Relief to Kapil Dev: ITAT Exempts Former Captain Income Tax on ₹1.5 Crore One-Time Benefit Awarded by BCCI [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently granted relief to former Indian cricket captain Kapil Dev, ruling that the ₹1.5 crore he received as a one-time benefit from the Board of Control for Cricket in India ( BCCI ) will not be subject to income tax.

The present appeal arose out of an Order of the Commissioner of Income Tax (Appeals)-37, New Delhi after he filed his returns of income for the Assessment Year (A.Y.) 2013-14 declaring a taxable income of ₹4,26,28,830, later filing a revised return of declaring a taxable income of ₹4,26,28,830. The Assessee had later offered to pay tax on an amount of ₹1.5 Crore that he had received from the BCCI as a recognition in terms of his services to Indian Cricket in international and domestic levels.

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However, on the basis of the decision rendered by a coordinate Bench of the ITAT in a similar case involving a cricketer in Maninder Singh Vs ACIT (2019), Kapil Dev was advised to claim a reduction of income of the ₹1.5 Crore, claiming its exempt status under Section 56(2)(vii) of the Income Tax Act, 1961.

Acting on this advice, he filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] after a delay of 1,993 days, explaining the delay through an affidavit. The CIT(A) refused to condone the delay and dismissed the appeal outright.

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Jasmeet Singh and Saif Ali representing Kapil Dev argued before the ITAT that the one-time benefit was a gratuitous receipt and should be exempt under Section 56(2)(vii) of the Income Tax Act, 1961 while relying on the decision in Maninder Singh.

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On the contrary, the Revenue, represented by Senior Departmental Representative Om Parkash, contended that Dev had initially accepted the taxability of the benefit by including it in his return and had not revised his return within the permissible time limit. The Revenue cited the Supreme Court’s decision in Goetze India Ltd v. CIT (2006) to argue that fresh claims cannot be entertained unless made in the original return.

The Tribunal, consisting of M. Balaganesh, Accountant Member, and Madhumita Roy, Judicial Member observed that while the decision in Goetze India restricted assessing officers from entertaining new claims outside the return, it did not limit the powers of appellate authorities.

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The Tribunal found sufficient cause for the delay in Dev’s appeal and emphasized that Article 265 of the Constitution mandates that no tax can be collected except by the authority of law, noting that a statutory exemption cannot be denied merely because an assessee mistakenly offered the amount to tax.

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Maintaining precedence with the decision in Maninder Singh, the Tribunal allowed the appeal and ruled that the sum of ₹1.5 crore received by Kapil Dev from BCCI is not taxable under the provisions of the Income Tax Act, 1961.

To Read the full text of the Order CLICK HERE

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