Tax exemption to 4 cricket associations withdrawn

Four cricket associations—Saurashtra, Maharashtra, Baroda and Kerala—that found mention in a recent Comptroller and Auditor General (CAG) report will not be able to get tax exemptions as they are engaging in commercial activities.

The Income Tax authorities have looked into the affairs of the four cricket associations and have found that these cricket associations were engaged in certain activities, which were considered commercial in nature, a statement from Central Board of Direct Taxes said.

“The scrutiny of assessments in these cases has resulted in the withdrawal of tax exemption. Past assessments have also been reopened by the department to examine the correctness of their claim,” it said.

The CAG, in its report tabled in Parliament on December 12, 2013, said the Income Tax (I-T) Department allowed irregular exemptions on television rights from BCCI to four cricket associations resulting in non-levy of tax to the tune of Rs 37.23 crore.

It said under Section 2 (15) of the I-T Act, a public utility activity cannot be treated as “charitable” if it involves carrying out of activity in the nature of trade.