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
• Golden handshake received by voluntarily retiring employees of governments
• Public sector companies, cooperative societies and such other bodies listed in that section
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”