Lalit Modi is not the only one under investigation by the Income Tax department; the BCCI, it appears, is swimming in the same troubled waters.
Following the seizure and scrutiny of document in the probe so far, I-T authorities say the BCCI is equally responsible as it is an official party in all agreements and transactions pertaining to the IPL.
An I-T official said that authorized persons have signed all the major documents pertaining to contracts between IPL, its franchisees and others, on behalf of the BCCI.
The board is a charitable trust registered under Section 12 (A) of the Income Tax Act. Its mandate is to promote and develop cricket in the country and the IPL is sub-committee of the BCCI.
Tax authorities are contesting this claim on the on the grounds that the IPL, which they consider a wholly commercial undertaking, is promoted by the board.
“When the time comes, BCCI would have to face action as they are officially attached to the IPL and the documents seized so far prove that,” the official said.
The major concern for the BCCI would be the payment of a facilitation fee, basically commission, by Multi-Screen Media (MSM) to World Sport Group (WSG) over telecast rights for the tournament. Recent I-T raids have revealed that MSM agreed to pay Rs 400 crore to WSG to make it the official broadcaster of IPL matches on Set Max.
“The documents pertaining to the broadcast rights between WSG and MSM have also been signed by the BCCI,” the official said. He added that if the department fails to recover tax from MSM or WSG, in this matter, BCCI could be held as “representative assessee” and asked to pay the same.
{{/usCountry}}“The documents pertaining to the broadcast rights between WSG and MSM have also been signed by the BCCI,” the official said. He added that if the department fails to recover tax from MSM or WSG, in this matter, BCCI could be held as “representative assessee” and asked to pay the same.
{{/usCountry}}The international taxation department is investigating the overseas links in the case.
“If it is found that the official contract (not the facilitation fee contract) signed between WSG and MSM is genuine and the companies would be paying the tax in the respective countries where they are registered, that part of the case would be closed,” the official said.
He, however, added that the facilitation fee part would still remain under investigation as it is suspected to be a bribe. The I-T authorities also believe that the money was round tripped and invested in the IPL itself.
“In this case, the BCCI could be held responsible and made representative assessee for recovering the tax, in extreme circumstances,” the official said.