[ By Bobby Anthony ]Foreign contributions sought by the Navajbai Ratan Tata Trust (NRTT) as a non-profitable entity in December 2015 are being scrutinized by the Income Tax Department.The development has come even after the trust had offered to surrender its charitable trust status earlier in 2015.It may be recalled that the NRTT is among six Tata Trusts which had their registrations cancelled...
Foreign contributions sought by the Navajbai Ratan Tata Trust (NRTT) as a non-profitable entity in December 2015 are being scrutinized by the Income Tax Department.
The development has come even after the trust had offered to surrender its charitable trust status earlier in 2015.
It may be recalled that the NRTT is among six Tata Trusts which had their registrations cancelled by the Income Tax Department in October 2019.
On December 10, 2015, the NRTT had made an application under Section 11 (1) of the Foreign Contribution Regulation Act (FCRA), to accept foreign contributions by an association having a definite cultural, economic, educational, religious or social program.
Incidentally, the application was made after it had given up its trust status in February 2015.
In its FCRA application, the NRTT had mentioned its activities in details, adding that it was set up in 1974 by Ratan Naval Tata, in the memory of his grandmother Lady Navajbai Ratan Tata.
It was mentioned that NRTT was registered with the office of the charity commissioner, Mumbai, and is registered under Section 12A of the Income Tax Act, 1961, which enables some types of organizations to be exempt from income tax.
It was pointed out that when a trust or non-profit organization gets registered under Section 12A, it is further eligible to get an exemption from income tax. Trusts and non-government organizations (NGOS) which don’t make profits from their financial transactions are eligible to register for 12A. Only if any non-profitable trust or NGO has not registered for 12A, would its financial receipts or transactions be considered taxable, it was stated.
A spokesperson for the Tata Trusts also stated that, in any event, the 12A registration is a non-issue in as far as the FCRA application is concerned. The rules governing such an application do not mandate any requirement that a trust should be registered under Section 12A of the Income Tax Act, it has been stated.