SECTION 2(15) – CHARITABLE PURPOSE
10. Whether promotion of sports and games can be considered to be charitable purpose
1. The expression “charitable purpose” is defined in section 2(15) to include relief of the poor, education, medical relief and the advancement of any other object of general public utility.
2. The question whether promotion of sports and games can be considered as being a charitable purpose has been examined. The Board are advised that the advancement of any object beneficial to the public or section of the public as distinguished from an individual or group of individuals would be an object of general public utility. In view thereof, promotion of sports and games is considered to be a charitable purpose within the meaning of section 2(15). Therefore, an association or institution engaged in the promotion of sports and games can claim exemption under section 11 of the Act, even if it is not approved under section 10(23) relating to exemption from tax of sports associations and institutions having their objects as the promotion, control, regulation and, encouragement of specified sports and games.
Circular : No. 395 [F. No. 181(5) 82/IT(A-I)], dated 24-9-1984.
JUDICIAL ANALYSIS
REFERRED TO IN – This circular was referred to ITO v. Deccan Gymkhana (Oldest Trust) [1988] 71 CTR (Pune – Trib.) (TM) 11, with the following observations:
“. . . the Circular relied upon by the assessee’s counsel does state that promotion of sports and games is considered to be a charitable purpose within the meaning of section 2(15). It also goes on to state that an institution engaged in this activity can claim exemption under section 11 even if it is not approved under section 10(23). Further the Andhra Pradesh High Court in CIT v. Andhra Pradesh Riding Club has stated that if an assessee is otherwise entitled to exemption under section 11, a separate provision under section 10(23) is not material.
The standing counsel submitted that sports and games were not of any utility because they were not a necessity. I am not inclined to accept this argument. In my view, utility first of all, means usefulness and not necessity. Secondly, it would be too narrow a view to take. For any community or society in general, sports and sportsmanship are definitely useful and are of great value. For these reasons I am of the view that the object of the assessee, i.e. promotion of sports, games, gymnastics and sportsmanship must be said to be an object of general and public utility i.e. a charitable purpose within the meaning of section 2(15). The learned Judicial Member has stated that in so far as amusement and recreation is provided by the games, they cannot be regarded as for charitable purposes. In my view, these objects have to be read as a whole i.e. the promotion of sports and sportsmanship, and it would not be fair to separate one particular item of games from the general activity of sports and games. Further, it has also considered whether the sports would promote physical fitness and well being. I am unable to agree with this criteria as stated above, sports and sportsmanship are of general public utility irrespective of the physical well being which they may promote.” (p. 35).
