Punjab Cricket Association Vs ACIT (ITAT Chandigarh)
Punjab Cricket Association (Assessee) is regularly following commercial activity by commercially exploiting its property and rights to hold matches and thereby earning huge income, hence the said activity can not be said to be incidental activity rather the commercial exploitation of the match is one of the main activity of the assessee, hence, the case of the assessee ,in our view, for the year under consideration will not fall within the definition and scope of section 2(15) of the Act and thus the assessee is not entitled to exemption u/s 11 of the Act. While holding so, we do not mean that the assessee’s activity is not at all for promotion of the game of cricket. No doubt, the assessee is also activity contributing towards the promotion and popularity of the cricket but at the same time its activities are also concentrated for generation and augmentation of the revenue by exploiting the popularity of the game and towards monopolisation and having dominant control over the cricket to the exclusion of others. What we want to convey is that the commercial exploitation of the popularity of the game and the property/infrastructure held by the assessee is not incidental to the main object but is apparently and inter alia one of the primary motives of the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal has been preferred by the assessee against the order dated 07.12.2016 of the Commissioner of Income Tax (Appeals)-2, Chandigarh [hereinafter referred to as CIT(A)].
2. The assessee in this appeal has taken following grounds of appeal:-
i) That the Ld. Commissioner of Income-tax (Appeals) has erred in facts and law in confirming the conclusion drawn by the Ld. AO that the rendering of services in respect of Indian Premier League cricket (IPL) by the appellant is a business activity and hence not eligible for exemption u/s 11 & 12 as it is hit by the first proviso to section 2(15) of the Income Tax Act, 1961. The Ld. Commissioner of Income-tax (Appeals) as well as Ld. AO has failed to appreciate the arrangement of conducting Indian Premier League cricket (IPL) matches agreed between BCCI and Kings XI Punjab and the role of appellant therein. Therefore, the conclusions drawn are not sustainable.
ii) That the Ld. Commissioner of Income-tax (Appeals) has erred in law and on the facts in not following the ratio laid down by the Apex Court in the case of Addl. CIT V. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 / [1979] 2 Taxmann 501, which is still applicable to the appellants case even after the insertion of first proviso to section 2(15) of the Income Tax Act, 1961 from the A.Y. 2009-10.
iii) That the Ld. Commissioner of Income-tax (Appeals) has erred in law and on the facts in not following the ratio laid down by the Hon’ble ITAT, Bench “A” judgment in the case of M/s Tamil Nadu Cricket Association V.DDIT (Exemption) Chennai ITA No.1535, 1536 & 1537/Mds/2014 dated 14/08/2015, on similar set of facts.
iv) That the Ld. Commissioner of Income-tax (Appeals) erred on facts and in law in upholding the action of the assessing officer in denying exemption under sections 11/12 of the Income Tax Act, 1961.
3. The brief facts relating to the issue are that the assessee cricket association is a society registered under the Societies Registration Act 1860. It was earlier granted registration u/s 12A of the Act which was cancelled by Commissioner of Income Tax vide order dated 31.03.2009 and the cancellation was made from assessment year 2009-10 onwards in view of the amended provisions of section 2(15) of the Income Tax Act (in short ‘The Act’). On appeal by the assessee, the co-ordinate Chandigarh Bench of the Tribunal set aside the order of the Commissioner of Income Tax, against which the appeal of the Department is pending before Hon’ble Punjab and Haryana High Court.
4. During the assessment proceedings for the year under consideration, the Assessing officer noted that assessee for the relevant assessment year had reported the following income:
