The ITAT’s Mumbai bench gave a ruling on July 24 in favour of the Trust in their appeal against commissioner income tax (CIT) order wherein a demand of more than Rs 220 crore was levied by the tax department.
ITAT also stayed the matter of that demand without any minimum pay, the government said in statement.
The case pertains to assessment years 2011-12 and 2012-13 on money spent by the Trust for creating an endowment fund at the US-based Cornell University 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.
The Trust had donated Rs 197.79 crore in 2011-12 and Rs 25.37 crore in 2012-13.
In the order, itat said: “…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 minimized by sensitising the authorities concerned.
“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 observed.
The government said that the controversy began after the Public Account Committee (PAC) 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 Income Tax Act.
Concluding the matter, ITAT said 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 added.
The detailed ruling of Appellate Tribunal may be accessed by clicking on link.
