ITAT: Income Tax Exemption can’t be denied to BCCI merely because IPL is structured in more Profitable Manner

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) ruled that Income Tax Exemption cannot be denied to the Board of Control for Cricket in India (BCCI) merely because IPL is structured in a more profitable manner.

Facts of the case:-

The appellant, 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.

The BCCI has submitted that the income tax department “erred” in emphasizing 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 sports promotion.


The bench of vice president Pramod Kumar and  judicial member Ravish Sood, while rejecting the contention of the revenue department held that 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 mobilization of resources, the basic character of activity of popularising cricket is not lost

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.

“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,” the tribunal said.

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