The Public Accounts Committee has pulled up the Central Board of Direct Taxes for delay in tax recovery from PILCOM, which staged the cricket World Cup in 1996.
In its report tabled in Parliament, the PAC said the Central Board of Direct Taxes had issued a directive to an assessing officer in February 1996, which was outside the scope of their powers which "gave a handle to PILCOM to delay assessment of tax".
PILCOM -- the Pakistan India Sri Lanka Joint Management Committee -- was formed by the representatives of cricket boards of the three countries to jointly stage the World Cup in February-March 1996.
The main issue in the case pertains to a directive issued by the CBDT, purportedly under Section 119 of the Income Tax Act, instructing the I-T authority in Kolkata to withdraw the notice served upon PILCOM for not deducting tax at source by sponsors ITC Ltd together with penalty and interest.
The PAC also pointed to discrepancies in the amount received by PILCOM, saying the organisers received Rs 84.35 crore as per audit findings, while the Finance Ministry put the figure at Rs 82.11 crore in its Action Taken Report.
"The committee desires that such issues relating to basic facts and figures be reconciled and settled by the Ministry with the audit at the earliest opportunity before the matter is reported to Parliament," the report said.
Stressing the need to fix responsibility on negligent officers who issued the No-Objection Certificate to the sponsor, the committee said "action be taken for recovery of tax, ought to have been deducted at source by ITC".
ITC had made payments into the foreign accounts of PILCOM without pursuing the sponsorship agreement, the report said.
The PAC also pulled up the Finance Ministry for not responding seriously to the issue of fixation of responsibility on negligent officials who issued the NOC to ITC for remitting payments to foreign accounts of PILCOM.
The committee asked the ministry to pursue vigorously the matters pending before the high court of Kolkata so that government revenue is well protected.
The panel has recommended that the income tax dues should be recovered, if necessary, from the BCCI, which is the Indian constituent of PILCOM.