Having swung fully into the probe of the Indian Premier League affair, the Income Tax (Invetsigations) unit of Mumbai has now served a 10-point summons including one on accounts to the Board of Control for Cricket In India (BCCI). The cricket board has to furnish details of the same by April 23.
The summons (a copy of which is in possession of TOI), asks the BCCI to produce all bidding documents of all the IPL franchisees, documents relating to ownerships/shareholding of the franchisees, names and addresses of the entities/owners, details of deposits/advances made by the franchisees to IPL/BCCI, details of payments made to these franchisees by IPL/BCCI in the form of income or capital, balance sheet/profit & loss account of IPL since inception, balance sheet/profit & loss account of BCCI indicating income/receipts from IPL, explanation on the manner in which the income has been treated in the accounts, details of amount of any kind received from all parties who had undertaken transactions with IPL and details of auction of players of each team and the condition of payments/details of payments made.
Apart from the BCCI secretary and treasurer a copy of the summons has also been sent to the IPL Commissioner Lalit Modi. The summons were served on April 16.
Sources said that it is likely that the BCCI has been evading taxes citing itself to be an autonomous body promoting cricket as a charity. Thanks to the IPL, tax exemption to BCCI was withdrawn in November 2009.
Interestingly, the IPL is not a tax entity as yet but the BCCI will now surely come under the tax net, added sources. The investigation is a detailed one and is expected to take a few months for the assessment.
Following assessment of BCCI for 2006-07, the tax department had raised a demand of Rs 118 crore, including penalties and interest. During the year, BCCI had a total income of Rs 224 crore.
The BCCI had already paid part of the taxes but challenged the notice in the Income Tax Appellate Tribunal-Mumbai (ITAT) against the decision of the revenue department to withdraw the tax exemption given to it earlier. Central Board of Direct Taxes sources further said that the tax authorities would scrutinize the returns of the BCCI for 2007-08 and 2008-09 and raise demands.
The BCCI has not paid any advance tax till now and hence the tax liability will also include interest and penalties, they said.
BCCI, which is registered as a society, files returns in Mumbai. In June 2007, the cricket body had changed its memorandum of association to undertake commercial activities like the IPL.