Parliamentary Panel Likely To Examine Cancellation Of Six Tata Trusts’ Registration, Alleged Violations
Signage for Tata Group is displayed atop of the Tata Communication Ltd. office building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Parliamentary Panel Likely To Examine Cancellation Of Six Tata Trusts’ Registration, Alleged Violations

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

Tata Trusts, a philanthropic organization associated with India’s salt-to-software Tata Group, faces a tax liability of about Rs 12,000 crore after authorities canceled exemptions to six of its entities.

The cancellation should take effect from 2015, when registrations were surrendered and the Trusts itself consented to the move, according to a statement from Tata.

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 flagged in its report several alleged violations. The PAC's sub-committee had also demanded a probe into the "blatant tax violations" by the trusts.

Sources in the PAC said the panel will look into the cancellation of the issue and examine the alleged tax-related violations as reported by the previous committee.

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

The Trusts' six entities that lost their registrations are: Jamsetji Tata Trust, R.D. Tata Trust, Tata Education Trust, Tata Social Welfare Trust, Sarvajanik Seva Trust, and Navajbai Ratan Tata Trust. The order does not affect Sir Dorabji Tata Trust and Sir Ratan Tata Trust, the biggest under the umbrella of Tata Trusts—a cluster of charitable organizations controlling 66% of Tata Sons, the holding company of the group.

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