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ITAT allows Rs.220 cr. exemption to Tata Education and Development Trust

by BQ News Bureau
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The Income Tax Appellate Tribunal (ITAT) on Friday ruled in favour of the Tata Education and Development Trust, in their appeal against Commissioner of Income tax ‘s (CIT) appeal order wherein a demand of more than Rs.220 crore was levied by the department. The ITAT also stayed the matter of that demand without any minimum pay.

The case pertains to assessment years 2011-12 and 2012-13 on money spent by the Trust for creating an endowment fund at Cornell University in the US to provide scholarships to Indian students and granting financial assistance to the Harvard Business School for constructing an executive building to be named Tata Hall. It donated Rs.197.79 crore in 2011-12 and Rs.25.37 crore in 2012-13.

The controversy began after the Public Accounts Committee of the Lok Sabha, in 2018, sought an enquiry in the matter as it believed that exemption granted by the direct tax body was in violation of the IT Act.

Concluding the matter, the ITAT on Friday stated that all other grounds of appeals will be “rendered, academic and infructuous”. “We have decided this issue in favour of the assessee and thus allowed this ground of appeal. We, therefore, uphold the plea of the assessee, and delete the resultant disallowance of claim of exemption,” it said.

The Appellate Tribunal also stated in its order that “this wholly avoidable litigation which does not only clog the serious litigation before the judicial forums but also diverts scarce resources of the philanthropic bodies, like the assessee before us, to the areas which do no good to the society at large.”

The Tribunal hoped that the admirable work being done by the Government of India in pursuing such forward-looking policies at the macro level is not allowed to be overshadowed by the isolated situations like this, at the field level, which must be minimised by sensitising the authorities concerned. It observed, “An effort should be made to create a taxpayer-friendly atmosphere by adopting just and fair approach at every level of the tax administration,” it pointed out.

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