The Haryana Rifle Association, represented by Charitra Gupta, CA, faced a crucial legal challenge against the CIT(E), Chandigarh’s decision denying them charitable status under sections 12AA and 80G of the Income Tax Act. This detailed article examines the tribunal’s rationale in overturning this decision on June 23, 2023.
The case arose from the CIT(E)’s rejection of the association’s application for registration as a charitable organization. The primary issue was the classification of the association’s activities, particularly the sale of ammunition and collection of match fees, which the CIT(E) deemed commercial rather than charitable.
The financial activities during the years leading to the appeals included substantial transactions from match fees and the sale of ammunition, initially interpreted as commercial enterprises by the CIT(E). However, the association argued that these activities were essential to their mission to promote rifle shooting in Haryana and were supported by the state government.
The ITAT, led by Sh. N. K. Billaiya, AM, and Sh. C.N. Prasad, JM, noted that the association incurred losses on the sale of ammunition, subsidized through government support, and used match fees to further sports development. The detailed examination of the income and expenditure statements revealed that these activities align with the association’s charitable objectives.
The tribunal concluded that the Haryana Rifle Association operates without a profit motive, primarily supporting the sports community, and directed the CIT(E) to grant the required registrations. This decision emphasizes the importance of context and intent in determining the charitable nature of nonprofit activities.
Haryana Rifle Association vs CIT(E) Chandigarh: Tribunal Reverses Denial of Charitable Status
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform