Relief to BCCI: Bombay HC quashes Revenue Order Prohibiting Income Tax Exemption for Lack of Statutory Power [Read Order]

The Bombay High Court delivered a significant ruling on Tuesday (18 February, 2025), quashing an order by the Commissioner of Income Tax (Exemptions)  ( CIT(E) ) which deemed the Board of Control for Cricket in India ( BCCI ) ineligible for tax exemption under Section 12A of the Income Tax Act, 1961; the Bombay High Court observed the lack of statutory power exercisable by the CIT(E) to deny such exemption.

The Appellant-Petitioner BCCI is a society registered under the Tamil Nadu Societies Registration Act, 1975 and was granted registration under Section 12A of the Income Tax Act, 1961 on February 12, 1996.

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The  Section 12A registration enabled the BCCI to claim tax exemption on the grounds that it was a charitable institution promoting sports. The issues leading up to the present case began when BCCI amended its Memorandum of Association (MoA) on June 1, 2006, and August 21, 2007 without formally intimating the tax authorities of the same.

On December 28, 2009, the Director of Income Tax (Exemptions) ( DIT(E) ) issued a communication stating that due to the amendment of the MoA, the registration held by BCCI under Section 12A ceased to survive from the date of such amendments. The Revenue further apprised them of the provision to file a fresh application for registration under Section 12AA of the Income Tax Act, 1961.

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The BCCI unsuccessfully appealed before the Income Tax Appellate Tribunal ( ITAT ) who ruled that the impugned communication was merely advisory and not a formal order of cancellation and thus the appeal was not maintainable before them. Aggrieved by the order, the present matters had been instituted before the Bombay High Court.

Senior Advocate P. J. Pardiwalla, along with Nitesh Joshi appearing for BCCI contended that the impugned communication in essence amounted to the cancellation of BCCI’s registration while lacking any statutory authority to effectuate the same.

He further emphasized that the statutory amendment requiring a trust or institution to inform the authorities about any changes in its objectives as per Section 12A(1)(ab)) came into force only in 2018, much after BCCI had made amendments in their Memorandum.

Meanwhile, P C Chhotaray and Suresh Kumar representing the Revenue argued that the impugned communication was not an order but a mere advisory informing BCCI of the consequences of amending its objectives without intimation.

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A Division Bench of Justice M. S. Sonak and Justice Jitendra Jain observed that once the ITAT deemed the impugned Appeal as non-maintainable there was no scope for it to further evaluate the same on its merits, the same being an overreach of its jurisdictional powers.

The Bombay High Court proceeded to quash the impugned December 28, 2009 communication while reiterating that the question of BCCI’’s eligibility for income tax exemption or cancellation of registration is one to be determined by the prescribed statutory authorities in the manner prescribed under the statute without being influenced by either the impugned communication of the Revenue or the ITAT order therein.

To Read the full text of the Order CLICK HERE

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