Soul and substance of ‘charity’ is missing in IPL matches; Registration of TN Cricket Association revoked
IPL is commercial venture to maximize revenues from cricket. Registration of cricket associations conducting IPL matches are liable to be cancelled under section 12AA(3) by invoking the first proviso to section 2(15)
In the instant case, the following issues came for consideration of Chennai ITAT:
a) Whether IPL matches come within conceptual definition of charity vis-a-vis activity of general public utility under section 2(15)?
b) Whether registration of Tamil Nadu Cricket Association conducting IPL matches could be cancelled under section 12AA?
The Tribunal held in favour of revenue as under:
1) The phrase “Advancement of an object of general public utility” used in the inclusive definition of ‘charitable purpose’ under section 2(15) cannot be divorced from the inherent concept of ‘charitable purpose’;
2) The soul and substance of ‘charity’ is activity carried on by kind and sympathetic people for the help of those in need. None of the activities of an assessee can be considered as charitable purpose if it is devoid of soul and substance of charity;
3) IPL matches are commercial ventures. Nothing ‘charitable’ is there in conducting IPL matches as the soul and substance of charity is missing. Cost of tickets is very high, laymen cannot buy them;
4) Cricket associations are oriented towards maximizing revenue from high ticket prices and advertisements. Free tickets aren’t provided to so-called slum dogs and other poor people to watch IPL. Instead these are issued to VIPs and dignitaries;
5) IPL teams are owned by different sponsors including industrial houses and film stars. They select players on auction basis and quote highest price for the best players. Capital invested by owners of teams is redeemed by advertisement revenue;
6) By no stretch of imagination IPL matches can be called as activities of public utility carried on by assessee. IPL cricket matches, celebrity cricket matches (involving film stars) do not have any element of public utility. They are either after fame or money;
7) IPL matches are further garnished by cheer girls and fanfare. These are marketing strategies by which cricket associations are trying to sell the game of cricket at the highest amount that could be collected;
8) Thus, registration of Tamil Nadu Cricket Association was cancelled as IPL matches do not come within the ambit of inclusive definition of charitable purpose under section 2(15) – TAMIL NADU CRICKET ASSOCIATION v. DIT(EXEMPTIONS)  32 taxmann.com 50 (Chennai – Trib.)