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BCCI cannot be denied tax exemption, rules IT tribunal

Despite taking a conciliatory approach to the Income Tax Department, the Board of Control for Cricket in India recently received a boost when a tax tribunal declared that the board cannot be refused tax relief.

The BCCI’s activities, according to the Principal Commissioner of Income Tax (PCIT), are commercial in character and not genuine. However, the BCCI has successfully contended that the cash gained from activities such as the IPL is purely incidental to the fundamental goal of promoting the game, as represented by senior lawyer Percy J Pardiwalla, advocates Nitesh Jain, and Sukh Sagar Sayal.

Entitled for Tax Exemption Under Section 12AA

The Money Tax Appellate Tribunal (ITAT) has declared that BCCI is entitled to a tax exemption under Section 12AA of the Income Tax Act 1961, upholding BCCI’s claim that the income generated by the Indian Premier League (IPL) is simply 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.”

“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 a 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 mobilizes greater financial resources for popularising cricket.” the ITAT has said

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

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