ITAT rules in favour of Tata Education trust\, disallows IT dept’s demand of over Rs 100 cr
MUMBAI: In a major relief for Tata Education and Development Trust, the Income Tax Appellate Tribunal (ITAT) on Friday ruled in favour of the trust in their appeal against commissioner income tax (CIT) appeal order wherein a demand of more than Rs.100 crore was levied by the tax department.
Incidentally ITAT also stayed the matter of that demand without any minimum pay.
The Appellate Tribunal bench consisting of the President and Vice President heard the matter last week and that gave the order today reportedly stating , “ … that the tax payer ( Tata Education & Development trust) is fully justified in filing the appeal and the decision given by the ITAT,” a source privy to the order told ET.
“The ITAT decision is absolutely justified and it has correctly decided that the said Tata Trust is entitled to claim the deduction made as donation to Harvard and Cornell universities for which Central Board of Direct Taxes (CBDT) had given approvals. CIT appeal had no business to reserve the order of the department,” senior chartered accountant, TP Ostwal representing the tax payer told ET.
Tata Trusts was not immediately available for comment.
The matter pertains to Tata Education and Development Trust donations to the Harvard Business School and the Cornell University.
Earlier, the Public Accounts Committee (PAC), in its report submitted to the Lok Sabha had noted that the Tata Trust was allowed an exemption by the Central Board of Direct Taxes for its cumulative donation of $100 million during 2008-09 and 2015-16 to Harvard Business School and Cornell University. This exemption, it said, violated the Income Tax Act.
“Section 11 (1) (c) of the Income Tax Act 1961 provides that in the case of trusts created after April 1, 1952, the application of income outside India should be with reference to international welfare in which India is interested… The order of the CBDT is not in accordance with the provisions of the Act. Construction of Tata Hall at Harvard did not amount to international welfare in which India was interested,” the report said.