Evading taxes for long by calling itself a charitable organisation, the Board of Control for Cricket in India may now have to shell out more than Rs 100 crore, as the income tax department is set to penalise it for concealing details of its commercial activities.
The IT departement has passed an order terming the BCCI a commercial organsiation and not a charitable one.
Sources in the Central Board of Direct Taxes confirmed that an order was passed by the Exemptions unit of the department in Mumbai. They said the BCCI has not informed the tax department about a number of its activities, like establishing coaching centres, conducting Twenty20 tournaments and other commercial ventures within and outside the country.
The order, said the sources, was passed after it was found that the BCCI does not meet the criteria of being a charitable institution, as it has shared the profits of the commercial activities only on players salaries and operation of other ventures which bring in more business and money.
"The element of benevolence and promotion of the sport (cricket) was not found after the scrutiny of tax related returns," they said.
The BCCI's reply to the order is awaited.
The withdrawl of exemptions will happen from the assessment year 2006-07 and penalty will be calculated accordingly.
