Irregular tax exemptions given to cricket associations, says CAG

Government auditor CAG on Friday slammed the Income Tax Department for extending irregular exemptions to four cricket affiliates of BCCI, resulting in short-levy of tax of over Rs 37 crore.

The Comptroller and Auditor General (CAG) in its report tabled in Parliament said the I-T Department allowed irregular exemptions on income from TV rights given to four Cricket Associations engaged in commercial activity, which led to short levy of tax of Rs 37.23 crore.

‘I-T Department allowed exemption in four... cases for income received from TV rights from BCCI in cases of Saurashtra Cricket Association, Baroda Cricket Association, Kerala Cricket Association and Maharashtra Cricket Association resulting in short levy of tax of Rs 37.23 crore,’ it said in a report tabled in Parliament.

The CAG said under Section 2 (15) of the Income Tax Act, a public utility activity cannot be treated as ‘charitable’ if it involves carrying out of any activity in the nature of trade, commerce or business.

Referring to the Saurashtra Cricket Association case, CAG said the body has collected TV subsidy of about Rs 35 crore in three years, but spent only a small amount on promotion and development of sport, accumulating Rs 19.44 crore.