER PROVISIONS OF SEC TION 2(15) OF THE ACT. FURTHER THE ASSESSEE CAN INVEST OR DEPOSIT THE MONE Y AS PER PROVISIONS OF SECTION 11 OF THE ACT ONLY. BUT THE ABOVE CLAUSES O F THE ASSESSEE IN ANY MANNER AND IN ANY WAY AND MANNER AS MAY BE DECIDED UPON FROM TIME TO TIME ARE NOT AS PER PROVISIONS OF THE ACT. HE F URTHER RELIED ON THE 9 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT DECISION OF HONBLE ITAT B BENCH, MUMBAI IN THE CA SE OF BOARD OF CONTROL FOR CRICKET IN INDIA (BCCI), MUMBAI VS ITO IN ITA NO. 1285/MUM/2010 VIDE ORDER DATED 30/03/2012, WHEREIN T HE HONBLE ITAT HAS HELD AS UNDER:- WE ARE OF THE OPINION THAT THE REGISTRATION GRANTED UN DER SECTION 12A, ON 12 TH FEB, 1996, AND THE BENEFITS FLOWING THEREFROM, CANNOT BE EXTENDED TO THE AMENDED OBJECT S OF THE SOCIETY UNLESS THE DIT EXAMINES THE SAME AND COMES T O A CONCLUSION THAT THE REGISTRATION UNDER SECTION 12A, CAN BE EXTENDED TO THE REVISED OBJECTS, MEMORANDUM AND BY- LAWS. IT WOULD BE ILLOGICAL TO HOLD THAT ONCE AN INSTITUTION IS REGISTERED UNDER SECTION 12A, NO MATTER WHATEVER MAY BE THE CHA NGES IN THE OBJECTS, RULES AND REGULATIONS, FOR ANY NUMBER OF TIMES, THE INSTITUTION SHOULD BE GIVEN THE BENEFIT OF SECTION 11 TO 13 OF THE ACT, IN VIEW OF THE ORIGINAL REGISTRATION GRANTED UN DER SECTION 12A. IN OUR OPINION, THE ASSESSEE SOCIETY SHOULD AP PROACH THE REGISTERING AUTHORITY WITH THE CHANGES AND AMENDMENT S SO THAT THE AUTHORITIES COULD EXAMINE AS TO WHETHER THE AMEN DMENTS IN QUESTION MEET THE REQUIREMENT OF LAW.' HE FURTHER OBSERVED THAT ON THE BASIS OF WHICH REGI STRATION WAS GRANTED, HAD BEEN AMENDED AND SOME OBJECTS ARE NOT CHARITABL E IN AMENDED MEMORANDUM, THEREFORE, REGISTRATION SHOULD NOT SURV IVE. THE ASSESSEE CLAIMED BEFORE HIM THAT EVEN IF THERE ARE CERTAIN S UBSTANTIAL AMENDMENTS 10 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT IN OBJECT, THE ASSESSEE DESERVED REGISTRATION CONTI NUE ON THE GROUND THAT THE ACTIVITIES ARE YET CHARITABLE IN NATURE., WHICH WAS ALSO NOT FOUND CONVINCING TO HIM AS BASIS ON WHICH REGISTRATION GRA NTED HAS BEEN CHANGED OR AMENDED BY THE TRUST. THE REGISTRATION GR ANTED TO IT WOULD NOT SURVIVE. IF THE CHANGES MADE IN THE OBJECT, HAS NOT BEEN COMMUNICATED TO THE COMPETENT AUTHORITY. THE ASSESSEE IS NOT ALLOWED TO GET BENEFIT OF REGISTRATION AND IT AUTOMATICALLY ALSO DEEMED CANCE LLED. THEREFORE, THE ASSESSEE HAS TO SEEK A FRESH REGISTRATION ON THE BA SIS OF AMENDED MEMORANDUM OF RULES. 2.3 THE ASSESSEE SUBMITTED BEFORE HIM THAT ITS ACTIV ITIES ARE NOT COMMERCIAL IN NATURE AND THE HONBLE ITAT HAS DECIDE D THAT ON THE BASIS OF COMMERCIAL ACTIVITIES, THE WITHDRAWAL OF REGISTRAT ION IS NOT A GOOD BASIS FOR REJECTION OF REGISTRATION. IT WAS THE MATTER REL ATING TO APPLICATION OF INCOME, WHICH COULD BE EXAMINED ONLY AT THE TIME OF ASSESSMENT. THE LD CIT HELD THAT THESE OBSERVATIONS MADE BY THE ITAT HAS BEEN MODIFIED BY THE HONBLE RAJASTHAN HIGH COURT AND DIRECTED TO TH E ASSESSING OFFICER NOT TO INFLUENCE BY ANY OBSERVATION MADE BY THE APPELLA TE AUTHORITY OR ITAT. 2.4 HE FURTHER HELD THAT ACTIVITY OF THE RCA IS COM MERCIAL IN NATURE, WHERE PROFIT MAKING IS THE PREDOMINANT OBJECT OF THE ACTIVITY, THE TRUST 11 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT WOULD LOSE EXEMPTION AS A CHARITABLE TRUST. IT IS A FACT THAT THE TRUST ACTIVITY IS BEING CARRIED OUT WITH NO PROFIT MOTIVE AND RECEIPTS OF THE TRUST ARE BALANCED WITH THE EXPENDITURE BUT WHATEVER SERVIC E PROVIDED BY THE TRUST IS TO BE VALUED ON THE BASIS OF MARKET RATE. THEN THE ELEMENT OF PROFIT INVOLVED IN CHARGING FOR THE SERVICES AND CO NVERT THE TRUST ACTIVITIES IN PROFITABLE. THE SPORTS ACTIVITIES INCLUDING CRICK ET WOULD BE CHARITABLE ACTIVITY IF IT IS NOT INVOLVED ANY ELEMENT OF TRADE , COMMERCE OR BUSINESS. THE CONDUCT OF CERTAIN ACTIVITIES AND RECEIPTS OF IN COME FROM THESE ACTIVITIES CLEARLY SHOWS THAT THESE ACTIVITIES ARE T OTALLY COMMERCIAL AND THERE IS NO ELEMENT OF CHARITY IN THE CONDUCT OF RC A. HE FURTHER CONSIDERED THE ANNUAL ACCOUNTS FOR F.Y. 2007-08 UNDER THE VARI OUS HEADS AND HELD THAT THE ASSESSEE HAD LET OUT HOSTEL SITUATED NEAR SMS STADIUM ON FOLLOWING CONSIDERATION: THE RCA WILL RECEIVE FEES OF RS. 75,000/- (RUPEES SE VENTY FIVE THOUSANDS ONLY) PER MONTH FROM THE SERVICE PROVIDER AS FOR GRANT OF FACILITIES TO THE SERVICE PROVIDER. THIS SUM SHAL L BE ENHANCED BY @ 15% PER YEAR FOR EACH SUBSEQUENT YEAR. THEREFORE, AGREEMENT MADE BETWEEN RCA AND HOTEL RADIA NT STAR HOSPITALITIES PVT. LTD., JAIPUR IS COMMERCIAL. THERE FORE, THE ASSESSEES REGISTRATION IS LIABLE TO BE WITHDRAWN. 12 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT 2.5 HE FURTHER CONSIDERED THE AMENDED PROVISION OF SECTION 2(15) OF A.Y. 2009-10 AND ONWARD. THE ASSESSEE GOT REGISTRATIO N FROM 1988 BEING CHARITABLE ORGANIZATION ENGAGED IN THE PROMOTION OF SPORTS, WHICH IS LAST LIMB OF DEFINITION OF CHARITABLE PURPOSE GIVEN U/S 2(15) OF THE ACT. HE FURTHER ANALYSED THE ANNUAL ACCOUNT FOR THE F.Y. 20 07-08 UNDER THE VARIOUS HEADS AND FOUND THAT MOTIVE OF RCA IS PROFI T MAKING. THEREFORE, HE WITHDREW THE REGISTRATION GRANTED W.E.F. A.Y. 2009- 10 AND ONWARDS. THE MAIN AND PREDOMINANT OBJECT OF ANY ORGANIZATION IS FOUND, IT WOULD LOSE THE STATUS OF CHARITABLE ORGANIZATION. IT IS A FUNDAMENTAL PRINCIPLE OF CHARITABLE ORGANIZATION. ACCORDINGLY, THE RCA WOULD NOT BE EXEMPTED U/S 11 AS IT IS CARRYING OUT COMMERCIAL ACTIVITIES. FIN ALLY, THE LD CIT HAS WITHDRAWN THE REGISTRATION NO. 12AA(3) OF THE ACT FRO M A.Y. 2005-06 ONWARDS. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT IT THE SECOND ROUND BEFORE THE H ONBLE ITAT. THE ASSESSEE IN REMAND PROCEEDINGS HAD FILED DETAILED R EPLY. THERE WAS A CHANGE IN THE OBJECT DUE TO CHANGE MADE IN THE RAJA STHAN SPORTS (REGISTRATION, RECOGNITION AND REGULATION OF ASSOCI ATION) ACT, 2005 AND WAS NOT VOLUNTARY CHANGE. BASICALLY NEW LAW WAS IN FORC E BUT THE ASSESSEES CHARACTER AS IT REMAINED SPORTS BODY EN GAGED IN PROMOTION OF 13 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT CRICKET AND FURTHER AMENDED OBJECTS DID NOT MAKE AS SESSEES OBJECTS ANY WHERE NON-CHARITABLE. ALL ALONG ASSESSEES ACTIVITIE S HAVE REMAINED INTRA VIRES AND NOT ULTRA VIRES EVEN AFTER CONSIDERING TH E AMENDED OBJECTS OF THE ASSESSEE, THE ASSESSEES ACTIVITIES ARE CHARITABLE. THE LD AR FURTHER RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF MOOL CHAND KHAIRATI TRUST 377 ITR 650 WHEREIN THE HON'BLE HIGH C OURT CONSIDERED THE ISSUE OF FOLLOWING ANY OTHER SYSTEM OF MEDICINE FOR IMPROVING THE AYURVEDIC SYSTEM OF MEDICINE AND RUNNING AN ALLOPAT HIC HOSPITAL. THE HON'BLE HIGH COURT HAS HELD THAT THE ASSESSEE HAD A PPLIED ITS INCOME FOR THE PURPOSE OF OTHER THAN ITS OBJECTS, WHICH WAS THE BASE OF HOLDING THAT THE TRUST IS NOT CHARITABLE. A PLAIN READING OF OBJ ECT INDICATES THAT IT INCLUDES DEVISING MEANS FOR IMPARTING EDUCATION AN D IMPROVING AYURVEDIC SYSTEM OF MEDICINE AND PREACHING THE SAME. HE FURT HER RELIED ON THE DECISION IN THE CASE OF LAKSHMANASWAMI MUDALIAR VS L IC, AIT 1963 SC 1185 WHEREIN THE HON'BLE SUPREME COURT HAS HELD THA T POWER TO CARRY OUT AN OBJECT, UNDOUBTEDLY INCLUDES POWER TO CARRY OUT WH AT IS INCIDENTAL OR CONDUCIVE TO THE ATTAINMENT OF THAT OBJECT, FOR WHIC H EXTENSION MERELY PERMITS SOMETHING TO BE DONE WHICH IS CONNECTED WITH THE OBJECTS TO BE ATTAINED, AS BEING NATURALLY CONDUCIVE THERETO. THE LD AR FURTHER ARGUED THAT MERELY BECAUSE AMENDMENT IN OBJECT IS MADE, WH ICH HAS NEITHER 14 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT ALTERNATE THE CHARACTER OF ASSOCIATION NOR THE SAID CHANGE HAS MADE ITS PRINCIPAL OBJECTS AS NON-CHARITABLE IN NATURE, SO R EVOCATION ON SAID GROUND IS PLAINLY BAD. THE ISSUE INVOLVED IS NO LONGER RES- INTEGRA AND IS SQUARELY COVERED IN ASSESSEES FAVOUR BY FOLLOWING DIRECT DEC ISION OF HONBLE MUMBAI ITAT B BENCH IN THE CASE OF BHANSALI TRUST WH EREIN THE HONBLE TRIBUNAL HELD THAT NOT INTIMATING THE AMENDED OBJECT IN THE TRUST DEED TO THE DEPARTMENT CANNOT IPSO FACTO LEAD TO CANCELLATI ON OF REGISTRATION BECAUSE THE STATUTORY REQUIREMENT OF CANCELLATION O F REGISTRATION CONTAINED IN SECTION 12AA(3) OF THE ACT. HE FURTHER RELIED ON THE FOLLOWING CASE LAWS:- (I) SHRI SANMUKHANANDA FINE ARTS & SANGEETHA SABHA IN ITA NO. 1849/MUM/2011 ORDER DATED 09/09/2011 (MUM TRIB) (II) M/S KRUPANIDHI EDUCATIONAL TRUST IN ITA NO. 86/ BANG/2012 ORDER DATED 14/09/2012 (BANG TRIB). (III) TAMILNADU CRICKET ASSOCIATION VS DIT (E) (2013) 40 TAXMANN.COM 250/360 ITR 633 (MAD). (IV) DELHI & DISTRICT CRICKET ASSOCIATION VS. DIT(E) 38 ITR (TRIB) 326 (ITAT DEL). (V) PUNJAB CRICKET ASSOCIATION IN ITA NO. 834/CHD/2 012 ORDER DATED 19/10/2015. (VI) ALL INDIA FOOTBALL FEDERATION IN ITA NO. 6352/ DEL/2013 ORDER DATED 23/09/2015 (ITAT DEL). 15 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT (VII) GUJARAT CRICKET ASSOCIATION IN ITA NO. 93/AHD /2011 ORDER DATED 31/01/2012 (ITAT AHD.) THEREFORE, VARIOUS HON'BLE HIGH COURTS INCLUDING HON BLE TRIBUNALS HAD REJECTED THE REVENUE APPEALS MADE U/S 2(15) IN IDEN TICAL CASES OF VARIOUS CRICKET ASSOCIATIONS. HE FURTHER RELIED ON A RECENT DECISION OF HONBLE ITAT C BENCH, KOLKATA IN THE CASE OF THE TECHNOLOGICAL I NSTITUTE OF TEXTILE VS DIRECTOR OF INCOME TAX, EXEMPTION, KOLKATA IN ITA NO . 689 & 690/KOL/2011 ORDER DATED 18/03/2016 WHEREIN THE CANC ELLATION OF REGISTRATION U/S 12AA(3) OF THE ACT AND CANCELLATIO N OF GRANT OF CERTIFICATE U/S 80G(5)(VI) HAS BEEN CONSIDERED AND HELD THAT RE GISTRATION GRANTED U/S 12A OF THE ACT CANNOT BE WITHDRAWN OR CANCELLED BY T HE DIT BY INVOKING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT. SECT ION 12AA(3) EMPOWERS THE DIT TO CANCEL THE REGISTRATION GRANTED U/S 12A I F HE SATISFIED THAT ACTIVITIES OF THE TRUST ARE NOT GENUINE OR ARE NOT B EING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF TRUST OR TRUSTS AS THE CASE MAY BE. THEREFORE, HE PRAYED TO ALLOW THE ASSESSEES APPEAL. 4. AT THE OUTSET, THE LD CIT DR HAS VEHEMENTLY SUPPO RTED THE ORDER OF THE LD CIT AND ARGUED THAT THE RCAS ACTIVITIES ARE COMMERCIAL AND BY CONSIDERING THE AMENDED PROVISIONS OF SECTION 2(15) , THE ACTIVITIES OF THE 16 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT TRUST ARE IN NATURE OF COMMERCIAL, TRADE AND BUSINE SS AND ELEMENT OF PROFIT IS INVOLVED. THEREFORE, THE ASSESSEES APPEAL MAY PL EASE BE DISMISSED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS UNDISPU TED FACT THAT THE ASSESSEE WAS GRANTED REGISTRATION U/S 12A ON 25/11/1988, WHICH HAS BEEN WITHDRAWN TWICE BY THE LD CIT. THE ISSUE HAS BEEN SET AS IDE BY THE COORDINATE BENCH TO RECONSIDER THE WITHDRAWN OF REGIS TRATION, WHICH WAS ALSO CHALLENGED BY THE REVENUE BEFORE THE HON'BLE R AJASTHAN HIGH COURT, WHO HAS ALLOWED THE ASSESSEES PRAYER AND DIRECTED TO CONSIDER THE APPLICATION AFRESH WITHOUT INFLUENCING ANY OF THE OB SERVATION MADE BY THE APPELLATE AUTHORITY. THE ASSESSEE HAS BEEN PROVIDED REASONABLE OPPORTUNITY OF BEING HEARD BY THE LD CIT. THE ASSESSE E TRUST MADE IT CLEAR THAT THIS AMENDMENT IN OBJECT OF MEMORANDUM IN 2005 WAS DUE TO CHANGE MADE IN THE RAJASTHAN SPORTS (REGISTRATION, RECOGNI TION AND REGULATION OF ASSOCIATION) ACT, 2005. THE AMENDED OBJECTS WERE NOT VOLUNTARY CHANGE. THE ASSESSEE HAS TO FOLLOW THE SAID LAWS RELATED TO SP ORTS ACTIVITIES. THE COMPARISON GIVEN BY THE LD CIT IN HIS ORDER DATED 28 /03/2013 DOES NOT SHOW ANY FUNDAMENTAL DEVIATION FROM THE ORIGINAL CHA RITABLE ACTIVITIES TO NON-CHARITABLE ACTIVITIES. THE ASSESSEES OBJECT TO PROMOTE THE CRICKET IN 17 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT THE STATE BY PROVIDING/INVOLVING VARIOUS ACTIVITIES AT THE DISTRICT LEVEL TO STATE LEVEL THROUGH COACHING PROVIDED BY COACHES, G ROUND AND FACILITIES ETC. THEREFORE, THE ASSESSEES ACTIVITIES ARE CHARIT ABLE. THE OTHER ACTIVITIES ARE INCIDENTAL OR CONDUCIVE OF THE MAIN ACTIVITY. TH E CASE LAWS REFERRED BY THE ASSESSEE PARTICULARLY THE HON'BLE DELHI HIGH CO URT DECISION IN THE CASE OF MOOL CHAND KHAIRATI TRUST (SUPRA) IS SQUARELY APP LICABLE AS THE ASSESSEE AMENDED THE PROVISIONS, DOES NOT CHANGE THE CHARACT ER OF THE ASSESSEE FROM CHARITABLE TO NON-CHARITABLE OR COMMERCIAL. AT THE TIME OF REGISTRATION, THE LD CIT HAS TO CONSIDER SECTION 12A A(3) AND HE HAS TO CONSIDER TWO CONDITIONS FOR REJECTION OF REGISTRATIO N GRANTED (I) THE ACTIVITIES OF THE TRUST ARE NOT GENUINE, (II) ARE N OT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT OF THE TRUST AS THE CASE MAY BE. THE LD CIT HAS NOT FOUND ANY INFIRMITY IN THE ACTIVITIES CARRIED O UT BY THE RCA AS NON- GENUINE OR NOT BEING CARRIED OUT AS PER OBJECT OF T HE TRUST. IT IS ALSO A FACT THAT THE GAME OF CRICKET BECOME VERY POTENTIAL WITH REFERENCE TO REVENUE COMPARED TO OTHER GAMES, THEREFORE, THE REVENUE GEN ERATED BY THE RCA ARE SUBSTANTIAL BUT THIS GROUND CANNOT BE USED TO C ANCEL THE REGISTRATION GRANTED BY THE LD CIT AS PREDOMINANT OBJECT OF THE T RUST IS CHARITABLE AND SUBSTANTIAL REVENUE GENERATED IS INCIDENTAL TO THE MAIN OBJECT. IF, THE LD ASSESSING OFFICER FOUND ANY VIOLATION IN APPLICATIO N OF FUND, HE CAN MAKE 18 ITA NO. 544/JP/2013 M/S RAJASTHAN CRICKET ASSOCIATION VS CIT DISALLOWANCE U/S 11 OF THE ACT. THUS, WE ARE OF THE C ONSIDERED VIEW THAT THE LD CIT WAS NOT RIGHT IN WITHDRAWING THE REGISTRATIO N GRANTED U/S 12A OF THE ACT. ACCORDINGLY, THE ASSESSEES APPEAL IS ALLO WED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/06/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09 TH JUNE, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S RAJASTHAN CRICKET ASSOCIATION, JA IPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE CIT-1, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 544/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR