PILCOM Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) These two appeals have been filed by both the sides against the order of the Commissioner (Appeals) dated 28-12-1998. Since the issues involved are common in both the appeals, they have been consolidated and a common order is being passed for the sake of convenience.

(2.) The assessee before us is Pak-Indo-Lanka-Joint Management Committee (hereinafter referred to as the PILCOM), which is actually a committee formed by the Cricket Control Boards/Associations of three countries viz., Pakistan, India and Sri Lanka, formed for the purpose of conducting the World Cup Cricket Tournament for the year 1996 in these three countries. Actually, International Cricket Council (hereinafter referred to as the ICC) is a non-profit making organisation having its Headquarters at London, which controls and conducts the game of cricket in the different countries of the world. ICC has got nine full members and twenty associate members. In special meeting of ICC held on 2-2-1993 at London, India, Pakistan and Sri Lanka were selected, on the basis of competitive bids, to have the privilege of jointly hosting the 1996 World Cup Cricket Tournament. These three host countries were required to pay varying amounts to the Cricket Control Boards/Associations of different countries as well as to ICC in connection with conducting the preliminary phases of the tournament and also for the purpose of promotion of the game in their respective countries. For the purpose of conducting the final phase of the tournament in India, Pakistan and Sri Lanka, a Committee was formed by the three host members under the Name PILCOM. Two bank accounts were opened by PILCOM in London to be operated jointly by the representatives of Indian and Pakistan Cricket Boards, in which the receipts from sponsorship, T.V. rights, etc. were deposited and from which the expenses were met. The surplus amount remaining in the said bank account was decided to be divided equally between the Cricket Boards of Pakistan and India after paying a lump-sum amount to Sri Lanka Board as per mutual agreements amongst the three Boards. For the purpose of hosting the World Cup matches in India, the Board of Cricket Control of India (hereinafter referred to as the BCCI) appointed its own committee for discharge of its responsibilities and functions. This Committee was to be known as INDCOM. Since the Convenor-Secretary of INDCOM was functioning from Calcutta, necessary bank accounts were opened in Calcutta by INDCOM for receipts and expenditure relating to matches to be held in India. From the said bank accounts in London, certain amounts were transferred to the three co-host countries for disbursement of fees payable to the umpires and referees and also defraying administrative expenses and prize money. During the course of enquiry, it came to the knowledge of the Income Tax Officer (TDS), Ward-21(4), Calcutta that PILCOM had made payments to ICC as well as to the Cricket Control Boards/Associations of the different Member countries of ICC from its two London bank accounts. The Income Tax Officer issued a notice to the Office of PILCOM located at Dr. B.C Roy Club House, Eden Gardens, Calcutta-700 021 asking it to show-cause why actions under section 201(1)/194E of the Income Tax Act, 1961 would not be taken against PILCOM for its failure to deduct taxes from the payments made by it and as referred to above, in accordance with the provisions of section 194E. The PILCOM represented before the Income Tax Officer that the provisions of section 194E would not be attracted to the payments for various reasons to which we shall advert later on. It was furthermore stated that, inasmuch as, the books of accounts of PILCOM had not been completed by its Pakistani Treasurer, the said books could not be produced before the Income Tax Officer.

(3.) The PILCOM appealed against the said order passed by the Income Tax Officer and the Commissioner (Appeals) disposed of the appeal by his order dated 17-11-1997. In further appeal preferred by PILCOM before the Income Tax Appellate Tribunal, the Income Tax Appellate Tribunal, by its order dated 25-6-1990 in ITA No. 62/Cal./1998, set aside the order passed by the Commissioner (Appeals) and restored the matter back to his file for redeciding the issue after affording opportunity of being heard to PILCOM. Accordingly, the appeal was re-heard by the Commissioner (Appeals), in which both the sides were allowed ample opportunity to represent their respective cases and the Commissioner (Appeals) finally passed his appellate order on 28-12-1998, which is being challenged before us by both the sides.