TMI Blog2014 (5) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... ance to the above discussions one can appreciate that in the present scenario, sports has also emerged as a profession the income derived from which is taxable, and such profession is associated with systematic and continues education in the sport one profess coupled with trained physical and mental fitness and therefore providing knowledge in any sport have to be treated at par with education. Considering the scope of sports development in India, we are of the view that the recognized sports association in India, who impart knowledge in sports, promotion of sports by conducting various sports activities in all branches, to fall within the scope of “education as defined under the amended provisions of Section-2(15) of the Act”. Accordingly we hold that the objects of the assessee society will fall within the scope of the first limb of the amended provisions of section 2(15) of the Act viz., “education”. Further on analyzing the activities of the assessee society with regard to FIDE trainer coach fee, AICF chronicle, Prize money share, Rent on Monrai system, Title fees, Telecast charges–Doordarshan and FIDE remittances we find that all of them relate to the activities which are i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer denied the benefits of Section 11 and Section 12 of the Act to the assessee and assessed the income at Rs.64,37,150/-, because the aggregate value of receipts from the activities of the assessee trust exceeded the limit prescribed by the second proviso to Sec.2(15) of the Act. On appeal, the Ld. CIT (A) confirmed the order of the Ld. Assessing Officer by observing as under:- The meaning or definition of advancement of object of general public utility for the purpose of Sec.2(15) underwent a clear change consequent to the amendment i.e. insertion of proviso to section 2(15) of the Act ,w.e.f.01.04.2009. Prior to the amendment (i.e. upto 31.03.2009) all objects of any general public utility is eligible to be classified as a charitable purpose under section 2(15) of the Act. In the post amendment scenario, certain classes of general public utility activities are kept outside the scope of section 2(15) of the Act. The activities which are excluded from the list of general public utility are provided in the proviso to sec.2(15). As per this proviso any activity which is in the nature of carrying on any activity in the nature of carrying on any trade, comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 12,00,000: This sum is towards telecast charges received by the assessee for permitting telecast of chess tournaments. vii) FIDE remittances ₹ 15,35,052/-: The assessee has remitted the above sum to FIDE, Greece during the previous year towards Trainers Coach Expenses, Title Fees, etc. These applications are outside India and as such not allowable as exempt applications. The Organization is learnt to remit considerable sums to FIDE which enriches the Foreign Organization and which sums are not available for the promotion of sports in India. The assessee is acting as an agent for these payments made outside India, which are not directly for the benefit of sports in India. Analysis of the above receipts of income clearly showed that some of them are purely commercial in nature. For example, the telecast charge received by the assessee for permitting the telecast of chess tournaments is a commercial activity. Similarly publication of magazine at commercial rates and sale amounts a commercial activity. Further there are remittances outside the country. Such remittance to outside the country will not amount application of income for charitable purpose. Charitable pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R argued in support of both the orders of the Revenue authorities and reiterated that utmost the assessee society may fall under the fourth limb of Sec.2(15) of the Act viz., advancement of any other objects of general public utility and since the aggregate value of the receipts from the activities of the society has exceeded the limit prescribed by the Second proviso to Sec.2(15) of the Act, the Ld. Assessing Officer had rightly assessed the income of the assessee at Rs. 64,37,150/- and brought the same under the ambit of tax. He therefore, requested that the orders of Revenue may be confirmed. 6. We have heard both the parties and carefully perused the materials available on record. The following facts are not disputed by the Revenue authorities and it is crucial to be taken note off while deciding the issue and therefore they are listed herein below:- i) The assessee trust All India Chess Federation shortly called as AICF , is a society registered under the Tamilnadu Society Registration Act, XXI of 1860 on 12th day of December, 1958. ii) All the objects of the trust, centers around promotion, development, and to maintain control selection of teams in the game of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to various sports science for upgradation of sports, sportspersons and coaches. Other incidental issues concerning promotion, development and excellence in sports. For achieving all the above objects recognized National sports federations of the country likewise the assessee societies act as a feeder. 6.2. Ministry of Youth Affairs Sports was initially set up as Department of Sports in 1982 at the time of organization of IX Asian Games in New Delhi. It became separate Ministry on 27th May, 2000. The vision of the Ministry was to provide opportunities for developing the personality of the youth so that they may achieve the full potential and involve them in various national building activities on one side and development of sports and to achieve excellence at national and international level in order to fulfill these objectives, the Ministry has promoted various NGO s, Voluntary Organizations, National Sports Federations, Regional Sports Associations etc. The Ministry has also provided financial assistance to various recognized organizations including National Sports Federations for sending the teams abroad for training and participation in international tournaments, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Article 226 o the Constitution of India because they perform state-like functions such as the selection of national teams and representing the country in international sports events and forums. 1.3. Globally, countries across the world have enacted laws or enunciated guidelines for the regulation of sports in public interest and in national interest. The need to regulate sports arises out of several considerations such as the need to prevent racism in sports, eradicate doping in sports, prevent age fraud in sports, protect athletes rights, prevent child abuse and sexual harassment in sports, protect gender equality in sports, prevent betting and gambling in sports, ban dangerous sports, promote professional management and managerial and financial accountability in sports, address anti-trust and competition policy issues related to sports, regulate sports broadcasting rights, regulate the price and entry to sports events, etc. 1.4 Government of India also has been, from time to time, taking various steps and initiatives to promote good governance practices in the management of sports at the national level in pursuance of successive National Sports Policies. These policies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtend required infrastructure, training and other facilities to the sportspersons for achieving excellence fin the international events. 2.2. Over the years a number of National Sports Federations (NSFs) have come up for development of specific games/sports/disciplines, Government of India has been actively supporting these Federations in achieving their objectives. 2.3. Guidelines of 2001 laid down the following principles, which now, stand subsumed in the National Sports Development Code of India (NSCI) 2011; i. A clear role delineation between NSF, SAI and the government. ii. Grouping of sport disciplines into priority , general and others for the purpose for determining the entitlement for government assistance. iii. Detailed guidelines for preparation of Long Term Development Plans (4-year cycle), provision made for annual sanction budgets of development plans. iv. Binding tripartite agreements between NSFs, the Department and the SAI to be drawn up. v. An emphasis on professionalizing and upgrading the administrative and financial management of Federations. vi. An emphasis on systems to handle players grievance. vii. The appointment of registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws of the land. Since the High Court of Delhi, while hearing the matter of government guidelines, including those on age and tenure limit, has refused to accept the prayer of National Sports Federations (NSFs), including IOA, to stay the operation of the said guidelines, they automatically become legally enforceable and the NSFs, including IOA are legally bound by it. Further, the International Olympic Committee (IOC) has informed the Government that the IOA is in the process of amending its constitution by adopting the principles of good governance and ensuring voting majorityof NSFs to become compliant with the IOC Charter. IOA has also indiated that they are in the process of amending their Constitution in line with the IOC suggestions. 3.4. The gist of important new initiatives taken by the Government is indicated hereunder. These have been suitably incorporated in the subsequent paragraphs of Guidelines by replacing the existing provisions and /or adding the new provisions. The new provisions supersede the earlier provisions in the 2001 Guidelines. 3.5. Gist of new initiatives taken by Government. in the recent past: Restoring the limits on duration of tenure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government, the NSF cannot operate beyond the boundaries of the State concerned where it is registered.) 4) Shall not be able to avail itself of Custom Duty/Exemption for import of sports goods, sports equipment, sports requisites as an NSF/Apex Body. (Reference: Department of Revenue s Notification No.5/2010-Customs dated 19.10.2010 read with Notification No.146/94-Customs dated 13.07.1994 allows the customs duty exemption to NSF under a certificate issued by SAI; further Notification No.21/2002-Customs provides custom duty exemption for import of Requisites for games and sports for Apex body in relation to the concerned game or sport). 5. Shall not be able to avail itself of Income Tax exemptions under relevant provisions of the Act (e.g., as per the Sec.80G(2)(viii)(c) any sum paid by the assessees, being a company, in the previous year as donations to the IOA or to any other association or institutions established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the official gazette specify in this behalf for (i) the development of infrastructure for sports and games; (ii) the sponsorship of sports and games; is exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Vs. ST. Mary s Malankara Seminary reported in [2012] 348 ITR 69 (Ker) held that there is nothing to indicate that section 10(23C)(iiiad) of the Income-tax Act, 1961, requires the educational institutions referred to therein to impart education in any particular subject or in any manner whatsoever. The term education enjoys a wide connotation covering all kinds of coaching and training carried on in a systematic manner leading to personality development of an individual. In the case of a seminary, students on completion of their studies are made priests who head churches as religious leaders practicing and propagating religion as a profession. Accordingly, religious teaching in the seminary is also education and seminary is, therefore, an educational institution entitled for exemption U/s. 10(23C)(iiiad). 8.4. Recently, while deciding the case Counsel for India School certificate examinations Vs. DGIT vide order dated 20th March, 2012 reported in (2012) 206 Taxman 466 (Delhi), Hon ble Delhi High Court has held that :- Reading of Sec.10(23)(vi) shows that any University or other educational institutions existing solely for educational purposes qualifies under the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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