New Delhi: Public Accounts Committee (PAC) of Parliament has pulled up Central Board of Direct Taxes (CBDT) for impeding the due process of law and giving 'handle' for delaying tax assessment by PILCOM, a body of cricket Boards of India, Pakistan and Sri Lanka, which earned Pounds 5 million by hosting 1996 World Cup.
In its report tabled in Parliament on Tuesday, PAC said CBDT had not only impeded the due process of law but also aborted the Income Tax proceedings by 'usurping' the statutory powers of a subordinate authority by issuing two conflicting directives to Income Tax authorities in Kolkata. CBDT had first declared that PILCOM would not be liable to income tax being "not an association of persons" and that BCCI, which was a constituent of PILCOM, may be treated as an "agent" for the PILCOM, but subsequently nullified the earlier instruction. Such an action by CBDT "interfered or obstructed the assessment proceedings" initiated against PILCOM (Pakistan-India-Lanka Joint Management Committee) by IT authorities in Kolkata." The committee also accused CBDT of not treating this issue of income-tax status of PILCOM with "clarity or conviction". The committee also wanted CBDT to draw suitable lessons from this incident so that its discretionary powers under Section 119 of the IT Act are exercised in a manner not to oust statutory powers of subordinate authorities. It also decided that the Finance Ministry formulates guidelines to deal with demands for such tax exemptions.