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IT dept cancels PCA’s tax exemption
Says it is indulging in commercial activity
Anuja Jaiswal
Tribune News Service

Chandigarh, March 31
In a significant order, the Income Tax Department today cancelled the tax exemption certificate 12(A) issued to the Punjab Cricket Association (PCA) as a charitable institution on grounds that it was indulging in widespread commercial activity.

The order, which comes 11 days after the IT authorities conducted a day-long survey at the PCA’s Mohali stadium, makes it liable of paying not only all future taxes but also of the last fiscal. While the exact liability of the association was not known immediately it could run into anything between Rs 20 crore to Rs 30 crore for 2008-09, with major earnings coming from the IPL.

Confirming the move, AK Kaushal, Income tax Commissioner (CITI), told The Tribune that the PCA’s exemption was cancelled from financial year 2008-09 onwards. He said as per the modified Finance Act 2008, no commercial activity can be allowed by a charitable organisation which is exempted under Section 12 (A) of the Income tax Act, said Kaushal.

According to sources, the association was earning crores of rupees from the “various” activities, which include a club, a swimming pool, a bar and a restaurant and banquet hall, going on at the PCA stadium. Besides, it had also earned over Rs 25 crore alone for granting TV rights for the telecast of the IPL.

Sources said a preliminary scrutiny of the PCA’s accounts books had revealed that it’s tax liability for the last fiscal after interest could cross Rs 20 crore. Senior officials were, however, tightlipped about the exact amount.

When contacted G.S. Walia, joint secretary of the PCA, said: “We haven’t received any communication from the department yet. If they have passed such order, we will approach the courts and follow the legal procedure.”

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