In a significant relief for the Board of Control for Cricket in India (BCCI), the Bombay High Court has set aside an Income Tax Department communication that questioned the board’s tax-exempt status. The ruling comes as a major victory for the cricketing body, which has long enjoyed tax exemptions for its role in promoting sports in India.

The controversy stemmed from the Income Tax Department’s claim that BCCI had failed to notify authorities about amendments made to its Memorandum of Association in 2006 and 2007. According to the department, these changes automatically led to the loss of BCCI’s tax exemption. The tax authorities argued that the amendments facilitated commercial activities—particularly with the rise of the Indian Premier League (IPL)—thereby shifting the board’s primary focus from sports promotion to revenue generation.

BCCI, however, contested this view, maintaining that its fundamental objective of promoting cricket remained unchanged. The board initially took the matter to the Income Tax Appellate Tribunal (ITAT) before escalating it to the Bombay High Court through an appeal and a writ petition.

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The ITAT had earlier ruled that the tax department’s letter was merely advisory and did not amount to an official cancellation of BCCI’s tax-exempt status. However, the tribunal also noted that the exemption could not be automatically extended to the board’s amended objectives, hinting at potential concerns over the organization’s commercial ventures.

The Bombay High Court has quashed an Income Tax Department advisory questioning BCCI’s tax-exempt status.#BCCIhttps://t.co/7HW6aexyOJ

— India Today Sports (@ITGDsports) February 18, 2025

Representing the Income Tax Department, advocates P.C. Chhotaray and Suresh Kumar contended that the department never revoked BCCI’s registration but simply informed the board that its tax-exempt status—granted under its original objectives—was no longer valid due to the amendments. They further argued that BCCI had failed to notify the Director of Income Tax (Exemptions) about the changes, a requirement necessary to retain its exemption.

After reviewing the case, a division bench of Justices M.S. Sonak and Jitendra Jain ruled that the ITAT had overstepped its jurisdiction by delving into the merits of the case after declaring BCCI’s appeal non-maintainable. The court clarified that the Income Tax Department lacked the authority to issue an advisory or non-statutory order regarding BCCI’s tax exemption.

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The bench emphasized that any decision on BCCI’s tax status must follow due statutory procedures rather than be based on a mere advisory letter. The ruling directs tax authorities to conduct an independent assessment of BCCI’s tax-exempt status while disregarding the contested communication.