Bombay HC gives BCCI breathing room in tax exemption case

The Bombay High Court has quashed an order of the Income Tax Department regarding the tax exemption status to the Board of Control for Cricket in India (BCCI).

According to a report by Bar & Bench, the BCCI was granted tax exemption status on 12 February 1996, which was modified in 2006 and 2007 without notifying the tax authorities.

Subsequently, the Director of Income-tax (Exemptions) issued a communication in 2009, saying that the BCCI's status "does not survive from the date on which the objects were changed, that is June 1, 2006", the Bar & Bench report stated.

However, the bench of Justices MS Sonak and Jitendra Jain have quashed the communication arguing that it does not amount to withdrawal of the registration granted to BCCI.

Additionally, the HC left the issues of exemption or cancellation of registration on merits open as it would be decided by the prescribed statutory authorities.

The Income Tax Appellate Tribunal (ITAT) has ruled that BCCI's plea was nonmaintainable as the department's communication to the cricket board was not a cancellation or withdrawal of its registration under Section 12A of the Income Tax Actor. But ITAT had examined the merits of communication which prompted BCCI to move to the Bombay High Court.