Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 1585 - AT - Income TaxValidity of reopening of assessment u/s 147 - Charitable Activity or not? - receipts from BCCI - Exemption u/s 11 denied - no tangible material based on which the re-opening of assessment was made - HELD THAT:- A perusal of these reasons demonstrate that no new tangible material came into the possession of the Assessing Officer, based on which he formed a belief that income subject to tax has escaped assessment The entire reasons are based on a perusal of the return of income, income and expenditure statement and computation of income as evident from para 2 of the reasons recorded. The reopening is done merely on a change of opinion that too, it is not based on any tangible material coming into the possession of the Assessing Officer, after completion of the original assessment u/s 143(3) of the Act on 22/03/2013. AO after passing the assessment order for the Assessment Year 2012-13, based on his conclusions drawn therein, came to a conclusion that the assessment order for the earlier Assessment Year 2010-11, passed u/s 143(3) of the Act on 22/03/2013, granting exemption to the assessee needs to be revised. Such a reopening is not permissible under law. Whether the proviso to Section 2(15) of the Act, can be applied in the facts and circumstances of the case? - AO came to a conclusion that the assessee is carrying on commercial activity in the nature of trade, commerce or business as the assessee has received amounts from BCCI on account of IPL Subvention, TV rights subsidy from BCCI, Instedia Advertisement etc. - HELD THAT:- In our considered opinion, these receipts from BCCI cannot be considered as income received from activities in the nature of trade, commerce or business. The pith and substance of the argument of the ld. D/R is that the nature of receipt in the hands of BCCI is business or commercial receipts on account of IPL Subvention, T.V. Rights etc. and where these receipts are shared with the state association on an 30:70 ratio basis, the nature of receipt does not change and it would be business receipts in the hands of the State Associations also. The allegation of revenue is that these receipts are couched in the form of subsidies. These issues have come up in the case Gujarat Cricket Association vs. JCIT (Exemptions) [2019 (1) TMI 1522 - ITAT AHMEDABAD] has not agreed with the arguments of the revenue that BCCI with its affiliates have to be viewed together in unison and not separately. It also rejected the contention that, receiving substantial revenue sharing amounts in the nature of :- 1) IPL Subvention, 2) T.V. Broadcasting rights & 3) Sponsorship Rights, are in the nature of commercial receipts and are couched in the shape of subsidies. The contention that the nature of the income has not changed even after the receipt of such amounts in the hands of the affiliate as the source of the amounts and activities remain the same, has not been accepted. The Tribunal has taken the view that what is distributed is appropriation of profits. We come to a conclusion that the proviso to Section 2(15) of the Act has been wrongly invoked. The assessee is eligible for exemption u/s 11 & 12 of the Act Nature of receipt - infrastructural subsidy received from BCCI - revenue receipt or a capital receipt - HELD THAT:- This issue was also considered by the Ahmedabad D Bench of the Tribunal [2019 (1) TMI 1522 - ITAT AHMEDABAD] and it was adjudicated that the receipts in question are in the capital field. Consistent with the view taken therein, we allow this ground of the assessee. Revision u/s 263 by CIT - HELD THAT:- Order of the ld. CIT u/s 263 of the Act, has to be necessarily vacated. The Assessing Officer has passed a detailed and reasoned order u/s 143(3) of the Act, granting exemption to the assessee u/s 11 & 12 of the Act. This is not a case of non-application of mind by the Assessing Officer. The view taken is a plausible view. The ld. CIT in his order u/s 263 of the Act, has not pointed out, as to the error committed by the Assessing Officer which cause prejudice to the interest of the revenue. As the main issue as to whether the provision to Section 2(15) of the Act is applicable to the facts of this case in favour of the assessee. Consistent with the view taken therein, we have to necessarily cancel the order of the ld. CIT passed u/s 263 of the Act. - Assessee's appeal allowed.
|