Follow Us:
Tuesday, May 24, 2022

Tax exemption ‘misuse’: Impose penalty on Tata trusts, House panel asks govt

Some members in PAC sub-committee including chairman Dubey demanded action over the “misuse” of tax exemption by such bodies with specific reference to two trusts of Tata, informed the sources.

Written by Anand Mishra | New Delhi |
February 18, 2017 2:26:10 am

Amid the ongoing power tussle between Tata Sons interim chairman Ratan Tata and its ousted former chairman Cyrus Mistry, a Parliamentary panel examining “misuse” of tax exemption by charitable trusts and institutions on Wednesday saw demands for imposing heavy penalty on two charitable trusts of Tata and taking away tax exemptions from them for their “involvement in business decisions”. “Why was the Assessment Officer not suspended? Why not the registration of these trusts is cancelled,” were the questions that were put up to Revenue Secretary Hansmukh Adhia and CBDT Chairman Sushil Chandra, who briefed the PAC Sub Committee on Direct and Indirect Taxes, headed by BJP MP Nishikant Dubey. The panel met to discuss the issue of tax exemption by charitable trusts and institutions.

Watch what else is making news:

Some members in PAC sub-committee including chairman Dubey demanded action over the “misuse” of tax exemption by such bodies with specific reference to two trusts of Tata, informed the sources.

A CAG audit in some major trusts run by business houses and sports bodies had in 2013 referred to instances of the alleged misuse of income tax exemptions granted to them. The two Tata trusts — Jamsetji Tata Trust and Navajbai Ratan Tata Trust along with a number of state cricket associations had figured in the report.

Best of Express Premium

What makes KuCoin P2P Trading Platform a Good Choice To Buy Crypto?Premium
Airtel Demonstrates Immersive Video Entertainment On 5G; Recreates Kapi...Premium
Is It A Good Idea To Keep One Account For All Your Financial Transactions?Premium
Touching The Sky : SIMS, Pune Alumni On A Path To Make A DifferencePremium

“Maharashtra Trust Act says you should not have any share in any business, you should not do any business. That they have the share in other companies is the violation of Maharashtra Trust Act. On that basis the exemption from tax to them will come to an end as either they can do business or do charity. They will not get the exemption that they are getting in the name of charity,” a member in the panel said.

The panel members also asked the finance ministry officials to slap a penalty on the Trusts for violation of section 115 TD. Section 115 TD (1) of IT Act says that where a Trust has converted into any form which is not eligible for grant of registration under Section 12 AA, the accreted income of the Trust shall be charged to tax at the maximum marginal rate.

Some panel members asked the revenue secretary to take action against the Tata Trusts on these “violations”. “You should take punitive action against the Assessment Officer, slap penalty on these Tata Trusts and cancel their licence,” the convenor of the sub-committee Dubey is learnt to have said in the meeting. In reply, Adhia said he will respond in writing to the questions raised by the panel.

Latest Comment
View All Comments
Post Comment
Read Comments

For all the latest Business News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard

Featured Stories

Malaika Arora demonstrates three yoga asanas to reduce belly fat; watch
Nikhat Zareen: 'My mother was crying and said no one would marry me. I re...Premium
RRR: SS Rajamouli's epic tests the limits of believability, but nothing i...
IPL 2022, GT vs RR Highlights: David Miller guides Gujarat to IPL final, ...
Jo Jeeta Wohi Sikander at 30: Akshay Kumar was rejected for this Aamir Kh...Premium