FINANCIALLY-CRIPPLED DDCA GETS Rs. 24 CRORE TAX NOTICE FROM DELHI TAX DEPT

By Qaiser Mohammad Ali, Managing Editor, www.JantaKaReporter.com

Twitter: @AlwaysCricket

The Delhi Excise, Entertainment and Luxury Tax Department has slapped a tax of Rs 24.45 crore and additional penalty on a financially crippled Delhi and District Cricket Association, and has asked it to pay it within 15 days.

Interestingly, the tax notice has come Financially-crippled DDCA gets Rs 24 crore tax notice a little over a month before the DDCA is scheduled to host a five-day Test match against South Africa at the Ferozeshah Kotla, starting on 3 December.

Ferozeshah Kotla Stadium that houses the Delhi and District Cricket Association (DDCA), which is perennially surrounded by controversies.It is currently struggling with finances and it remains to be seen how it hosts the fourth India-South Africa Test match, starting on December 3. Photo: Qaiser Mohammad Ali

This outstanding tax amount is towards the non-payment of entertainment tax, interest and penalty from 2003 to 2005. A 10-page notice, issued on 21 October, from the tax department says that if the DDCA failed to pay the arrears, “necessary action” would be initiated under the provisions of the Delhi Entertainments and Betting Tax Act 1966 for recovery of Rs 24,45,96,000 (Click to enlarge graphic below).

A copy of the letter, written PK Goel, Entertainment Tax officer, Delhi Government, is with jantakareporter.com.

According to the assessment by the tax department, the DDCA had earned a total of Rs 34.96 crore from 45 companies to which the corporate box seats at the Kotla stadium were sold between 2003 and 2005.

On this amount, tax at a rate of 15 per cent was levied, totalling Rs 5.25 crore. But since the DDCA didn’t pay the tax, a penalty has been imposed.

DDCA treasurer Ravinder Manchanda candidly admitted that paucity of finances was a severe problem. “We don’t have enough money. How will we pay this amount [Rs 24 crore]?” Manchanda told jantakareporter.com

Manchanda, however, said that the DDCA would contest the tax department demand and seek a stay so that it could host the Test match.

“We have sent our reply to the tax department. Their tax calculation is not proper. But we have made the payment for the current year,” he said. “This tax demand is debatable/contestable. Either we will appeal the tax department or move the Delhi High Court. We will be seeking a stay from the court. We will take this step soon as we have to host a Test match. If the match is shifted from Delhi it would be embarrassing for the DDCA.”

Jantakareporter.com learns that the BCCI had recently floated a proposal to constitute a committee, like the one that is administering the game in Rajasthan, to take over the DDCA reins as infighting between Delhi cricket administrators intensified.

Sources say although the idea hasn’t been implemented so far, it hasn’t been dumped either, especially as the BCCI doesn’t want any last minute embarrassment while hosting the Test match against South Africa.

DDCA’s problems are manifold. Apart from the long-standing arrears, it is financial crippled as the BCCI has not paid its [DDCA’s] share due to the association as it has not submitted its balance sheets for years 2013-14 and 2014-15 due to internal squabbling. The balance sheets for both financial years are not even ready.

Now, after Shashank Manohar taking over the BCCI’s reins and with the Supreme Court-appointed Lodha Committee expected to give a report on Board’s administrative reforms in December, things could become all the more tough for the enfant terrible DDCA.

Former India cricket captain Bishan Singh Bedi, president of the NCT Cricket Association, said that CBI has registered a case against the DDCA and some of its office-bearers for various transgressions.

“We demand that the BCCI should immediately appoint a committee to oversee the affairs of the DDCA so that cricket and cricketers do not suffer,” said Bedi in a statement.

Bedi said the CBI registered the case and their office bearers based on a complaint lodged by former Test cricketer Kirti Azad.

“The charges include loot in the construction of Kotla stadium; unauthorised construction; defalcation of DDCA funds; presenting fake bills; making fake, inflated and unnecessary payments to 15 chartered accountants and several lawyers to the tune of Rs 4 crores/year; and sham accounts prepared by an indicted chartered accountant etc.,” Bedi said in a statement.

Speaking to jantakareporter .com, Bedi said that the DDCA would have to pay the tax dues even if it didn’t have money. “We know the DDCA doesn’t have money. But the tax department knows how to extract its dues,” he said.

When pointed out that the DDCA has to host a Test match soon, Bedi said, “We also know that. But the BCCI will have to activate [itself] fast if the match has to be shifted from Delhi.”

Bedi said Kirti Azad needs to be backed as it was on his complaint that the CBI had registered a case against the DDCA.

“Look at the 200 letters and scores of messages that we sent to Arun Jaitley [DDCA president from 1999 to 2013],” Bedi said in his statement. “He never acted on any of them. In fact, he did everything to subvert the rule of law to save the office bearers who are now getting exposed by the investigation agencies.”