Why has the Income Tax department issued a Rs 4.62 crore notice to EFI?

The Income Tax Department has issued a demand notice of Rs 4.62 crore to the Equestrian Federation of India (EFI) for the assessment year 2024-25 under Section 156 of the Income-Tax Act, 1961. The notice, dated February 9, 2026, states that Rs 4,62,18,102 is payable and must be deposited within 30 days at an authorised bank.

The notice follows delays by the EFI Executive Committee in submitting required compliance documents, including a Non-Utilisation/Accumulation Certificate. According to EFI Secretary General Col Jaiveer Singh, the certificate, which had to be signed by all EC members, was not submitted on time. “Non-submission of this document has resulted in issuance of the letter. Recourse available to the Federation as per relevant provisions of IT rules will be undertaken,” he said.

An accumulation certificate allows an organisation to set aside income for future use without it being taxed in the current year. In addition, EFI did not obtain approval from the Central Board of Direct Taxes (CBDT) under Section 11 of the Act for foreign transfers. As a National Sports Federation affiliated with international equestrian bodies, EFI makes overseas payments for affiliation fees, participation expenses, and other international commitments.

The notice warns that failure to pay within the stipulated period will attract simple interest of 1% per month under Section 220(2). Non-payment could also trigger penalty proceedings under Section 221, which may equal the tax amount due, after providing an opportunity for hearing. Recovery proceedings may be initiated under the relevant provisions if dues remain unpaid.

EFI has the option to appeal the assessment before the National Faceless Appeal Centre within 30 days of receiving the notice, following prescribed procedures.

EFI is affiliated with the Ministry of Youth Affairs and Sports, the Indian Olympic Association, and international equestrian organisations.
(With PTI inputs)