The Income Tax Appellate Tribunal (ITAT), Mumbai bench on Friday ruled in favor of the Tata Education and Development Trust in their appeal against commissioner income tax (CIT) appeal order wherein demand of more than Rs.220 crore was levied by the tax department.
The tribunal allowed the exemption to the Tata Education and Development Trust for spending monies in charitable objectives outside India.
The assessee, Tata Education and Development Trust is a public charitable trust registered under the Bombay Public Trust Act 1950, as also as a charitable institution under Section 12A of the Income Tax Act, 1961.
The assessee Trust makes donations to the Harvard Business School and Cornell University.
In both of the assessment years, the assessee had returned NIL income but had also claimed amounts remitted to the educational universities outside India as the application of income under section 11(1)(c). This amount, for the assessment year 2011-12, was Rs 197,79,27,500, and, for the assessment year 2012-13, was Rs 25,37,00,000.
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 CIT(A) denied the deduction for the income applied outside India under section 11(1)(c) of the Income Tax Act, 1961, even though the appellant has an order from the Central Board of Direct Taxes [“CBDT”] as required by the proviso to Section 11(1)(c) of the Act”.
The Appellate Tribunal bench consisting of the President Justice P P Bhatt and Vice President, Pramod Kumar heard the matter last week and that gave the order today reportedly stating that the very adjudication on denial of exemption, in respect of monies spent on the application of charitable objectives of the appellant trust outside India, by the learned CIT(A) was incorrect in law, and is, accordingly, liable to be set aside for that short reason alone.
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