ITAT allows exemption of Rs 220 cr to Tata Education & Development Trust

Mumbai, July 25, 2020: In a major relief for Tata Education and Development Trust, the Income Tax Appellate Tribunal (ITAT) bench consisting of Justices PP Bhatt, President, ITAT on July 24 ruled in favour of the trust in their appeal against commissioner income tax (CIT) appeal 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 case pertains to assessment years 2011-12 and 2012-13 on money spent by the Trust for creat-ing an endowment fund at Cornell University, US, to provide scholar-ships to Indian students, and granti-ng financial assistance to the Har-vard Business School for construct-ing an executive building to be named Tata Hall.

It donated ₹197.79 crore in 2011-12 and ₹25.37 crore in 2012-13.
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 I-T Act.

Concluding the matter, the Income-tax Appellate Tribunal (ITAT) on Friday stated that all other grounds of appeals will be “ren-dered, 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 exemp-tion,” 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 phil-anthropic 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 situa-tions like this, at the field level, which must be minimized by sensi-tising 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.”

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