ITAT said that IPL is a sports promotional event.
The world’s most powerful cricket body BCCI has got a big victory against the tax department. The Income Tax Appellate Tribunal (ITAT) has given a big relief to the BCCI, saying that it will not have to deposit tax on the earnings from the IPL tournament. He said that IPL is a sports promotional event.
ITAT said that there is no doubt that BCCI earns crores from IPL every year, but it cannot be denied that it is an event to promote cricket. Therefore, tax cannot be charged on the income earned from it. In fact, the Revenue Department had issued three show-cause notices to the BCCI in the financial year 2016-17. In this notice, the Revenue Department had asked the cricket governing body on what basis it is availing tax exemption under Section 12A of the Income Tax Act. Against this, the BCCI had approached the Mumbai ITAT Bench. ITAT has ruled on this appeal.
IPL is a promotional event hence not taxed
While pronouncing the verdict, the Appellate Tribunal said that the BCCI has designed the IPL tournament in such a way due to which its popularity is very high. Due to its popularity, there is a flood of sponsorship here and crores are earned. However, it cannot be denied that this event is meant to promote cricket.
Tax department is calling it entertainment activity
On the other hand, the tax department says that IPL is like an entertainment tournament. In such a situation, the liability of tax becomes on the income earned from it. Talking about the activities in IPL, it is related to trade, commerce and business.
What will be the effect of this decision on the public trust
This decision of ITAT is going to have a serious impact on the activities of the public trust. Tax experts say that it is possible that trusts also adopt this path now. However, this will not be applicable for private trusts. Explain that according to section 12A of the Income Tax Act, a public trust has to inform the principal commission about its activities.
Also read: Inflation hit! The rich are more vulnerable than the poor
Also read, IPO of this company got the highest subscription in history, 882 times subscribed