Events & Personalities
Taxing for Tata Trusts
The Comptroller and Auditor General (CAG) of India has discovered, after conducting a detailed audit, that some major trusts run by business houses and sports bodies have allegedly misused the income tax exemptions granted to them. Among their number are two Tata trusts, revealed The Times of India (TOI) on November 21, 2013. The report is to be tabled in Parliament in the winter session.
According to the new CAG, S. K. Sharma, some of the trusts have invested, or transferred to other trusts, large surpluses instead of spending the money for charitable purposes. The Jamsetji Tata Trust and Navajbai Ratan Tata Trust together have allegedly invested Rs 3,000 crore in "prohibitive modes” — investments that cannot be accepted as charitable in nature. On reading the report the government has asked for recovery of over Rs 1,000 crore from the two trusts.
Managing trustee of the Sir Dorabji Tata Trust, A. N. Singh in a letter published in TOI wrote: "we are not aware of the recent audit of the CAG… However, we confirm that a tax demand has been raised by the Income Tax Department in relation to the subject matter… The department has stayed the recovery of demand against an interim tax payment made by the Trust, pending appellate proceedings… The Trust is governed by the Bombay Public Trusts Act and had accordingly sought and obtained the prior approval of the Charity Commissioner as required by the Act before making the… investment which was made to avail of an optimized and stable yield. In the opinion of the Trust, there is no loss of revenue to the exchequer resulting from the said investment.”
According to the new CAG, S. K. Sharma, some of the trusts have invested, or transferred to other trusts, large surpluses instead of spending the money for charitable purposes. The Jamsetji Tata Trust and Navajbai Ratan Tata Trust together have allegedly invested Rs 3,000 crore in "prohibitive modes” — investments that cannot be accepted as charitable in nature. On reading the report the government has asked for recovery of over Rs 1,000 crore from the two trusts.
Managing trustee of the Sir Dorabji Tata Trust, A. N. Singh in a letter published in TOI wrote: "we are not aware of the recent audit of the CAG… However, we confirm that a tax demand has been raised by the Income Tax Department in relation to the subject matter… The department has stayed the recovery of demand against an interim tax payment made by the Trust, pending appellate proceedings… The Trust is governed by the Bombay Public Trusts Act and had accordingly sought and obtained the prior approval of the Charity Commissioner as required by the Act before making the… investment which was made to avail of an optimized and stable yield. In the opinion of the Trust, there is no loss of revenue to the exchequer resulting from the said investment.”
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