CIT Can’t Deny Sec. 12AA Registration to ‘Tennis Association’ Based on a Projection of What Might Happen in Future | HC

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  • Last Updated on 9 September, 2023

registration of charitable trust

Case Details: CIT v. Cuttack District Tennis Association - [2023] 153 395 (Orissa)

Judiciary and Counsel Details

    • Arindam Sinha & Sanjay Kumar Mishra, Jj.
    • R.S. Chimanka, Sr. Standing Counsel (IT) & Avinash Kedia, Jr. Standing Counsel (IT) for the Appellant.
    • S. Ray Sr. Adv., Amit PattanaikDiganta Dah, Advs. for the Respondent.

Facts of the Case

Assessee-association applied for registration as a charitable trust under section 12AA. The primary object of the assessee association was to promote the game of tennis and all other sporting activities by encouraging young persons, providing coaching facilities and organizing tournaments.

The Commissioner rejected the application because the assessee was looking to raise funds from the sponsors and donors in the interest of the game. It would be quite possible that a huge amount of commercial consideration would take effect through advertisement, ticket selling, broadcasting right over the game, etc. Thus, the genuine activities of the association would not be considered as “charity” under the ambit of section 2(15).

On appeal, the Tribunal reversed the order of the CIT, and the matter reached the Orissa High Court.

High Court Held

The High Court held that the Commissioner rejected the application for registration because of future contingency. It was held that section 12AA, by the sub-sections therein, provides for cancellation of the registration, and rejection of the application for registration based on a projection of what might happen in the future could not be sustained. Accordingly, the assessee’s appeal was allowed.

List of Cases Reviewed

    • Order passed by ITAT Cuttack in ITA no. 454/(CTK)/2013, dated 12-4-2018 (para 7) affirmed.

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