New Delhi:The Board of Control for Cricket in India (BCCI), world's richest board, will have to shell out a whopping Rs 120 crore in tax and pay a penalty too. The Income Tax department has revoked tax exemptions to the board saying there is nothing charitable about it.
An order to this effect was served on December 30 by the Exemptions unit of the department in Mumbai.
Tax exemptions had been granted to the BCCI on the grounds that promoting cricket was a charitable activity. The I-T department, however, said the board has now become totally commercial and its activities cannot called charitable as it has shared the profits of the commercial activities only on players salaries and operation of other ventures which bring in more business and money.
"The BCCI has become totally commercial and it is more into prize money for every run or wicket," the department said.
While revoking the exemptions, the I-T department has also accused the BCCI of changing its rules to include T20 matches without informing the department of this new commercial venture.
It further bolstered its case by pointing out that the BCCI had done little to develop infrastructure for cricket.
"The element of benevolence and promotion of the sport (cricket) was not found after the scrutiny of tax related returns," sources said.
The withdrawal of exemptions will happen from the assessment year 2006-07 and the amount of penalty will be calculated accordingly, sources said.
Howver, the Indian cricket board has said it will to appeal against the order of the I-T department.
"BCCI is a registered charitable institution. I am not aware under what circumstances they (the I-T Department) have made this assessment that we will have to pay Rs 120 crore as tax. However, we are yet to receive their order and once we get it, we will appeal against it," Board treasurer MP Pandove said.
The BCCI official said as of now, he had only learnt about the order through media reports.
"Once we get the order, we will study it and then go in for appeal," he said.
(With PTI inputs)