- (1.) This appeal under Section 260A of the Income-tax Act ("Act") is at the instance of an Assessee and is directed against an order dated November 05, 2003 passed by the Income-tax Appellate Tribunal, "C" Bench, Kolkata, in Income-tax Appeal bearing ITA No. 2094/Kol/2002 for the Financial Year 1995 96 dismissing the appeal filed by the Assessee.
(2.) Being dissatisfied, the Assessee has come up with the present appeal.
(3.) The facts giving rise to filing of this appeal may be summed up thus: a) The Assessee is a Committee of the Board of Control for Cricket in India (hereinafter referred to as "BCCI") and the present appeal arises out of the proceedings initiated under Section 201 read with Sections 194E and 115BBA of the Act for the Financial Year 1995 96. b) The cricket playing countries of the world are the members of International Cricket Council ("ICC"). Some are full members and some are associate members. The World Cup is the property of ICC and ICC decides as to which cricket playing country/countries should host the World Cup competition held every four years. c) ICC held a special meeting on February 2, 1993 in London to decide the venue of 1996 World Cup Competition. At the said meeting, Pakistan, India and Sri Lanka were selected to have the privilege of co-hosting the competition and for grant of the said privilege, Pakistan, India and Sri Lanka made a financial offer and/or bid of ?50,00,000 which was accepted at the said meeting. Payments required to be made in terms of the bid by the three host countries to ICC and to the participating and non-participating countries were decided and/or approved by ICC at London at the said meeting. d) It was decided that there should be 37 matches in the competition of which it was agreed that India would host 17, Pakistan 16 and Sri Lanka 4 matches. Each country was concerned with only the leg of the tournament being played in that country and the expenditure and the receipts relating thereto and the surplus/deficit there from but was to co-ordinate with each other so that the competition went off smoothly. e) After the selection of three countries as co-hosts, in order to facilitate co-ordination between them, a committee formed consisting of representatives of BCCI, the Board of Control for Cricket in Sri Lanka, Pakistan Cricket Board and ICC. The said committee was initially named as Pak-Indo and Lanka Joint Management Committee and subsequently referred to as Pak-Indo-Lanka Committee abbreviated to Pilcom. f) Each country was required to bear and pay the expenses incurred for matches played in that country and was entitled to the receipts flowing from such matches. However, there were certain common expenses, viz. for bringing the teams to the sub-continent, payments for bid money to ICC and non-participating and participating countries, expenses and fees of Umpires and Referees, Administrative expenses of teams, prize money, cost of cricket balls, etc. ('common pool expenses'). Similarly, there were certain receipts such as for International T.V. rights and title sponsorship etc. ('common pool receipts') which were paid by the persons concerned in lump sum for all the world cup matches wherever played. It was in order to facilitate the collection of such receipts and payment for expenses that the Committee PILCOM opened bank accounts including at London. The Committee PILCOM was to maintain an account of such common pool receipts and expenses only for the sake of convenience. g) Whatever amount passed through the hands of the Committee PILCOM did not belong to it and was not on its own account but was for or on account of the Indian Board or the Pakistan Board or the Sri Lanka Board as the case may be in accordance with their respective entitlements/obligations. No part of the amounts received or disbursements made by the said committee were for or on its own account. h) To host the World Cup matches in India as co-host, BCCI appointed its own committee for discharge of its responsibilities and functions. BCCI in its special general meeting held on May 14, 1993 appointed Sri Madhav Rao Scindia as the Chairman of such committee giving him a free hand to nominate the other members. All the members of the said committee were members of BCCI and Sri K. L. Chiugh, who represented the sponsor of ITC Ltd. was a special invitee. The said committee for convenience and reference came to be referred to as INDCOM. i) For the purpose of disbursement of administrative expenses of teams, Umpires and Referees' fees and prize money in respect of the matches to be played in India, amounts were transferred from PILCOM's London Bank Account to the foreign currency account of INDCOM with Indian Overseas Bank. j) On May 6, 1997, two orders were passed by the Income-tax Officer in the names of INDCOM and PILCOM holding that they were liable to deduct the tax under Section 194E of the Act. The amount in respect of INDCOM was quantified by the Income-tax Officer at Rs. 8,95,896.15 as representing the tax which should have been deducted at source in respect of payment made towards team administrative expenses, fees paid to Umpires and Referees and prize money. k) Being dissatisfied, the Assessee preferred an appeal and the Commissioner of Income-tax (Appeals) by two separate orders both dated November 17, 1997 rejected the appeals of INDCOM and PILCOM against the said order dated May 6, 1997. l) On appeal, Income-tax Appellate Tribunal disposed of the appeals of INDCOM and PILCOM against the said orders dated November 17, 1997 accepting their preliminary contention that natural justice was violated in passing the orders dated November 17, 1997 inasmuch as the Appellants were not granted any opportunity to make their submissions in respect of the contention of the Income-tax Officer contained in his letter dated July 30, 1997 and urged by him at the hearing granted to him on that day by the Commissioner of Income-tax (Appeals). The Tribunal did not decide the matter on merits and directed that the appeals should be re-decided after affording an opportunity of hearing to the Appellants in respect of the submissions/arguments made by the Income-tax Officer. m) Thereafter, the Commission of Income-tax (Appeals) took up both the appeals of INDCOM and PILCOM. The Appellants were provided with copies of the para-wise comments dated July 30, 1997 of the Income-tax Officer and by an order dated December 28, 1998, the Commissioner of Income-tax (Appeals) decided the PILCOM's appeal. n) On an appeal by the Appellant, the Tribunal by order dated January 4, 2000 decided the appeals of the department as well as PILCOM against the said order dated December 28, 1998 of the Commissioner of Income-tax (Appeals). The Tribunal, inter alia, held that only the payment made to the cricket associations of different countries referable to the matches played by those countries in India could be considered for the purpose of tax deduction/taxation. The said order dated January 4, 2000 of the Tribunal is the subject-matter of appeal under Section 260A of the Act filed by PILCOM before this Court. o) INDCOM's appeal was decided by the Commissioner of Income-tax (Appeals) by an order dated March 26, 2002. By the said order, the Commissioner of Income-tax (Appeals) held that payments on account of administrative expenses and prize money to the Indian team and Indian players and fees paid to Indian Umpires and Referees as also the bank charges were outside the purview of Sections 194E and 115BBA and vacated the demand in respect thereof. However, he confirmed the demand in respect of administrative expenses paid to foreign teams and fees paid to foreign Umpires and Referees for matches officiated in and outside India save and except for the modification that the proportionate amount referable to the matches played outside India was not to be taken into consideration. He also confirmed the demand in respect of prize money paid to foreign teams and foreign players. p) Being dissatisfied, the Assessee preferred an appeal before the Tribunal and the submissions of the Appellants were as follows: (a) (i) Payments to Managers of foreign Cricket teams on account of Administrative expenses like stationery items, typing expenses, telephone calls, xerox expenses, etc. required to be incurred while a tour for the World Cup matches were not income and were also not so specified in Section 115BBA and no order for tax deduction could have been passed in respect thereof. ii) Further and in any event and without prejudice to the aforesaid of the 7 foreign teams to whom payments were made, India had double taxation avoidance agreements with five of them namely, Australia, Kenya, New Zealand, Holland and Sri Lanka and in view thereof, payments made to the said five Countries were not liable for Taxation/Tax-deduction in India. (b) (i) Umpires and Referees were not sportsman and fees paid to them did not tall within the purview of Sections 115BBA/194E. ii) Further and in any event and without prejudice to the aforesaid, payment of ?27450 was made to Umpires and Referees of Kenya, New Zealand, Sri Lanka, United Arab Emirates and England. India had double taxation avoidance agreements with all five Countries and in view thereof, the said payments could not be subject matter of tax-liability or tax-deduction in India. The relevant provisions of the different agreements were as under: JUDGEMENT_576_TLCAL0_2011_1.html;