In a setback for former Tata Sons Chairman Cyrus Mistry and a major relief for Sir Dorabji Tata Trust, JRD Tata Trust and Sir Ratan Tata Trust, the Mumbai bench of Income Tax Appellate Tribunal (ITAT) has quashed revised assessment orders issued by the IT department based on Mistry's allegations.
Through the order, the appellate tribunal has upheld the tax exemptions given as per Section 11 of the Income Tax Act to the three trusts. The case pertains to allegations levelled by Mistry over the prohibited mode of investment by these Trusts in shares that resulted in revised assessment order by the I-T department. The Commissioner of Income Tax, last year had observed that the trusts may have violated the provisions of section 13(1)(d) of the Income Tax Act during the assessment year 2014-15 and the assessing officer did not probe the breach adequately.
ITAT noted that the Commissioner had acknowledged that Mistry had flagged some of these issues after he was ousted as the Chairman of Tata Sons. "It is well-known that Cyrus Mistry, a former Chairman of the Tata Group, was removed from his position in the Tata Group on 24th October 2016, and within eight weeks of his removal, he sends this material, against the trusts in the Tata group, including the assessee before us, to the Assessing Officer," said the order.
