4 State cricket bodies no more tax exempt

New Delhi, Jan. 9:  

Not Quite Cricket: CAG had slammed I-T Department for extending irregular exemptions. — PTI

 

Tax authorities on Thursday withdrew exemptions granted to four regional cricket associations–Saurashtra, Baroda, Kerala and Maharashtra.

The Central Board of Direct Taxes (CBDT), which is looking into the affairs of these associations, found that they were engaged in certain activities considered commercial in nature in view of the amended provisions of the Income-Tax Act, 1961.

“Consequently, the scrutiny of assessments in these cases has resulted in the withdrawal of tax exemptions,” the board said, adding past assessments of these four associations had also been re-opened to examine the correctness of their claims for income-tax exemption during the periods concerned.

The national auditor Comptroller & Auditor General of India (CAG), in its report tabled in Parliament last month, had slammed the Income-Tax Department for extending irregular exemptions to the four cricket affiliates of the Board of Control for Cricket in India (BCCI), resulting in a short levy of tax of over Rs 37 crore. It also said the I-T department allowed irregular exemptions on income from television rights given to the four associations engaged in commercial activity.

The CAG said under Section 2 (15) of the Income-Tax Act, a public utility activity cannot be treated as ‘charitable’ if it involves carrying out any activity in the nature of trade, commerce or business.

Kerala Cricket Association President T. C. Mathew said he was not aware of this decision. A senior official from the Saurashtra Cricket Association said the State cricket board would consider the necessary legal recourse, adding the association had been fighting these matters in courts wherever possible. The official said the association was not trying to avoid paying income-tax.

Last year in November, the Kerala Cricket Association had refused the offer of 25 per cent tax waiver from the Kochi Corporation on entertainment tax for the one-day international match between India and West Indies. The association said it couldn’t accept the waiver because it had already printed tickets and was unable to pass it on to the spectators.