I-T appellate tribunal upholds withdrawal of I-T exemption granted to Young Indian

NEW DELHI: The Income tax appellate tribunal, in a judgment delivered on Friday, upheld the withdrawal of I-T exemption granted to the Young Indian, a charitable organization majority controlled by interim Congress president Sonia Gandhi, her son Rahul and daughter Priyanka Gandhi Vadra since assessment year 2011-12, when the company was incorporated. The tribunal dismissed the appeal made by Young Indian that its exemption should not be withdrawn retrospectively.
This comes as a big blow to the senior functionaries of the Congress and the Gandhi family as it will justify the levy of Rs 145 crore tax on Young Indian by the Income Tax department in July last year after it had withdrawn tax exemption to the company rejecting its contention of being a charitable organization.
The ITAT has said that the Young Indians “entire move for acquiring the AJL (Associated Journals Ltd), which had stopped/suspended its publication activities. It was also holding large number of properties worth hundreds of crores with huge rental and lease income was for acquiring control and interest in such properties for mere sum of Rs 50 lakh. Can prudence justify such acquisition was for furtherance of charity or for furtherance of the objects of the Young Indian?”.
The ITAT went into details of Rs 90 crore transactions in which the Congress had loaned this amount to the AJL and later agreed to write off the debt for a mere Rs 50 lakh when Young Indian took over the AJL loan in lieu of transfer of all shares and properties worth over Rs 400 crore of AJL to Young Indian.
“In view of our findings, we hold that the CIT-E (Commissioner I-T exemption) was justified in cancelling the registration from the assessment year 2011-12, because none of the activities of the assessee (Young Indian) was carried out in accordance with its objects nor its activities can be held to be genuine. Consequently, the appeal of the assessee is dismissed,” the order of ITAT said.
The appellate tribunal said that the only activity of the assessee was borrowing of Rs 1 crore from Kolkata based company and making the payment of Rs 50 lakh to AICC and applying for allotment of shares against cancellation of loan. “All these activities definitely cannot be held to be in furtherance of the objects of the Young Indian, because at no point of time, it was ever stated what was the purpose and Read More – Source