New Delhi: The Supreme Court Wednesday said that the Pak-Indo-Lanka joint management Committee (PILCOM), which was formed for the purpose of conducting 1996 cricket world cup, was liable to deduct tax at source for payments made to non-resident sports associations for the tournament.
PILCOM was a committee formed by the cricket boards or associations of Pakistan, India and Sri Lanka for the purpose of conducting the 1996 Cricket World Cup tournament which was jointly hosted by these three countries.
The apex court said that payments made to the non-resident sports associations for the tournament represented their income which accrued or deemed to have arisen in India.
A bench comprising Justices U U Lalit and Vineet Saran delivered its judgement on an appeal filed by PILCOM, challenging the November 2010 order of the Calcutta High Court in this regard.
"In the premises, it must be held that the payments made to the non-resident sports associations in the present case represented their income which accrued or arose or was deemed to have accrued or arisen in India. Consequently, the appellant (PILCOM) was liable to deduct tax at source in terms of section 194E of the Act," the bench said, while dismissing the appeal of PILCOM.
Income tax (IT) department found out that PILCOM had made payments to ICC as well as to cricket control boards or associations of different member countries of ICC from its two London bank accounts.
Consequently, the income tax department issued a notice to the office of PILCOM located in Calcutta asking it to show-cause why actions under the relevant section of IT Act be not taken against it for its failure to deduct taxes from payments made by it in accordance with section 194E....