BCCI must pay the tax | Deccan Herald



BCCI must pay taxes

It is one of the richest sporting bodies in the world

Under the earlier registration, BCCI was exempt from income tax as it was a registered charity.  Credit: Reuters Photo

The Income Tax Appeal Tribunal has interpreted the law too generously to grant registration to the Board of Cricket Control of India (BCCI) as a tax-exempt charity. It was not only that the Tribunal’s interpretation was too technical, it was also blind to certain facts that should have been obvious. The issue to be decided was whether BCCI was a charitable or commercial organization after the Department of Income Tax denied its application for registration as a charitable entity. The Chief Commissioner of Income Tax found that BCCI was only using the charitable purpose to commercially exploit the game of cricket through franchise agreements for the conduct of IPL. BCCI had registration as a charity in 1996. But its status was challenged when it applied for re-registration following changes to its Memorandum of Association (MoA) to incorporate recommendations made by the Lodha Justice Committee, as approved by the Supreme Court.

Under the earlier registration, BCCI was exempt from income tax as it was a registered charity. But the law states that the ground of charitable purpose cannot be invoked when it comes to a commercial activity, unless the activity promotes the general public good. The Department of Income Tax was of the view that IPL’s conduct was a commercial activity and therefore BCCI was not entitled to a tax exemption. BCCI claimed that IPL’s commercial activity promoted cricket. The Tribunal, on appeal, granted registration to BCCI on the technical ground that its objectives had not changed despite changes being made to the MoA in accordance with the recommendations of the Supreme Court. The order states that the purpose for which all funds available to BCCI, including additional funds generated by the holding of the IPL tournament, are used is the promotion of cricket.

The Tribunal’s views and conclusions are not very convincing. He took a very legalistic view in arguing that BCCI’s status did not change when changes were made to its MoA in 2018. Even though the Tribunal’s order does not appear to have been issued based on the spirit and intent of the law and a proper assessment of BCCI’s activities, BCCI’s reluctance to pay tax on its income is most regrettable. It is one of the richest sports bodies in the world and its annual income amounts to thousands of rupees and keeps increasing every year. Rather than finding loopholes and excuses to avoid paying taxes, he should easily pay taxes. As a public organization, it must lead by example in fulfilling its public duty. Holding IPL and promoting cricket by all means but also giving Caesar what is Caesar’s.

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