The Board of Control of Cricket in India (BCCI), the richest sports association in the country, won this round in a battle with the tax collector. The sports federation in its defence argued that they earn money through the Indian Premier League, but the purpose of promoting cricket remains unchanged and its income should therefore be exempt from tax. The same was upheld by the Income Tax Appellate Tribunal in its resolution of November 2nd. Against three show-cause notices from the revenue department from 2016-17 to explain why the tax exemption of the BCCI according to Section 12 A of the Income Tax Act should not be revoked in order to generate income through the IPL.
The bench judicial member Ravish Sood and vice-president Pramod Kumar rejected the contention of the revenue department, “On the face of it, merely because a sports tournament is structured in such a manner so as to make it more popular, resulting in it in more paying sponsorships and greater mobilisation of resources, the basic character of activity of popularising cricket is not lost,”
According to the BCCI, the Income Tax Department made a “mistake” in highlighting the surplus generated by the activities related to the IPL, without fully considering the cricket board’s general activity and came to the conclusion that they are not qualified as sports sponsorship.