ITAT allows tax exemption to Kapil Dev on ₹1.5 crore given by BCCI for service to cricket

The Income Tax Appellate Tribunal (ITAT) recently granted relief to former cricketer Kapil Dev, ordering that ₹1.5 crore he received from the Board of Control for Cricket in India (BCCI) as a one-time benefit for his services to the game, is not taxable [Kapil Dev Nikhanj v ACIT]..A coram of M Balaganesh, Accountant Member and Madhumita Roy, Member Judicial said that the money received by the legendary cricketer as a one-time benefit would be eligible for exemption under Section 56(2)(vii) of the Income Tax Act, 1961 because BCCI is a trust or institution registered under Section 12AA. “Hence, respectfully following the same, we do not deem it fit to restore this appeal to the file of Learned CIT(A) for de novo adjudication and instead decide the issue here itself as the issue is already covered and the provisions of the Act are very clear in this regard. Accordingly, the grounds raised by the assessee [Dev] are hereby allowed,” the Tribunal concluded. .The issue goes back to the filing of the return of income for the assessment year 2013-14. Dev voluntarily offered the one-time benefit received from BCCI for taxing while filing returns. The revised assessment filed later was processed with the one-time benefit being taxed. After some tribunal decisions, Dev was advised that the benefit received would be exempt from tax in terms of Section 56(2)(vii) of the IT Act. He filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] with a delay of 1,993 days. Dev also filed an affidavit explaining the reasons for the delay. The CIT(A) did not condone the delay and dismissed the appeal at the outset. .However, the ITAT has now said that the only right amount of tax should be collected from the right person in accordance with law and Article 265 of the Constitution provides that no tax could be collected except by an authority of law.“When a statute specifically provides a particular exemption of a particular receipt from tax, the said receipt cannot be brought to tax merely because the assessee had offered erroneously in the return of income. Ultimately, income is to be determined in accordance with the provisions of the Act and revenue cannot take advantage of ignorance of the assessee while determining the taxable income,” the tribunal underlined. It did not see it fit to restore the appeal before the CIT(A) for a fresh decision and instead decided the issue in Dev’s favour. .Kapil Dev was represented through advocates Jasmeet Singh and Saif Ali..[Read Order]