Quick Summary
In a significant relief to the Board of Control for Cricket in India (BCCI), the Bombay High Court has set aside an advisory issued by the Income Tax Department, which questioned the board's tax-exempt status. The ruling underscores that any changes to BCCI's tax treatment must follow the due statutory process rather than an advisory letter. Background of the Tax Dispute The controversy began when the Income Tax Department alleged that BCCI's failure to notify authorities about amendments to
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FAQ :
The Bombay High Court quashed an advisory issued by the Income Tax Department that questioned the BCCI's tax-exempt status, stating that any changes must follow due statutory process.
The Income Tax Department alleged that the BCCI's failure to notify authorities about amendments to its Memorandum of Association in 2006 and 2007 led to an automatic loss of tax exemption, as these amendments were believed to facilitate commercial activities.
The BCCI argued that the amendments to its Memorandum of Association did not affect its core objective of promoting cricket and that its tax exemption as a charitable institution promoting sports should remain.
Yes, the ITAT had previously deemed BCCI's appeal non-maintainable and made observations on the merits of the tax exemption, which the High Court found to be an overstep of jurisdiction.
The court observed that the Income Tax Department lacked the authority to issue advisory notices questioning tax status, that due process must be followed, and that an independent assessment of BCCI's tax-exempt status is required.
The ruling sets a precedent for sports bodies and non-profit organisations, emphasising the importance of procedural compliance when making amendments to governing documents and reaffirming that statutory procedures must be followed before withdrawing tax exemptions.
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