The Income Tax Appellate Tribunal (ITAT) has exempted Kapil Dev from income tax on Rs. 1.5 Crore granted by Board of Control for Cricket in India (BCCI) as a one-time benefit while recognising his services to cricket.
The bench of Madhumita Roy (Judicial Member) and M. Balaganesh (Accountant Member) has observed that one-time benefit received from BCCI in recognition of services would be eligible for exemption under Section 56(2)(vii) of the Income Tax Act as BCCI is a trust or institution registered under Section 12AA of the Income Tax Act.
The issue raised was whether the one-time benefit received from by the assessee from Board of Control for Cricket in India (BCCI) as a one-time benefit could be subjected to tax.
The appellant/assessee, Kapil Dev is a former well renowned cricketer who had represented India in many international matches across the world. The return of income for the assessment year 2013-14 was filed by the assessee under section 139(1) of the Act on 30-09-2013 declaring taxable income of Rs 4,66,28,830.
The assessee filed a revised return on 27-12-2013 declaring taxable income of Rs. 4,26,28,830 and the revised return was duly processed under section 143(1) of the Act. During the year under consideration amongst other incomes offered to tax in the return, the assessee had also offered to tax a sum of Rs 1.50 crores which he had received from BCCI as a one-time benefit in recognition of his services to Indian cricket in international and domestic levels.
The assessment was completed under section 143(3) of the Act on 21-01-2016 after enhancing the income under the head income from house property to the tune of Rs 36,51,115/- and assessed income was determined at Rs 4,62,79,940.
No appeal was preferred by the assessee against this assessment order as the assessee had accepted to the addition made by the AO in the assessment. Later, the assessee was advised that the one-time benefit received from BCCI in recognition of his past services to Indian cricket in the sum of Rs 1.50 crores is exempt under section 56(2)(vii) of the Act and there were certain decisions which were rendered by the Tribunal in support of the same.
Pursuant to the subsequent development, the assessee preferred an appeal before the CIT (A) with a delay of 1993 days. The assessee filed a detailed affidavit explaining the reasons for the delay and proving the sufficient cause there on. The CIT (A), however, did not condone the delay and dismissed the appeal of the assessee in limine.
The tribunal while allowing the appeal held that the right amount of tax should be collected from the right person in accordance with law. 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.
Case Details
Case Title: Kapil Dev Nikhanj Versus ACIT
Case No.: ITA No. 1770/Del/2023
Date: 13/03/2025
Counsel For Appellant: Jasmeet Singh
Counsel For Respondent: Om Parkash
Read More: IPL Ticket Prices Soar as Fans Pay Over 70% Tax on Entry Fees
