The question raised before the High Court was “Whether the Hon’ble ITAT has erred in not taking cognizance of the latest amendment in the nature of the proviso to section 2(15) of the I.T. Act inserted with effect from 01/04/2009?” After considering the provisions and case laws the High Court held that ,the fact that the carrying on of charitable activities results in a surplus does not mean that assessee exists for profit. “Profit” means that owners have a right to withdraw the surplus for any purpose including personal purpose. However, if the surplus is ploughed back into the same charitable activities, the assessee cannot be said to be carrying out commercial activities in the nature of trade, commerce or business. The fact that the assessee has dealings with, & share of profits from, BCCI (a commercial entity) does not affect its charitable status. ( C/TAXAP/268/2012 dt. 27.09.2019) (AY. 2004 -05, 2009 -10 to 2012-13)
DIT(E) v. Gujarat Cricket Association ( 2019) 419 ITR 561/ 184 DTR 97 /(2020) 314 CTR 297/(Guj)(HC),www.itatonline.org DIT ( E ) v. Baroda Cricket Association ( 2019) 419 ITR 561/ 184 DTR 97/(2020) 314 CTR 297 (Guj)(HC),www.itatonline.org DIT (E ) v. Saurashtra Cricket Association ( 2019) 419 ITR 561/ 184 DTR 97/ (2020) 314 CTR 297 (Guj)(HC),www.itatonline.org Editorial: Orders of Tribunal in Gujarat Cricket Association v JCIT / Baroda Cricket Association v .JCIT, Saurashtra Cricket Association v.JCIT ( 2019) 202 TTJ 409 / 183 DTR 367( Ahd) (Trib) is affirmed .
S. 11 : Property held for charitable purposes – Charitable activities results in a surplus does not mean that assessee exists for profit- If the surplus is ploughed back into the same charitable activities, the assessee cannot be said to be carrying out commercial activities in the nature of trade, commerce or business- Entitle to exemption . [ S.2(15) 12, 12AA ]