‘Indian Olympic Association’ won’t lose charitable status just because it received sponsorship from a private co.

'Indian Olympic Association' won't lose charitable status just because it received sponsorship from a private co.

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‘Indian Olympic Association’ won’t lose charitable status just because it received sponsorship from a private co.
Facts:
a) The assessee was an Apex sports body for selecting athletes to represent India at Olympic Games, Asian Games and other international athlete meets at these events.
b) The activities of the assessee included organizing sports activities under the aegis of Ministry of Youth Affairs and Sports, Government of India and International Olympic Association.
c) Assessing Officer (AO) was of opinion that the assessee had carried out the activities for the purposes of general public utility in the nature of trade, commerce or business. The basis for said belief was the receipt of income from sponsorship received from ‘S’ Ltd. for Asian Games and Youth Olympic Games.
d) He held that the proviso to section 2(15) squarely applied and assessee would not fall within the category of ‘charitable organization’. CIT(A) reversed the order of AO. Aggrieved-revenue filed the instant appeal before the ITAT.
The ITAT held in favour of assessee as under:
1) The fundamental or dominant function of the association was to represent the country in the international forums. Associations of different disciplines in sports in India are members/affiliated to IOA. In furtherance of its activities, the association not only required grants from the Government, but on many occasions sponsorships.
2) This couldn’t be an activity by itself amounting to carrying on of any business, trade or commerce. The impugned association was engaged in multi-level activities of diverse nature but the primary and dominant activity was promoting sports activities not only in India but also in the international forum, it would not lose its character of charitable purpose merely because some sponsorship was accepted.

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