A tax tribunal on Monday quashed the income tax department’s orders seeking to revise its earlier assessments for the year ended 31 March 2014 granting tax exemption to three Tata trusts that collectively own two thirds of Tata Sons Ltd, the holding company of the group. The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) set aside the tax department’s 2019 orders initiating a review of the original tax assessment of Sir Dorabji Tata Trust, Sir Ratan Tata Trust and the JRD Tata Trust, three separate orders of the tribunal showed. Last year’s orders by the IT Commissioner handling tax exemptions invoked a provision in the law that allows a review of past assessment orders where inadequacies are noticed.
These orders made a case that the original assessing officer had not pursued certain aspects such as the trusts’ mode of investments, control over the business of Tata Sons and payment to trustees by Tata Sons-matters that could lead to denial of the income tax exemption meant for charitable trusts. The tribunal held that there was no violation in any of these. The tribunal’s order is significant as it sets a precedent for subsequent years too.
Courtesyg: Google (photo)
