Citizens' Issues
I-T Dept yet to comply with CBDT order on publishing names of tax-exempt charities
Following repeated directions from the Central Information Commission (CIC), the Central Board of Direct Taxes (CBDT) had asked the Income Tax (I-T) Department to place in the public domain names of all organisation and entities that enjoyed tax exemption. However, the I-T department has not yet complied with the directions.
 
There are hundreds of thousands of charitable trusts, institutions and entities in India, which have been granted exemption from Income Tax. However, not all are in the public domain. The CIC had observed, “Charity and secrecy are contradiction in terms. Any charitable institution should have no secrets and should be open to public for all purposes, including its finances...” Thus, it has repeatedly since 2010, ordered CBDT to put the list in the public domain, the last time being in April 2016.
 
The CBDT issued a circular to all of its Public Information Officers (PIOs), to make public, the names of all such charitable organisations and entities, on their websites. The latest order by the CBDT in May 2016, is a sequel to a complaint filed by Right to Information (RTI) activist and scholar Venkatesh Nayak, directing initiation of action. 
 
The CBDT orders states, “In view of the fact that the orders of the CIC are binding under the RTI Act, 2005 unless stayed or reversed by higher courts, I am directed to convey that suitable instructions may be issued to all the concerned authorities / officers / CPIOs to ensure that the orders passed by CIC in appeals and complaints under the RTI Act, 2005 are invariably complied with…, unless they are stayed or reversed by higher courts. Any deviation will be viewed adversely.”
 
Elaborating the ramification of this order, Nayak says, “Apart from the fact that the CBDT has acted promptly to issue an omnibus directive seeking compliance with all CIC orders for disclosing information that have attained finality, the specific category of information that Rakesh Agarwal (the original applicant) wanted disclosed have a direct connect with Section 4(1)(b) of The Right to Information Act, 2005 (RTI Act). 
 
“The 2010 decision of CIC's Full Bench requires the disclosure of the identity of all charitable trusts/institutions and entities that have received tax exemption under Section 10, 11 and 12 of the Income Tax Act, 1961.
 
“Section 10, relates to:
Income that is not taxable under the law such as agricultural income
Interest earned by non-resident Indians who have invested in such notified government securities and bonds
Income earned by foreign diplomats by way of salary etc. during their posting in India
Payments received in commutation of pension by former employees of the Central government and the defence forces
Earned leave encashment received by government employees upon retirement
Compensation received by workmen under the Industrial Disputes Act, 1947,
Golden handshake received by voluntarily retiring employees of governments
Public sector companies, cooperative societies and such other bodies listed in that section
Sums received under Keyman Insurance policy and a host of other grounds for claiming exemptions”
 
Section 11 of the Income Tax Act relates to tax exemption for income from property held for charitable or religious purposes. 
 
Section 12 of the Income Tax Act relates to income of trusts or institutions created for wholly charitable or religious purposes from contributions received which is also exempt from the payment of any tax, subject to conditions of course.’’
 
Way back in March 2010, a full Bench of the CIC had directed the I-T Department that “Needless to say, avowed purpose for which these institutions or entities come into existence is charity. Charity and secrecy are contradiction in terms. Any charitable institution should have no secrets and should be open to public for all purposes, including its finances. In other words, in our opinion, it will be in the larger public interest if the identity of the charitable trusts/institutions/entities which are granted exemption from income tax under the statutory provisions are placed in the public domain.”
 
“Hence, in exercise of powers under Section 25(5) of the RTI Act, we hereby recommend that the identity of the charitable trusts/institutions/entities which have been granted exemption from income tax under Section 10 & under Section 11/12 of the Income Tax Act is placed in public domain by way of suo motu disclosure by the CBDT in terms of section 4(1)(b) r/w section 4(2) of the RTI Act,” the CIC had said.
 
The CBDT officers sought reasonable time in this regard as they said that the task was of high magnitude and so sought eight months.
 
Thereafter, there has been repeated non-compliance of the I-T Department with the orders of the CIC.
 
In April 2013, a single Bench issued the following direction in that case: 
“…the Commission directs Ms Deepshikha Sharma, PIO/ Deputy Secretary, ITAI, CBDT, New Delhi, to ascertain the factual position about the implementation of the above decision and send a report to the Commission within four weeks of receipt of this order.” 
 
Later in December 2015, another single Bench of CIC took notice of the non-compliance of the I-T Department regarding the full Bench direction of March 2010 and directed the appellant as follows: “As stated by the CPIO, he should write to the CIT (Exemption) Chandigarh for compliance of CIC order dated 9 March 2010 [file no. CIC/LS/A/2009/00190- R. Agarwal vs Income Tax Department] at the earliest.” 
 
In January this year, yet another order from the single Bench of CIC says, “…the CPIOs are directed to provide list of charitable trusts/institutions/entities which have been granted exemption from income tax under Section 10 & Section11/12 of the Income Tax Act for the years 2011-12, 2012-13 and 2013-14, to the appellant within 30 days from the date of receipt of this order”.
 
In April 2016, once again the CIC directed the CBDT to comply with CIC decision. It will be interesting to see if the I-T Department pays any heed to CBDT directions and publishes names of entities enjoying tax exemption in public domain.
 
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet – The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)

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COMMENTS

MG Warrier

5 months ago

The veil of secrecy surrounding charitable organisations including religious places and spiritual leaders builds up suspicion in the minds of public. This results in gossips and speculations. Unscrupulous elements take advantage. To start with, those institutions/organisations which are in the limelight should on their own come out and make public their sources and uses of funds and subject their existing assets to transparent accounting and audit.

Brexit: Expect waves of contagion on Asia
Britain's decision to opt out of the European Union-EU (Brexit) has rattled markets across the world. With the Brexit result only a few hours old and the situation extremely fluid it is extremely difficult to forecast the economic and financial impact on Asia, however Nomura feels financial, confidence and psychology channels are likely to be more important than trade linkages during these times.
 
"We should not underestimate the global contagion of the Brexit outcome," Nomura said, adding, "At first glance it would seem that the financial and economic impact of this result should be largely confined to the UK, given that its economic size is quite small at less than 4% of world gross domestic product (GDP) and world imports in 2015. However, we believe that this is too simplistic of a view and that the impact of the Brexit will be far reaching and long lasting."
 
According to Nomura report, there are two reasons for this. One, it expects non-trivial spill over to the euro area economy and financial markets and second, Brexit could further inflame anti-EU sentiments. 
 
It says, "While the value of merchandise exports from the rest of the EU to the UK is only 3% of the rest of the EU’s GDP, the UK’s position as a global financial hub – UK financial sector assets account for more than eight times of its GDP – leaves the rest of the EU much more exposed to the UK in terms of financial and investment linkages, in part reflecting the UK’s relatively liberalised domestic market and its strong legal framework and institutions. For example, one-third of UK's financial and insurance services exports are to the EU. Also more than half of the UK banking sector's cross-border lending is directed towards the EU, while almost half of the foreign direct investment (FDI) received by the UK comes from the EU."
 
 
In addition, it says, Brexit could further inflame anti-EU sentiment in other EU member states, heightening fears of more countries opting to leave the union. "It is largely due to these non-trade-related channels that we expect a reduction in euro area GDP growth by 0.5 percentage points (pp) and a weaker EUR/USD.3 While UK share of global GDP is less than 4%, the rest of EU’s share is 18%, so once second-round effects on Europe are taken into account, the global impact is no longer trivial," it added.
 
Talking about the Brexit impact on India, Nomura says, as Indian economy is largely driven by domestic demand, the economic impact (of a Brexit) should be small relative to other open economies in Asia. “Still, India is not immune, as it has strong trade linkages with the EU and is susceptible to a loss of business confidence and a potential tightening of financial conditions. In our view, any adverse impact could be partly cushioned by upcoming domestic impulses to growth such as good monsoons, pay commission hikes and a likely easing of policies (both monetary and fiscal) but, nonetheless, we expect the growth recovery to slow.”
 
Nomura thinks a globally coordinated central bank response to a global financial market meltdown is quite likely, such as liquidity support through forex (FX) swap arrangements and possible FX intervention. But with policy credibility at such a low it is unclear how successful these emergency measures would ultimately be when there is extreme market risk aversion, it added.
 
On the Brexit result, Nomura says it has tentatively lowered its aggregate 2016 GDP growth forecast for Asia ex-Japan to 5.6% from 5.9%. The largest percentage point (pp) downgrades are for Hong Kong (1.0pp) and Singapore (0.7pp), followed by Taiwan (0.6pp), Thailand (0.5pp) and Malaysia (0.4pp). At the other end of the spectrum, Nomura says it has lowered its 2016 GDP growth forecast by only 0.2pp for Australia, China, Indonesia and the Philippines.
 
 
Nomura also expects significantly more monetary policy easing in Asia. It says, dovish central banks, a weak growth outlook and a dovish Fed are bullish for most Asia rates. 
 
"Between now and year-end, we expect the Reserve Bank of India (RBI) to cut by 25 basis points (bp) from no cut previously, Korea by 50bp (25bp previously), Indonesia by 50bp (25bp), Taiwan by 50bp (37.5bp), Thailand by 50bp (50bp), Malaysia by 25bp (no cut previously). For China we have increased the number of RRR cuts by year-end from two to three, in addition to one interest rate cut. The only Asian central bank that we expect to keep rate on hold is in the Philippines. We now expect the Monetary Authority of Singapore to re-centre the mid-point of the S$NEER policy band lower at, or before, its October policy meeting," it added.
 
Talking about the economic implication on UK, the report says, the impact (of Brexit) is likely to be prolonged rather than short term. It said, "The uncertainty over the future of the UK means investors can be expected to demand a higher risk premium for holding UK assets, which coupled with the need to finance a 7%-of-GDP current account deficit, should result in a large – and persistent – depreciation of pound." 
 
"Beyond the trade channel, once financial, confidence and psychology channels are taken into account, we caution not to underestimate the depth and reach of financial market contagion to Asia," it concluded.  
 

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COMMENTS

Ramesh Poapt

5 months ago

well said!Now Rexit will be more painful.............

Brexit rattles markets, pound stumbles 11%, Cameron resigns as Britain exits EU
Britain's decision to opt out of the European Union-EU (Brexit) rattled Indian financial markets on Friday, shaving some over 1,000 points, or 4%, off Sensex, a key equities index, while pulling the rupee below the $68 mark. The British pound dropped 11% to its lowest level in over three decades as the market awoke to the shock of Brexit. The euro, seen to be vulnerable if Britain voted to leave the EU, was also down 3.2% against the US dollar, which also rose strongly against emerging market currencies. A stunning slide in sterling at 3.40am (London) saw the currency plummet below $1.40, and 20 minutes later, it had breached $1.35 to levels last seen in 1985. An hour later, the pound touched a new low at $1.3224. Following the poll results, British Prime Minister David Cameron announced his desire to resign from the post.
 
The BSE Sensex, which had closed on Thursday at 27,002, opened the next morning at 26,367. At noon, it had drifted sharply and was ruling at 26,002 points, down by 999 points, or 3.7%. At one point, it had lost nearly 1,050 points.
 
Each of the 30 stocks that go into the Sensex basket were in the red led by Tata Motors, which was down as much as 11.53% and Tata Steel, lower by 9.15%, due to their large presence in Europe in general and Britain in particular.
 
In the pre-open trades, the 30-scrip index was down as much as 634.74-points or 2.35%. An indication came from the SGX Nifty, which trades on the Singapore exchange and ahead of the opening bell in India, was down over 2.75%.
 
At the National Stock Exchange (NSE), where the 50-scrip Nifty had closed at 8,270 points, the opening bell was at 8,029. Thereafter, the index was ruling below the 8,000-points mark at 7,955 points, down 315 points, or 3.81%.
 
The rupee dived over 1.4% to 68.21 per US dollar, while the British pound -- that had rallied to nearly $1.5 in early trades -- fell sharply to its lowest level since 1985 at $1.35.
 
Both Finance Minister Arun Jaitley and Reserve Bank of India (RBI) Governor Dr Raghuram Rajan sought to calm the markets and assured there was no cause for panic as India's economic fundamentals remained strong and along with other macro indicators.
 
RBI's Rajan said investors need not panic over the rupee. "We are comfortable on foreign exchange reserves. We can use it when necessary," he added. "We also expect to see lesser swings in bond markets compared to peers."
 
Commenting on the Brexit, Arundhati Bhattacharya, Chairman of State Bank of India (SBI), the country's largest lender, said, "Uncertainty of any sort results in volatility and Brexit will be no exception. As risk aversion sets in, there would be a decline in financial markets and India would see this impact along with other nations. However as trade strategies are reworked there could be potential advantages in the form of better market access for India to EU and UK."
 
On Thursday, sensing that the chances of Britain remaining in the EU were higher, the investor mood had lifted the Sensex by 236.57 points or 0.88% while the wider 51-scrip Nifty edged up by 66.75 points or 0.81%.
 
This, despite foreign funds being net sellers of Indian equities on Thursday valued of Rs31.86 crore, as per data with the National Securities Depository Ltd (NSDL).
 
World reacts as Britain votes to leave EU
 
British PM Cameron, said he fought the referendum on the EU with "head and heart" and was proud of what he had done. "I formed a coalition, delivered a referendum in Scotland and gave the public a referendum on Europe. I have fought the referendum with head and heart. I always thought that one has to confront big decisions and not duck them," Cameron said as he announced his decision to step down as the Prime Minister.
 
 
International reactions poured in on Friday for the dramatic decision by British voters to leave the EU in a historic referendum.
 
"We respect the result. Now is the time for us to behave seriously and responsibly. (Prime Minister) David Cameron has his responsibilities for his country, we have our responsibilities for the future of the EU. You can see what is happening to sterling on the markets. I don't want the same thing to happen to the euro," European Parliament President Martin Schulz said early Friday morning after the results were announced.
 
Former First Minister and Scottish National party leader Alex Salmond said he believes Scotland must now stage a second independence referendum before the UKA’s exit from the EU is effected within the next two years.
 
Dutch Freedom Party leader Geert Wilders hailed the decision and said that it was the time for a referendum in the Netherlands.
 
"Hurrah for the British! Now it is our turn. Time for a Dutch referendum!" he tweeted
 
Marine Le Pen, the leader of France’s far-right Front National party, has welcomed the result. She said she also wants a similar referendum in France.
 
"From #Brexit to #Frexit: It's now time to import democracy to our country. The French must have the right to choose!" she leader tweeted.
 
Manfred Weber, leader of the largest group in the European Parliament, the EPP, said: "Exit negotiations should be concluded within 2 years at max. There cannot be any special treatment. Leave means leave."
 
German Foreign Minister Frank-Walter Steinmeier deemed it as a sad day for Britain and for the EU.
 
The head of Germany's Foreign Trade Association, Anton Boerner, said: "That is a catastrophic result for Britain and also for Europe and Germany, especially the German economy. It is disturbing that the oldest democracy in the world turns its back on us."
 
Gerard Araud, the French ambassador in Washington, tweeted: "Now to the other member states to save the EU from unravelling which excludes business as usual, especially in Brussels. Reform or die!"
 
The 'Leave' campaign won by 52% to 48% with England and Wales voting strongly for Brexit, while London, Scotland and Northern Ireland backed staying in the EU.
 
The referendum was held all across the country on Thursday. The turnout was 71.8% - with more than 30 million people voting.
 
Twitterati reaction on #Brexit
 
 
 
 
 
 

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COMMENTS

Ramesh Poapt

5 months ago

amazing n shocking too, to know that senior citizens lead to Brexit! Analysis in the matter pl ML.

B. Yerram Raju

5 months ago

Very informative and analytical article at the right moment.

Aditya G

5 months ago

This is an interesting event, for many reasons.

First, UK has no idea what's going to happen in future. This gives more ammo to SNP to break free from UK and join EU. Without Scottish oil money, Great Britain and Wales will be bust; it has only London to keep afloat. Also, UK will now have to spend a lot more to protect its borders, previously outsourced to Turkey (which ironically not part of EU), Greece and Germany. This is going to be a very very very very very difficult tasks. UK is no America.

Second, EU required reforms way before Brexit happened. This is just a wake up call, or an inflection point if you will. Some smart guys in ECB and EU are now talking of reforms. Yeah. Right.

It's going to be a long sideways market (or a good chance of prolonged stagnation/recession), at least for European markets. Some FIIs may even come here. I don't know. Gold? Yen? Even real estate? They're all looking good now.

Other countries may follow UK, but they are smaller and have less economic clout. They can't afford to leave EU. There will be lots of politics and infighting between right-wing parties and the mainstream. It will be theatre, literally. I can't wait for the circus to start.

Times are a'changing!

SuchindranathAiyerS

5 months ago

This is just the last straw that broke the Cameron's back:

Brexit will not disturb trajectories of world events beyond a hiccup and a ripple or two.



Somebody who runs the stochastic processes in Langley must have finally briefed Obama with the foundation of the US-UK special relationship. It was Bush crony Blair who sank the commonwealth by defining the United Kingdom's aspiration. The UK hoped and prayed, with cap in hand, to be a bridge between the US and Europe. This paid rich dividends by taking NATO into committing war crimes in Iraq at the behest of the White House's Sunni Pay Masters. This also established that the UK was a willing slave. The UK was the convenient handle with which to swing the European pan, A tail with which to wag the European dog and which could be treated like a Yazidi. Remember how the US abandoned the UK over the Falklands? If the UK exits Europe, it would reduce the time required for the rest of Europe to integrate with Russia which, bereft of Totalitarian Communism, is Europe's natural partner rather than an entirely selfish and uncultured United States that imposes laws and Islam on others that it will never impose on itself.



The Pound will not crash. U.K. will be temporarily "ostracized" by both the US and EU. Britain will work harder on its Financial Services and Financial Safe Haven status which is the source of most of its "invisible" earnings which is the major portion of its exports. In this process, UK will move towards an equidistant locus from both East and West. But it will not be able to revive the moribund Commonwealth in any way other than as a safe haven for its corrupt tyrants. It will become a third rate military power depending on its insularity for security from all but Islam which will dominate its cultural transformation via the Islamic portions of the Commonwealth that will continue to use Britain as Britain seeks, futilely, to use them. This will render Britain's far flung territories such as The Falklands (Malvinas) more vulnerable to subsidence into their original main land parents.



In any case, the only thing that unites Britain and the EU is that they are both ruledby political correctness, Islamophilia, and the angst of small town shopkeepers, small farmers, and lower middle class housewives without any conception of Geo Politics, Military necessity, History, or Economics. These churn out the plethora of strangulating and suffocating laws that are driven like any vice by compulsion rather than necessity. Which is what separates them as notions of political correctness obtrude into notions of sovereignty as well.

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