In ITA No.22& 23/Del/2021 -ITAT- Haryana Rifle Association eligible for registration under Section 12AA & Section 80G of the Income Tax Act: ITAT (Delhi)
Members N.K. Billaiya (Accountant) & C.N. Prasad (Judicial) [23-06-2023]

Read Order: Haryana Rifle Association v. CIT(E) Chandigarh

Chahat Varma

New Delhi, June 28, 2023: The Delhi bench of the Income Tax Appellate Tribunal has ruled in favour of Haryana Rifle Association (assessee), directing the Commissioner of Income Tax (Exemptions) [CIT(E)] to grant registration to the assessee under Section 12AA and Section 80G of the Income Tax Act. The Tribunal concluded that the association was not operating with a profit motive.

The assessee had filed the present appeals against the orders of the CIT(E), Chandigarh, which had rejected their application for registration under Section 12AA and Section 80G of the Income Tax Act. The CIT(E) had argued that the sale of ammunition and charging fees for matches or tournaments conducted by the assessee did not have a charitable aspect and were considered commercial activities.

The Tribunal took into consideration the main objects of the assessee, which included organizing, promoting, and encouraging rifle shooting and conducting sports tournaments at various levels. It observed that the financial statements of the association showed that it had purchased ammunition for Rs.1,551,816 and sold it at a subsidized amount of Rs.215,400, resulting in a significant loss. However, this loss was offset by receiving sports promotion funds from the Haryana Government. The association also organized several tournaments at the state and national levels, for which it received match fees. These fees were then utilized for the advancement of the association's objectives.

Based on these observations, the Tribunal held that the assessee's activities were not driven by a profit motive.