The Times of India said on Tuesday the Directorate of Revenue Intelligence issued a show-cause notice of $3.4 million to Modi for importing in 2008 an aircraft used by him for trips related to the IPL.
"Investigations reveal that Lalit Modi orchestrated a series of events to acquire an aircraft for his personal use," the newspaper quoted the notice as saying. "Peel Aviation (the aircraft leaser) is a corporate veil to mask the actual owner of the aircraft, Modi."
The notice said Modi created dummy companies in order to gain customs duty exemptions available for aircraft used for charter services.
Modi, who was instrumental in putting together the cash-rich IPL in 2008, was accused by the Board of Control for Cricket in India of misappropriating more than $100 million as IPL commissioner.
Modi, based in London, is also alleged to hold hidden stakes in three IPL teams: Rajasthan Royals, Mumbai Indians and Kings XI Punjab.