An expensive audit

The Charity Commissioner (CC) M. K. Choure has served a notice dated September 5, 2009 under section 41D of the Bombay Public Trusts Act for suspension/removal of the trustees of the Bombay Parsi Punchayet (BPP) for willfully disobeying a legal order of carrying out an audit of the trust’s accounts for the last 10 years.

The Show Cause notice as carried in the Jam-e-Jamshed of September 13, 2009 stated, "You as the trustee have willfully obstructed the commencement of Special Audit by writing various letters dated 20th July 2009, 23rd July 2009, 3rd August 2009, 10th August 2009, 11th August 2009, 12th August 2009, 14th August 2009 and only on one ground that the Fees for the Special Audit fixed by this Authority is extraneous and further even after getting chance to file appropriate Application/proceedings for the Fees for Special Audit have intentionally and malafidely failed and neglected to do the same to cause more delay.” As per the Hindustan Times report of September 11, "The Commissioner has asked the trustees to give in their response on September 22.”

Acting on a complaint made over a year ago by Alert Zoroastrians Association (AZA) activist Percy Patel, the Charity Commissioner had conducted a preliminary audit around end 2008/early 2009 and reportedly found prima face evidence to conduct a full audit.

According to the WAPIZ (World Alliance of Parsi Irani Zarthoshtis) Page in The Free Press Journal of September 11, "The trustees, whilst agreeing to have its accounts audited, are not willing to pay this huge fee (around Rs 1,20,00,000) depriving the poor and needy of much needed charity funds.”

AZA’s Kersi Randeria points out that the BPP is spending Rs 2,40,00,000 to construct a swimming pool and 35 parking slots for the proposed ownership building at Godrej Baug. Hence the audit fees should be viewed in that light.

The WAPIZ Page states that the BPP’s accounts have been scrupulously audited every year for the last three years by the reputed firm Kalyaniwalla and Mistry and prior to that by Kapadia Damania and Company. These accounts have also been filed in the CC’s office and with the Income Tax department every year. Accounts were signed by chairman emeritus Jamshed Guzder until 2003 and thereafter by former chairman of the BPP Minoo Shroff who was a trustee for 21 years.

When Patel was contacted over the telephone by Parsiana, he justified his action: "The BPP’s funds should be used for the poor and not frittered away for the rich and the pseudo rich.” For instance, he questioned the need to build an ownership tower at Godrej Baug to house the affluent. "Our forefathers left properties for use by the poor” but the BPP, whose job it is to manage these properties seems to be "robbing the rich to serve the poor. They may be taking from the rich, but who knows whether or in which manner they are serving the poor?”

Regarding the huge cost to the BPP for the proposed audit, Patel explained that under the law this matter is left to the CC’s discretion. The CC is entitled to levy a fee of not over one percent of the income mentioned in the income tax returns. However, since the BPP audit will cover a 10-year period, the CC has indicated a slightly lower cost, somewhat less than one percent of the income shown.