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

New Delhi, July 26, 2020

In a major relief for Tata Education and Development Trust, the Income Tax Appellate Tribunal (ITAT) has ruled in its favour in its appeal against Commissioner Income Tax (CIT) appeal order with a demand levying of more than Rs 220 crore.

The ITAT bench comprising ITAT President Justice P P Bhatt passed the order on July 24, the Ministry of Law & Justice said in a press release.

The case pertains to assessment years 2011-12 and 2012-13 on the money spent by the Trust for creating an endowment fund at Cornell University, US, 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. It donated Rs 197.79 crore in 2011-12 and Rs 25.37 crore in 2012-13.

The controversy began after the Public Accounts 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 violated the I-T Act.

Concluding the matter, the Income-tax Appellate Tribunal (ITAT) on Friday stated 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 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 philanthropic bodies, like the assessee before us, to the areas which do no good to the society at large.”

The Tribunal expressed the hope that the admirable work being done by the Government, in pursuing such forward-looking policies at the macro level, was not allowed to be overshadowed by the isolated situations like this, at the field level, which must be minimized by sensitising 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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