Insta
‘No Genuine Activities Carried Out By Assessee’: IT Tribunal Dismisses Gandhis’ Appeal For Young India Charitable Tag
IANS
Nov 16, 2019, 10:50 AM | Updated 10:50 AM IST
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
In a setback to former Congress president Rahul Gandhi, the Income Tax Appellate Tribunal on Friday rejected an application to make Young India Ltd a charitable trust.
The tribunal ratified the Income Tax Order of cancelling the charitable activities exemption certificate for Young India.
The order is likely to open a tax evasion case against the Gandhis.
The tribunal in a 175-page order held that the company's activities cannot be termed charitable.
The order said, "The assessee (Gandhis) at the time of seeking registration itself has concealed the material facts and not disclosed the entire events of transactions which had undergone from the date of inception of assessee company till the grant of registration and one of the conditions on which the registration has been granted stood violated from the day one and therefore, under these circumstances, the ld. CIT(E) was fully justified in law and on facts in cancelling the registration from the date of granting of registration itself, i.e., from the assessment year 2011-12. "
"It has been found that no genuine activities have been carried out by the assessee either in furtherance of its objects or otherwise, which can be held to be for charitable purpose because one of the so called purpose of acquiring AJL was not carried out at all. Otherwise, also, we have already discussed and given our categorical findings that till the grant of registration and surrender made by the assessee, no worthwhile activities were carried out by AJL.
"In fact, what it turns out to be is that, the assessee has acquired AJL, a company that owns property worth hundreds of crores from which the AJL had been enjoying only rental income. Clearly, AJL, which had been earning rental income, cannot be held that its activities were aligned with the objects of the assessee company or through AJL; it was carrying out activities in pursuance of its objects qua that period. Hence, in that sense, the assessee's activities cannot be held to be genuine. Thus, the cancellation of registration u/s 12AA by the Ld. CIT (E) from A.Y. 2011-12 is upheld."
It further said: "There is another angle which ponders us is that, if no activities were carried out by YI towards charitable activity between the period 2011 to 2016, then why so much of clamour that assessee should be recognized as charitable institution qua that period only should have the benefit of registration u/s. 12AA for this period of five years, i.e., from the assessment year 2011-12 to A.Y. 2016-17 and post 21st March 2016, the assessee itself chose to surrender its registration and willingly give up its charity status under the Income Tax Act. If both YI and AJL are non-profitable company, then why such a dispute on cancellation from retrospective date."
Young India Ltd was set up in 2010, with Rahul Gandhi as a director. While Rahul Gandhi and his mother Sonia hold 76 per cent of the company's shares, the remaining 24% are held by Congress leaders Motilal Vora and Oscar Fernandes.
In 2012, BJP leader Subramanian Swamy filed a complaint before a trial court alleging that some Congress leaders were involved in cheating and breach of trust in the acquisition of Associated Journals Ltd by Young Indian Ltd (YIL). He alleged that YIL had 'taken over' the assets of the National Herald in a 'malicious' way.
He named Sonia Gandhi, Rahul Gandhi, Motilal Vora, Oscar Fernandes, journalist Suman Dubey and technocrat Sam Pitroda in the National Herald case.
The Congress has claimed that YIL was created "with an aim of charity" and not for any profit. It also claimed that there was "no illegality" in the transaction.
(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.