BCCI cannot be denied tax exemption, rules IT tribunal

Even as the Board of Control for Cricket in India has taken a reconciliatory approach towards the Income Tax department, it got a shot in the arm recently when a tax tribunal ruled that the board cannot be denied tax relief.

The Principal Commissioner of Income Tax (PCIT) had contended that the activities of the BCCI are business in nature, and were not genuine. But the BCCI, represented by senior advocate Percy J Pardiwalla, advocates Nitesh Jain, Sukh Sagar Sayal, have successfully argued that the income generated from the activities like the IPL are only incidental to the primary object of promoting the game.

In a recent order, the Income Tax Appellate Tribunal (ITAT) ruled that BCCI is entitled for tax exemption under Section 12AA of the Income Tax Act 1961, and upheld BCCI’s contention that the income generated from the Indian Premier League (IPL) is only incidental.


The order stated, “Improvising the rules of the game, adding entertainment value to it and making it economically attractive may be a purist’s nightmare but the same factors can also be viewed as radical and innovative ideas to popularise a game – the very raison d’etre of an institution like this assessee, and that is how we view it.”

In its 25-page order, the ITAT has said, “As long as the object of promoting cricket remains intact, and that continues to be the predominant object, the assessee cannot be said to be following the object of promoting cricket, just because the operational model of cricket tournament, whether IPL or any other tournament whether IPL or any other tournament, is more entertaining, more economically viable, provides greater economic opportunities to all those associated with the tournament and mobilises greater financial resources for popularising cricket.”

The order further added, “The purpose for which all the funds at the disposal of the assesse trust, including additional funds generated by holding the IPL tournament, are employed is certainly for promoting cricket and that is what really matters.”

The verdict was pronounced by Pramod Kumar and Ravish Sood. The Income Tax department was represented by Rahul Raman, commissioner, (departmental representative). “It is a very favourable order and we’ll work on this,” BCCI treasurer Arun Dhumal said.

During last year’s BCCI AGM, the office bearers were authorized to evaluate all the pending litigations and approach the government to settle the matters through the ‘Vivaad se Vishwaas’ scheme.

The minutes of the meeting read, “The Honorary Secretary informed the Members that BCCI is in process of studying /evaluating certain pending income tax matters like one related to income tax and another related to TDS in case they can be settled through the Government of India’s “Vivad Se Vishwas” scheme.”

“BCCI has taken advice from Tax experts in the matter, who have suggested that BCCI may look at availing the benefit under this scheme which will result in closure of few of the litigation matters regarding taxation matter. The Honorary Secretary, therefore, sought authorization to the Office Bearers to approach the Government of India to settle the matters through the scheme. Members took note of the same and authorized the Office Bearers for the said matter.”

Source: https://www.cricbuzz.com/cricket-news/119858/bcci-cannot-be-denied-tax-exemption-rules-it-tribunal

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