Tata trusts get I-T summons for tax avoidance

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The IT department has summoned Tata trusts to explain the tax exemption misuse granted to the trusts for charitable purposes.

The action by the Income Tax department is based on a CAG report of 2013 that said the trusts are earning a big profit instead of using it for charitable purposes.

According to CAG, the surplus funds were used for creating fixed assets for earning more profit or are transferred to other trusts rather than for charitable purposes in order to avoid tax.

Moreover, the CAG report pinpointed that the I-T office permitted sporadic exclusions to Jamshetji Tata Trust and Navajbai Ratan Trust, which put Rs 3,139 crore in restricted modes. 

On a normal note, the Ministry of Finance had guaranteed to make a move and the IT division summon issued today are a part of that activity.