124. Conditions specified under clause (23) whether cumulative conditions and all of them have to be satisfied before approved association or institution is granted exemption

Section 10(23) provides for the grant of exemption from tax to any income of an association or institution established in India having as its object the control, supervision, regulation or encouragement in India of the games of cricket, hockey, football, tennis or such other games or sports as the Central Government may specify in this behalf from time to time by notification in the Official Gazette.

The exemption is subject to the fulfillment of three conditions as under :

(i)   the association or institution applies its income, or accumulates it for application, solely to the objects for which it is established;

(ii)   no part of the income of the association or institution is distributed in any manner to its members except as grants to any association or institution affiliated to it; and

(iii)   the association or institution is, for the time being, approved for the purpose of this clause by the Central Government by general or special order.

The updated list of the games and sports notified under section 10(23 ) is enclosed [here printed at Sl.  No. 126, p. 1.240].

2. The three conditions enumerated in the preceding paragraph are cumulative.  Therefore, approval of the association or institution by the Central Government will amount to fulfillment of only one of the three conditions.  The first two conditions will also have to be satisfied in order that the approved association or institution is eligible for exemption from tax under section 10(23).  This requirement will have to be satisfied by filing copies of audited accounts before the Income-tax Officer.

Circular : No. 398 [F. No. 190/23/82-IT(A-I)], dated 17-10-1984.

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