The Income Tax department has rejected the appeal of the Civil Services Institute (CSI) in which the authorities of this institute with club-like facilities had claimed that the CSI was exempt from paying income tax. The appeal was rejected by the income tax commissioner (Appeal), said the state’s chief commissioner of income tax Pramod Kumar Gupta.
Addressing the media here on Wednesday, Gupta said that the CSI had filed an appeal in response to a notice served by the IT department after assessment for payment of Rs 2.39 crore income tax. Stating that the decision of the income tax commissioner (Appeal) was justified, he said that the decision had been taken taking various aspects in to consideration.
It will be recalled here that filing its returns, the CSI had stated that it was under the category exempt from paying income tax.
The Computer Assisted Scrutiny Selection (CASS) system of the Income Tax department had brought up the CSI in Dehradun on the radar of the department. The CSI which is a society concerning officers of the civil services with the chief secretary as its chairman, had stated that it had no taxable income as it was liable for exemption. However, the return filed and the expenses shown did not match in nature due to which it was put up by CASS for a scrutiny. The expenses were not being incurred on works of a charitable nature approved for exemption. Scrutiny had also revealed that the CSI had received Rs 5 crore in grant from the government. Further, interest amounting to about Rs 54 lakh had also been received by the institute on this sum. Considering the facts, it was ascertained that the Rs 5 crore grant received by CSI in financial year 2014-15 (assessment year 2015-16) was taxable income along with Rs 54 lakh interest received on the amount. The income tax department calculated the tax payable on Rs 5.54 crore at about Rs 2.39 crore. The CSI had paid a sum of Rs 47 lakh towards income tax and then approached the income tax commissioner (Appeal) against the department’s decision.
