PAC likely to examine the alleged tax related violations by the Tata Trusts

Days after the Income Tax Department cancelled registration of six Tata Trusts, sources in Parliament's Public Accounts Committee (PAC) on Wednesday said it is actively considering the issue and is likely to examine the alleged tax related violations by the trusts.

Last year, the PAC had recommended a probe into the alleged tax violations by Tata Trusts, while its sub-panel on Direct and Indirect Taxes, in its report, flagged several alleged violations.

The PAC's sub-committee had also demanded a probe into the "blatant tax violations" by the trusts.

On November 1, Tata Trusts said the Income Tax Department has cancelled registration of its six trusts, including Jamsetji Tata Trust, RD Tata Trust and Tata Education Trust, following their decision to surrender the same.

The other trusts are Tata Social Welfare Trust, Sarvajanik Seva Trust, and Navajbai Ratan Tata Trust.

The sources in the newly-constituted PAC of the 17th Lok Sabha, which is headed by Congress leader Adhir Ranjan Chowdhury, said the panel will look into the cancellation of the issue and examine the alleged tax related violations as reported by the previous committee.

They further said the panel has discussed the issue where companies are using trust route to avoid tax liability and will look into all the related matters.

Tata Trusts, in a statement, had said the cancellation was a culmination of the decision taken by these six trusts in 2015 to surrender their registration and to not claim the associated income tax exemptions.

"The decision to surrender the registration (an option available in law) was taken in the best interests of the trusts and to maximise the resources available to the Trusts for their charitable work which is the principal object and focus of the Trusts," it further said.