Saurashtra Cricket Association, RAJKOT-GUJARAT V. The Commissioner of Income Tax, Rajkot-2, RAJKOT-GUJARAT

ITA 64/RJT/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72626 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-10-2013
• Assessment Year: misc
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA DR
• Assessee Lawyers: TUSHAR P HEMANI
• Keywords: Charitable institution; Maximum Marginal Rate
• Section: 12; 11; 12A; 12AA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT .. .. BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. S RIVASTAVA AM ITA NO. 64/RJT/2013 SAURASHTRA CRICKET ASSOCIATION, RAJKOT PAN : AAAAS 2360 J ( / APPELLANT) THE COMMISSIONER OF INCOME TAX, RAJKOT-2, RAJKOT / RESPONDENT !' / ASSESSEE BY SHRI TUSHAR P HEMANI, ADVOCATE #$ !' / REVENUE BY DR. M. L. MEENA, DR ! % $& ' / DATE OF HEARING 01.10.2013 () ' / DATE OF PRONOUNCEMENT 25.10.2013 / ORDER .. , / T. K. SHARMA, J. M. : THIS APPEAL BY THE ASSESSEE-TRUST IS AGAINST THE ORDER DATED 28.01.2013 OF THE COMMISSIO NER OF INCOME-TAX, RAJKOT-2, RAJKOT U/S 12AA(3) OF THE INCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-TRUST WAS CREATED AND INSTITUTED FOR THE PROMOTION AND DEVELOPMENT OF SPORTS IN SAURASHTRA R EGION. THE COMMISSIONER OF INCOME-TAX, AFTER DULY CONSIDERING THE OBJECTS OF THE ASSESSEE-TRUST AND GENUINENESS OF ITS ACTIVITIES, HAS GRANTED THE REGISTRATION OF TRUST U/S 12A OF THE INCOME-TAX ACT VIDE ITS ORDER NO.CIT-R/65-5/138/87-88 DATED 05.05.1989. SUBSEQUENTLY, IN THE IMPUGNED ORDER DATED 28.01.2013, THE COMMISSIONER OF INCOME- TAX, RAJKOT-2, RAJKOT CANCELLED THE REGISTRATION OF THE ASSESSEE-TRUST BY INVOKING PROVISIONS OF SECTION 12AA(3) OF THE INCOME-TAX ACT BY OBSERVING THAT THE TRUST HAS ARRA NGED ONE DAY INTERNATIONAL MATCHES OF CRICKET AND IN TURN HAS RECEIVED TV SUBSIDY/SUBV ENTION INCOME I.E. SHARING OF TV BROADCASTING RIGHT INCOME FROM BCCI AND ADVERTISEME NT SALES INCOME. THEREFORE, THE LD CIT IS OF THE VIEW THAT THE ASSESSEE-TRUST HAD C ARRIED OUT THE ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSINESS IN VIEW OF THE FIRST PROVISO TO SECTION 2(15) OF THE INCOME-TAX ACT AND THEREFORE, THE OBJECT OF THE ASS ESSEE-TRUST ARE NO LONGER OF CHARITABLE IN NATURE. AGGRIEVED WITH THIS IMPUGNED ORDER DATED 28.01.2013 OF CIT, RAJKOT-2, RAJKOT, THE ASSESSEE-TRUST IS NOW IN APPE AL BEFORE THIS TRIBUNAL, ON THE FOLLOWING GROUNDS:- 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 2 1. THE LD. CIT HAS ERRED BOTH IN LAW AND ON THE FA CTS OF THE CASE IN CANCELLING REGISTRATION OF TRUST U/S 12AA(3) OF THE ACT AFTER HOLDING THAT THE ACTIVITIES CARRIED OUT BY THE APPELLANT-TRUST ARE I N THE NATURE OF TRADE, COMMERCE OR BUSINESS AND IN VIEW OF AMENDED PROVISIONS OF S 2(15) OF THE ACT. 2. THE LD. CIT HAS ERRED BOTH IN LAW AND ON THE FAC TS OF THE CASE IN NOT APPRECIATING THE SCHEME OF THE ACT WHEREBY HE IS EM POWERED TO CANCEL REGISTRATION OF TRUST ONLY UNDER PROVISIONS OF S. 1 2AA(3) OF THE ACT AND THAT ALSO AFTER RECORDING A SATISFACTION ONLY IN TWO CIRCUMST ANCES VIZ. (A) THE ACTIVITIES OF THE TRUST ARE NOT GENUINE OR (B) THE ACTIVITIES OF THE TRUST ARE NOT CARRYING OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. IN THE FA CTS OF THE PRESENT CASE NONE OF THESE TWO CONDITIONS ARE SATISFIED AND THEREFORE TH E ACTION OF LD. CIT IS PATENTLY ILLEGAL AND WITHOUT JURISDICTION. 3. THE LD. CIT HAS ERRED BOTH IN LAW AND ON THE FAC TS OF THE CASE IN NOT FOLLOWING THE BINDING DECISION OF JURISDICTIONAL IT AT IN THE CASE OF GUJARAT CRICKET ASSOCIATION VS. DIT (EXEMPTION) (ITA NO.93/ AHD/2011) WHICH WAS CITED AND RELIED UPON IN THE PROCEEDINGS BEFORE HIM. 4. UNDER THE CIRCUMSTANCES AND FACTS OF THE CASE, T HE ACTION OF THE LD CIT IN CANCELLING THE REGISTRATION IS BEYOND HIS POWER AND JURISDICTION, AND THEREFORE THE SAME IS REQUIRED TO BE TREATED AS NULL AND VOID AND BE QUASHED ACCORDINGLY. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI TUSHAR P HEMANI, ADVOCATE APPEARED AND CONTENDED THAT AS PER PROVISIONS CONTAINED IN SUB- SECTION 3 OF SECTION 12AA OF THE ACT, THE REGISTRAT ION GRANTED TO THE TRUST CAN BE CANCELLED BY THE CIT IF THE FOLLOWING TWO CONDITION S ARE SATISFIED:- A) THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE N OT GENUINE; OR B) THE ACTIVITIES OF THE TRUST OR INSTITUTION ARE N OT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION. 4. THE LD COUNSEL OF THE ASSESSEE ALSO POINTED OUT THAT SECTION 12AA(3) OF THE ACT DOES NOT EXTEND THE POWER TO CIT FOR RE-EXAMINATION OF THE OBJECTS OF THE TRUST OR INSTITUTION ONCE REGISTRATION HAS BEEN GRANTED U/S 12A OF THE ACT. THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT THE INSERTION OF FIRST PROV ISO TO SECTION 2(15) WITH EFFECT FROM 01.04.2009 WOULD NOT HAVE ANY BEARING ON SECTION 12 AA(3) SINCE IT DOES NOT EXTEND TO THE OBJECTS OF THE TRUST OR INSTITUTION BUT ONLY TO ITS ACTIVITIES AS STATED THEREIN. HE FURTHER SUBMITTED THAT, IN THE PRESENT CASE, THE ASSESSEE-T RUST WAS INSTITUTED FOR THE PROMOTION OF GAME OF CRICKET IN SAURASHTRA AND KUTCH AND THRO UGHOUT FROM ITS GETTING REGISTRATION OF TRUST FROM 1989 TO TILL TODAY AND THE SAID ACTIV ITIES OF THE ASSESSEE-TRUST HAS BEEN TREATED AS GENUINE AND CHARITABLE ACTIVITIES AND EX EMPTION HAS ALWAYS BEEN GRANTED TO THE ASSESSEE-TRUST U/S 11 AND 12 OF THE ACT. HE FUR THER SUBMITTED THAT THERE IS NO 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 3 CHANGE IN THE OBJECTS FOR WHICH THE TRUST WAS INSTI TUTED IN AS MUCH AS GENUINENESS OF THE ACTIVITIES HAVE NEVER BEEN QUESTIONED AND DOUBT ED. HE ALSO POINTED OUT THAT MERELY BECAUSE OF INSERTION OF FIRST PROVISO TO SEC TION 2(15) OF THE ACT, THE ACTIVITIES OF THE ASSESSEE-TRUST CANNOT BE TREATED AS NON-GENUINE . TO SUM-UP, THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT NOWHERE IN THE IMPUGNED ORD ER U/S 12AA(3) THE LD CIT JUDICIOUSLY SATISFIED THAT ANY OF THE TWO CONDITION S TO CANCEL THE REGISTRATION FULFILLED AND THEREFORE THE ACTION OF THE LD CIT IN CANCELLING TH E REGISTRATION IS BEYOND HIS JURISDICTION. 5. CONTINUING HIS ARGUMENT, THE LD COUNSEL OF THE A SSESSEE, POINTED OUT THAT THE CONTROVERSY INVOLVED IN THIS APPEAL IS DIRECTLY COV ERED BY THE DECISION OF THE CO- ORDINATE BENCH OF AHMEDABAD TRIBUNAL IN THE CASE OF GUJARAT CRICKET ASSOCIATION VS. DIT (EXEMPTION) BEARING ITA NO.93/AHD/2011 ( COPY OF THE SAME PLACED ON RECORDS), WHEREIN ALSO THE REGISTRATION WAS CANCELL ED IN VIEW OF FIRST PROVISO TO SECTION 2(15) OF THE ACT BY THE COMMISSIONER. RELIANCE WAS ALSO PLACED ON THE DECISION OF ITAT, NAGPUR BENCH IN THE CASE OF VIDARBHA CRICKET ASSOCIATION VS. CIT BEARING ITA NO.3/NAG./2010 (RELEVANT EXTRACT OF WHICH IS REPROD UCED IN THE ORDER OF GUJARAT CRICKET ASSOCIATION (SUPRA), WHEREIN ALSO THE REGISTRATION WAS CANCELLED IN VIEW OF FIRST PROVISO TO SECTION 2(15) OF THE ACT BY THE COMMISSIONER, BU T THE TRIBUNAL IN BOTH THE AFORESAID CASES REVERSED THE VIEW OF LD CIT IN CANCELLING THE REGISTRATION U/S 12AA(3) OF THE INCOME-TAX ACT. THE LD COUNSEL OF THE ASSESSEE ALS O PLACED ON RECORD THE FOLLOWING DECISIONS OF THE CO-ORDINATE BENCHES OF ITAT, WHERE IN IT HAS BEEN HELD THAT UNTIL AND UNLESS CONDITIONS LAID DOWN U/S 12AA(#) ARE NOT SAT ISFIED, REGISTRATION OF TRUST CANNOT BE CANCELLED:- (A) GUJARAT INDUSTRIAL SECURITY FORCE SOCIETY VS. D IT (EXEMPTION), AHMEDABAD BEARING ITA NO.902/AHD/2010 (B) AHMEDABAD URBAN DEVELOPMENT AUTHORITY VS. DIT ( EXEMPTION) BEARING ITA NO.754/A/2010 (C) GUJARAT MARITIME BOARD VS. THE ACIT BEARING ITA NO.36/AHD/2011 (D) BOMBAY PRESIDENCY GOLF CLUB LTD VS. DIT (EXEMPT ION) [149 TTJ 471(MUM.)] 6. WITH REGARD TO THE ACTIVITIES CARRIED OUT BY THE ASSESSEE-TRUST, THE LD COUNSEL OF THE ASSESSEE POINTED OUT THAT THOSE ACTIVITIES ARE CHARITABLE IN NATURE AND NOT IN THE NATURE OF TRADE, COMMERCE OR BUSINESS IN VIEW OF AM ENDED PROVISIONS OF SECTION 2(15) 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 4 OF THE ACT, BECAUSE THE ENTIRE ISSUE HAS TO BE SEEN FROM THE TWO LIMBS OF THE PROVISIONS OF SECTION 2(15) OF THE ACT VIZ.;- A) WHETHER THE PROMOTION OF SPORTS AND GAMES, CRIC KET IN THE PRESENT CASE, IS CHARITABLE OR NOT WITHIN THE DEFINITION AS PROVIDED U/S 2(15) OF THE ACT AND B) WHETHER SUCH PROMOTION OF SPORTS AND GAMES OF CR ICKET ARE CARRIED OUT IN THE PROFIT-MOTIVE OR NOT SO TO BE TREATED AS IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS OR CHARITABLE PURPOSE. WITH REGARD TO THE FIRST LIMB AS MENTIONED IN (A) A BOVE, THE LD COUNSEL OF THE ASSESSEE-TRUST, INVITED OUR ATTENTION TO THE CIRCUL AR NO.395 [F. NO.181(5) 82/IT(A-I)], DATED 24-09-1984 WHEREIN THE BOARD HAS ADVISED THAT PROMOTION OF SPORTS AND GAMES IS CONSIDERED TO BE A CHARITABLE PURPOSE WITHIN THE MEANING OF SECTION 2 (15) OF THE ACT. WITH REGARD TO THE SECOND LIMB AS MENTIONED I N (B) ABOVE, THE LD COUNSEL OF THE ASSESSEE-TRUST SUBMITTED THAT THE LAW IS SETTLED BY THE LARGER BENCH OF SUPREME COURT IN THE CASE OF ACIT VS. SURAT ART SILK CLOTH MANUFA CTURERS ASSOCIATION REPORTED IN 121 ITR 1 (SC) THAT (I) THE PRIMARY OR DOMINANT PURPOSE OF THE TRUST OR INSTITUTION HAS TO BE EXAMINED TO DETERMINE WHETHER THE SAID TRUST/INSTIT UTION IS INVOLVED IN CARRYING OUT ANY ACTIVITY FOR THE PROFIT AND (II) IF THE OBJECT OF THE TRUST OR INSTITUTION IS TO CARRY OUT OBJECT OF GENERAL PUBLIC UTILITY AND THIS IS THE PRIMARY O R DOMINANT PURPOSE AND NOT CARRYING ON ANY ACTIVITY FOR PROFIT, THE SAME WOULD SATISFY THE REQUIREMENTS OF SECTION 2(15) OF THE ACT. 7. IT WAS FURTHER SUBMITTED BY THE LD COUNSEL OF TH E ASSESSEE THAT THE FIRST PROVISO TO SECTION 2(15) OF THE ACT SHOULD NOT GENERALIZED TO EACH AND EVERY FACTS OF THE CASE WHERE THERE IS A SURPLUS OVER THE EXPENDITURE IN RE SPECT OF THE ACTIVITIES OR OBJECTS CARRIED OUT BY THE TRUST WHICH ARE IN ANY CASE OF T HE CHARITABLE PURPOSE. HE ALSO SUBMITTED THAT THE CARDINAL PRINCIPLE IS THE PREDOM INANT OBJECT OF THE TRUST AND IF THE PREDOMINANT OBJECT OF THE TRUST IS OF CHARITABLE NA TURE AND WITH NO-PROFIT MOTIVE, THE SAID ACTIVITIES CANNOT BE TREATED AS TRADE, COMMERC E OR BUSINESS MERELY BECAUSE SOME SURPLUS HAS REMAINED LEFT OVER THE EXPENDITURE TO CARRY OUT SUCH ACTIVITIES. THE LD COUNSEL OF THE ASSESSEE ALSO POINTED THAT EVEN A FTER THE INSERTION OF PROVISO TO SECTION 2(15) OF THE ACT, THE FOLLOWING AUTHORITIES , AFTER FOLLOWING THE LAW LAID DOWN BY APEX COURT IN SURAT ART SILK (SUPRA), HAVE TAKEN A VIEW THAT IF THE PREDOMINANT OBJECT OF THE TRUST IS OF CHARITABLE NATURE AND WITH NO-PROFI T MOTIVE, THE SAID ACTIVITIES CANNOT BE 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 5 TREATED AS TRADE, COMMERCE OR BUSINESS MERELY BECAU SE SOME SURPLUS HAS REMAINED LEFT OVER THE EXPENDITURE TO CARRY OUT SUCH ACTIVIT IES: A) BOMBAY PRESIDENCY GOLF CLUB LTD VS DIT (EXEMPT ION) REPORT IN 149 TTJ 471 B) INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA VS DGIT REPORTED IN 349 ITR 99 C) SABARMATI ASHRAM GAUSHALA TRUST VS ADIT (EXEMP TION) BEARING ITA NO.670/AHD/2013 8. THE LD COUNSEL OF THE ASSESSEE FURTHER PLEADED T HAT, IN THE PRESENT CASE, THE MAIN OBJECT OF THE TRUST IS TO PROMOTE AND ENCOURAG E THE GAME OF CRICKET IN SAURASHTRA AND KUTCH BY ORGANIZING COACHING SCHEMES, TOURNAMEN TS, EXHIBITION MATCHES AND OTHER MATCHES ETC. THE ATTENTION IS FURTHER INVITED TO THE CLAUSE 3(J) OF MOA WHICH PROVIDES TO ORGANIZE MATCHES FOR THE ACHIEVEMENTS OF THE OB JECTS OF THE ASSOCIATION AND UTILIZE THE NET PROCEEDS THEREOF TO WARDS THE IMPLEMENTATION OF THE OBJECT SET THEREIN. IT IS SUBMITTED THAT ALL THE RECEIPTS ARISING OR A CCRUING TO THE ASSESSEE-TRUST ARE ON ACCOUNT OF THE ACTIVITIES CAR RIED OUT TO MEET THE OBJECT OF THE ASSESSEE-TRUST I.E. TO PROMOTE AND ENCOURAGE THE GA ME OF CRICKET IN SAURASHTRA AND KUTCH BY ORGANIZING COACHING SCHEMES, TOURNAMENTS, EXHIBITION MATCHES AND OTHER MATCHES ETC, AND THEY ARE NOT WITH THE INTENTION TO CARRY OUT ANY TRADE, COMMERCE OR BUSINESS WITH PROFIT-MOTIVE. SUCH RECEIPTS SHOULD B E STRICTLY CONFINED TO THE ATTAINMENT OF THE OBJECTS OF THE ASSESSEE-TRUST AND WITH NO IN TENTION TO CARRY OUT ANY TRADE, COMMERCE OR BUSINESS. 9. WITH REGARD TO THE DECISION OF ITAT, MUMBAI BENC H IN THE CASE OF MUMBAI CRICKET ASSOCIATION VS. DIT (EXEMPTION, 138 ITD 338 ) RELIED UPON BY THE LD CIT IN THE IMPUGNED ORDER; THE COUNSEL OF THE ASSESSEE POINTED OUT THAT THE SAME IS DISTINGUISHABLE BECAUSE IN THAT CASE IT WAS FOUND T HAT (A) MUMBAI CRICKET ASSOCIATION ENTERED INTO AN AGREEMENT WITH ANOTHER PARTY FOR RU NNING ACTIVITIES SUCH AS RESTAURANTS, BAR, BANQUET HALLS, ETC APART FROM CRICKET ACADEMY AND (B) THE LAND WAS ALLOTTED BY MMRDA TO ASSESSEE STRICTLY FOR NON-COMMERCIAL ACTIV ITY, WHICH WAS VIOLATED BY THE PLANNING, EXECUTING THE ACTIVITY OF RECREATION CENT RE. WHEREAS, IN THE PRESENT CASE, NEITHER SUCH COMMERCIAL ACTIVITIES HAVE BEEN CARRIE D OUT BY THE ASSESSEE-TRUST NOR ANY VIOLATION HAS BEEN MADE BY THE ASSESSEE-TRUST; ON T HE CONTRARY, THE ASSESSEE-TRUST CARRIES OUT ALL THE ACTIVITIES IN ACCORDANCE WITH T HE OBJECTS OF THE ASSESSEE-TRUST ONLY. THEREFORE, HE POINTED OUT THAT, THE RATIO LAID DOWN BY THE ITAT, MUMBAI BENCH IN THE 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 6 CASE OF MUMBAI CRICKET ASSOCIATION VS. DIT (SUPRA) IS NOT APPLICABLE IN THE PRESENT CASE. 10. ON THE OTHER HAND, DR. M. L. MEENA, DR APPEARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD CIT IN CANCELL ING THE REGISTRATION U/S 12AA(3) OF THE INCOME-TAX ACT. THE LD DEPARTMENTAL REPRESENTAT IVE RELIED UPON ON THE OF ITAT, CHENNAI BENCH B DATED 22.02.2013 IN THE CASE OF T AMIL NADU CRICKET ASSOCIATION V. DIT (EXEMPTIONS) AND CONTENDED THAT BY FINANCE ACT, 2012 W.E.F. 01.04.2009, THE LEGISLATURE MADE A SPECIFIC PROVISION BY INSERTING SUB-SECTION (8) TO SECTION 13 OF THE INCOME-TAX ACT, 1961 THAT WHEREVER THE FIRST PROVIS O TO THE SECTION 2(15) OF THE INCOME- TAX ACT, 1961 IS APPLICABLE, THE TRUST DOES NOT BEC OME LIABLE FOR EXEMPTION OF ITS INCOME U/S 11 AND 12 OF THE INCOME-TAX ACT, 1961. S INCE IN THE CASE OF THE TRUST, THE FIRST PROVISO IS CLEARLY APPLICABLE, THE TRUST IS N OT LIABLE FOR EXEMPTION U/S 11 AND 12 OF THE INCOME-TAX ACT, 1961. SINCE THE INCOME OF THE T RUST WOULD NOT BE EXEMPTED AB- INITIO, THERE IS NO REQUIREMENT TO CONTINUE THE REG ISTRATION IN PERPETUITY. 11. IN SUPPORT OF THIS, THE LD DEPARTMENTAL REPRESE NTATIVE RELIED UPON PARAGRAPH 11 OF MUMBAI BENCH OF ITAT IN THE CASE OF MUMBAI CRICK ET ASSOCIATION VS DIT (EXEMPTION) [2012], WHEREIN THE ITAT HELD THAT BY V IRTUE OF POWER U/S 12AA(3) OF THE INCOME-TAX ACT, 1961 THERE IS NO BAR ON REVIEW OF ACTIVITIES OF THE ASSO CAITON. THE COMMISSIONER CAN REVIEW THE ACTIVITIES OF THE A SSOCIATION AT ANY GIVEN POINT OF TIME AND CAN CANCEL THE REGISTRATION. 12. THE LD DEPARTMENTAL REPRESENTATIVE ALSO DREW OU R ATTENTION TO THE FOLLOWING PARAGRAPHS OF THE DECISION OF ITAT, CHENNAI BENCH I N THE CASE OF TAMIL NADU CRICKET ASSOCIATION VS. DIT (EXEMPTIONS) (SUPRA):- 12.1 IN PARAGRAPH 53 OF THE AFORESAID DECISION OF ITAT, CHENNAI BENCH, IT HAS BEEN DISCUSSED THE PATTERN OF THE RECEIPTS ACCOUNTE D BY THE ASSESSEE, SHOWS THAT THE REVENUE IS GENERATED FROM ADVERTISEMENT AND SPECIAL EVENTS LIKE IPL MATCHES, CELEBRITY MATCHES, ETC. THESE ARE ALL COMMERCIAL ACTIVITIES . THEREFORE, IT IS CRYSTAL CLEAR THAT EVEN THOUGH CRI CKET MATCHES ARE CONDUCTED BY THE ASSESSEE, THEY ARE NOT CONDUCTED IN ACCORDANCE WITH THE OBJECTS. 12.2 IN PARAGRAPH 54 OF THE AFORESAID DECISION, IT HAS BEEN DISCUSSED THAT IT IS NECESSARY FOR THE PURPOSE OF SECTION 2(15) THAT THE OBJECTS ARE CARRIED OUT NOT ONLY IN THEIR PHYSICAL ASPECT BUT ALSO IN THEIR CON CEPTUAL FRAMEWORK, SO AS TO CLAIM THE BENEFIT OF REGISTRATION UNDER SECTION 12A A. IN THE PRESENT CASE, THE CONCEPTUAL FRAMEWORK HAS NOT BEEN FOLLOWED. 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 7 12.3 IN PARAGRAPH 55 OF THE ABOVE SAID DECISION OF ITAT, CHENNAI BENCH, IT HAS BEEN DISCUSSED THAT THE DIT (EXEMPTIONS) HAS CL EARLY STATED THAT THE ACTIVITIES OF THE ASSOCIATION ARE NOT IN THE NATURE OF ACTIVITIES FOR ADVANCEMENT OF ANY OBJECT OF GENERAL PUBLIC UTILITY. BUT THE ACTIV ITIES INVOLVE CARRYING ON ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY OTHER ACTIVITY OF RENDERING ANY SERVICE FOR A CESS OR FEE. THEREFORE, IT IS CLE AR THAT THE FIRST PROVISO INSERTED UNDER SECTION 2(15) HITS THE CASE OF THE ASSESSEE. 12.4 IN PARAGRAPH 56 OF THE AFORESAID DECISION, ITA T CHENNAI BENCH HAS DISCUSSED THAT THERE CANNOT BE A CONFLICT BETWEEN T HE FIRST PROVISO INSERTED UNDER SECTION 2(15) AND THE CONDITIONS LAID DOWN IN SECTION 12AA(3) FOR CANCELLING THE REGISTRATION. IF THERE IS A CONFLICT BETWEEN THE TWO, THE LAW STATED IN THE PROVISO WILL BE DEFEATED. SO ALSO, THE LAW S TATED IN SECTION 12AA(3) WILL BE DEFEATED. THEREFORE, WHEN THE ASSESSEE IS HIT BY TH E PROVISO TO SECTION 2(15), ITS CONSEQUENTIAL REFLECTION IS AUTOMATIC ON SECTION 12AA(3), WHICH PRIMA FACIE ESTABLISHES THAT THE ACTIVITIES CARRIED ON BY THE A SSESSEE ARE NOT GENUINE, IN AS MUCH AS IT IS NOT FOR ADVANCEMENT OF ANY OBJE CT OF PUBLIC UTILITY. THE TWO CONDITIONS LAID DOWN IN SECTION 12AA(3) CANNOT BE READ AND UNDERSTOOD IN DISREGARD TO THE PROVISO TO SECTION 2(15). 13. IN THE END, LD DEPARTMENTAL REPRESENTATIVE CONC LUDED THAT THE TWO CONDITIONS STATED IN SECTION 12AA(3) HAVE REFERENCE TO THE DE FACTO NATURE OF THE ACTIVITIES CARRIED ON BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE- TRUST WAS GIVEN REGISTRATION UNDER SECTION 12AA ON THE GROUND THAT IT IS A CHARITABLE INSTITUTION IN AS MUCH AS IT IS ENGAGED IN THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC U TILITY IN THE FORM OF DEVELOPING AND PROMOTING THE GAME OF CRICKET IN TAMINADU AND PUDUC HERRY. BUT, NOW IT IS SEEN THAT ITS ACTIVITIES ARE ORIENTED TOWARDS GENERATING INCOME A ND REVENUE BY CONVERTING THE SPORT OF CRICKET INTO A CELEBRATED INDUSTRY, WHICH MEANS, THE PRESENT ACTIVITIES CARRIED ON BY THE ASSESSEE ARE NOT GENUINE, WHEN COMPARED TO THE OBJECTS STATED AT THE TIME OF GETTING REGISTRATION UNDER SECTION 12AA OF THE ACT. 14. IN REJOINDER, THE LD COUNSEL OF THE ASSESSEE AL SO RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF HIRALAL B HAGWATI VS CIT, 246 ITR 188 AND CONTENDED THAT IN THIS JUDGMENT IT WAS HELD THAT ON CE THE REGISTRATION UNDER SECTION 12A(A) OF THE ACT IS GRANTED, THE GRANT OF BENEFIT CANNOT BE DENIED AND THE AO WAS NOT JUSTIFIED IN REFUSING THE BENEFITS ON THE GROUND TH AT THE SCHEME IS NOT FOR THE BENEFIT OF PUBLIC AT LARGE. HE SUBMITTED THAT SINCE 1989, THE ASSESSEE-TRUST IS CARRYING OUT THE SAME ACTIVITIES WHERE WERE HELD BY THE DEPARTMENT A S CHARITABLE; AND THEREFORE BY OVERNIGHT, ON THE GROUND OF IPL MATCHES, IT CANNOT BE HELD THAT THE SAME HAS BECOME NON-CHARITABLE. 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 8 15. THE LD COUNSEL OF THE ASSESSEE ALSO POINTED OUT THAT IF TWO VIEWS ARE POSSIBLE, THE VIEW IN FAVOUR OF THE ASSESSEE SHOULD BE ADOPTE D. IN SUPPORT OF THIS, RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS:- A. MYSORE MINERALS LTD V. CIT, 239 ITR 775 (SC) B. ORISSA STATE WAREHOUSING CORPORATION V. CIT, 237 ITR 589 (SC) C. CIT V. PODAR CEMENT PVT LTD AND OTHERS, 226 ITR 625 (SC) D. CIT V. GWALIER RAYON SILK MFG. CO. LTD., 196 ITR 149 (SC) E. CIT V SAHAZADA NAND, 60 ITR 392 (SC) F. CIT V. KULU VALLEY TRANSPORT CO. LTD., 77 ITR 51 8, 530 (SC) G. CIT V. VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC) H. CIT V. NAGA HILLS TEA CO. LTD., 89 ITR 236, 240 (SC) I. CONTR. ED V. KANAKASABAI, 89 ITR 251, 257 (SC) J. CIT V. MADHO JATIA, 105 ITR 179, 184 (SC). 16. RIVAL SUBMISSIONS WERE CONSIDERED. ADMITTEDLY, IN THE PRESENT CASE, THE REGISTRATION HAS BEEN CANCELLED BY CIT, RAJKOT-2, R AJKOT 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 PERMISSIBLE LIMITS OF SECTION 12AA(3) OF THE INCOME-TAX ACT, 1961 AND THEREFORE, THE IMPUGNED ORDER IS BAD IN LAW. SIMILA R VIEW IS TAKEN BY THE AHMEDABAD A BENCH OF ITAT, AHMEDABAD IN THE CASE OF GUJARAT CRICKET ASSOCIATION V. DIT (EXEMPTION) AND THE RATIO OF THE SAID JUDGMENT IS S QUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE ALSO. WITH REGARD TO THE JUDGMENT OF ITAT, CHENNAI B BENCH IN THE CASE OF TAMIL NADU CRICKET ASSOCIATION VS. DIT (EXE MPTIONS) (SUPRA) AND ITAT, MUMBAI BENCH IN THE CASE OF MUMBAI CRICKET ASSOCIAT ION VS. DIT (EXEMPTION) (SUPRA), AS RELIED UPON BY THE LD DEPARTMENTAL REPRESENTATIV E; WE ARE OF THE VIEW THAT THE SAME ARE DISTINGUISHABLE AS RIGHTLY POINTED OUT BY THE LD COUNSEL OF THE ASSESSEE-TRUST. RECENTLY, ITAT CHENNAI B BENCH, IN THE CASE OF MA DRAS MOTOR SPORTS CLUB V. DIT (EXEMPTIONS) REPORTED IN (2013) 141 ITD 1, IN ALMOS T IDENTICAL FACTS RESTORED THE REGISTRATION, WHICH WAS CANCELLED BY LD DIT(EXEMPTI ONS), OBSERVING THAT THE NATURE OF OBJECTS OF THE ASSESSEE CANNOT FLUCTUATE IN TANDEM WITH THE QUANTUM OF RECEIPTS MENTIONED IN THE 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 ACTIVITIES OF THE TRUST CAN BE EXAMINED BY THE ASSESSING OFFICER IN T HE APPROPRIATE 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 PERMISSIBLE KEEP ING IN VIEW THE LIMITED POWER 816-RJT-2010 - SHRI LAKHDHIRSINH R RANA 9 AVAILABLE TO HIM U/S 12AA(3) OF THE INCOME-TAX ACT, 1961. THEREFORE, IT WOULD BE OPEN FOR THE ASSESSING OFFICER TO CONSIDER ALL THE ISSUE RAISED IN THE IMPUGNED ORDER, IF SO ADVISED, IN THE COURSE OF ASSESSING PROCEEDINGS OF RELEVANT YEARS. 17. IN VIEW OF ABOVE DISCUSSION, WE SET ASIDE THE O RDER OF LD CIT, RAJKOT-2, RAJKOT U/S 12AA(3) OF THE INCOME-TAX ACT AND RESTORE THE R EGISTRATION GRANTED TO THE ASSESSEE-TRUST U/S 12A OF THE INCOME-TAX ACT, 1961. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE-TRUST IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- ( *.'. ,$# $ D. K. SRIVASTAVA ) ( .'. -. / T. K. SHARMA) '' !/# / ACCOUNTANT MEMBER !/# /JUDICIAL MEMBER /'- 0/1/ ORDER DATE 25.10.2013. /RAJKOT *BT !'# $%'& / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SAURASHTRA CRICKET ASSOCIATION, RAJKO T 2. / RESPONDENT- THE COMMISSIONER OF INCOME TAX,RAJKO T-2, RAJKOT 3. !151 % 6 / CONCERNED CIT, RAJKOT 4 . 7$89 , , / DR, ITAT, RAJKOT 5 . 9* :; / GUARD FILE /'- !' / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT