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IPL Matches Not Liable For Tax : ITAT

by Akshat Mathur 13 Nov 2021

IPL Matches Not Liable For Tax : ITAT

The Income Tax Appellate Tribunal has held that the Board of Control for Cricket in India (BCCI) is entitled to registration under Section 12A of the Income Tax Act, which makes it eligible for tax exemption, despite the launch of the Indian Premier League Tournament. The ITAT held that just because IPL is structured in a more profitable manner, the exemption can not be denied to the BCCI, and so long as the object of promoting cricket is remaining intact, the society is entitled to retain its exemption registration. The Board of Control for Cricket in India (BCCI), the country's richest sports body has won this round in a battle with the taxman. The Income Tax Appellate Tribunal (ITAT), in an appeal filed by the BCCI, upheld the arguments of the sports body that even though it's making money through the Indian Premier League (IPL NSE -0.05 %), the object of promoting cricket remains intact and hence its income should be exempt from tax. The decision came in a November 2 order. BCCI had approached the Mumbai bench of the ITAT against three show-cause notices issued by the revenue department in 2016-17 to explain why the tax exemption that the BCCI enjoys under Section 12 A of the Income Tax Act should not be revoked for generating income through the IPL.  "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," said the bench of judicial member Ravish Sood and vice president Pramod Kumar, while rejecting the contention of the revenue department. According to the BCCI, the income tax department "erred" in emphasising the surplus generated from activities pertaining to IPL, without considering the overall activities of the appellant (cricket board) in a holistic manner and concluding that these don't qualify as sport promotion.
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