Amol Karhadkar is a correspondent at ESPNcricinfo
The BCCI has been hit with a Rs 2300 crore (approx $433m) notice from the income tax department and has asked its treasurer Ajay Shirke to suggest how to deal with the issue.
The BCCI working committee met in Chennai on Monday and discussed the matter in detail. President N Srinivasan explained to the working committee that the tax-related issues have compounded since the BCCI changed its objectives in 2006, Mail Today has reported.
Since the BCCI is registered as a charitable trust, it used to get various tax exemptions on the grounds of promoting cricket as a 'charitable activity'. But after the BCCI amended its objectives in June 2006, the government has started considering the BCCI to be earning income through 'commercial' means, it was explained to the working committee.
The bone of contention has been the income generated through sale of IPL franchises and through sale of broadcast rights for the Twenty20 league. While the BCCI claims it distributes a "major portion" of the income generated to its affiliated units (ie the state and regional associations), the tax authorities have been reportedly seeking taxes both from the parent body as well as affiliated units.
It was learnt that Shirke has been asked to chalk out the path ahead "within a fortnight" so that the BCCI can "sort out" all the impeding issues with the tax authorities.