Before the start of cricket world cup, the government wants to settle the tax evasion dispute with the Board for Cricket Control in India (BCCI).
The BCCI is already facing Income Tax probe over alleged tax evasion worth Rs 566 crore for two years ending 2009-10. The board had claimed exemption to Rs 421 crore income for 2008-09 and Rs 145 crore for 2009-10.
However, the department is not keen to accept the exemption saying it was for Indian Premier League, which did not fall within exemption given to regular sports.
In a bid to find a middle path, the Sports Ministry has called a meeting with BCCI and the Income Tax department officials next week.
"The BCCI has been a generous and biggest donor to the National Sports Fund," Youth and Sports Affairs minister Ajay Maken told HT.
In the last three years, the board, richest sports body in India, has given about Rs 50 crore for the fund. The money is being used to train sportspersons for the London Olympics next year. It is the biggest donation from any individual or a sports body to the national fund.
For the ministry, pursuing the cause of BCCI will be tough as it is a private body unlike other sports federations, which are societies having certain accountability to the government.
"The BCCI has claimed itself to be a private body exempted from any government interference. Therefore, it seeking tax exemption is not legally very sound," a ministry official said.
But the ministry is looking at the possibility of striking a compromise between the BCCI and the Income Tax department. As per rules, the department can impose penalty of 100 to 300 times for not paying the tax. The BCCI has already filed an appeal with Income Tax Appellate Tribunal for seeking exemption.