Skip to main content

CAG Report on Trusts

Trusts evading taxes - Income Tax Department casual - CAG Fumes 

IN its Report No. 20 of 2013 submitted top Parliament, the CAG has come down heavily on the Income Tax Department for its laxity in dealing with Trusts - not all that charitable. It is a mandatory requirement for charitable trusts/Institutions (Trusts) to get registration under Act for claiming exemption. The CAG scrutinized 90,000 cases in which the Income Tax Department (ITD) granted registration and observed several mistakes, some of which are:
ITD granted registrations/approvals/notifications to the 799 Trusts without verifying necessary documents such as copy of the Trust Deed, proper clauses in the Trust Deed, audited accounts etc.
ITD granted approvals/registrations/notifications in 457 cases in which there was no dissolution clause in the Trust Deed.
ITD granted registrations/approvals/notifications to 73 Trusts having no PAN which is in contravention of the provisions of Act.
ITD granted approvals /registrations In 60 cases Involving tax effect of 87.33 crore irregularly to Trusts whose objects were not charitable in nature.
There was no correlation in granting or rejecting approvals/registrations among different authorities. ITD did not take action to cancel registration in three cases Involving tax effect of Rs. 4.94 crore.
ITD granted registration/exemption in 161cases irregularly involving revenue impact oft 24.23 crore with retrospective effect contravening provisions contained in Act.
There was a delay of more than 6 months to 24 months beyond stipulated period in granting approvals/registrations/notifications in 594 cases. The delay on the part of ITD resulted in deemed approval, to Trusts which were otherwise not eligible.
ITD allowed irregular exemptions involving tax effect of 8.88 crore to 53 Trusts without granting registrations /approvals/notifications.
ITD allowed exemptions In 72 cases Irregularly Involving tax effect of Rs. 8.88 crore despite rejection of registrations/approvals by the competent authority.
ITD allowed exemptions in 9 cases irregularly u/s 10(23C) (iiia)/(iiiad) involving tax effect of 2.39 crore though the gross receipt exceeded one crore.
ITD granted exemptions in 117 cases irregularly without submission of audit reports with the returns.


Popular posts from this blog


CONTENTS SR. NO. CHAPTER PAGE NO. INTRODUCTION STOCK & RECEIVABLES AUDIT VERIFICATION OF STOCK & DEBTORS PROCEDURE OF STOCK AUDIT VERIFICATION OF SECURITIES ANALYTICAL REVIEW INTERNAL CONTROL QUESTIONNAIRE STOCK b) BOOK DEBTS LIST OF DOCUMENTS TAKEN AS WORKING PAPERS SPECIMEN INSPECTION REPORT SPECIMEN MANAGEMENT REPRESENTATION LETTER CHAPTER 1 INTRODUCTION: Banking is an important sector of the economy of any country and for the development of the economy a healthy banking system is a must. After the liberalization of the economy, the banking system has undergone a total change in India. There is hard competition in the banking industry to survive in the current circumstances. With the purpose to have better financial discipline & to ensure uniformity in accounting norms RBI introduced the concept of assetclassification & income recognition as per the recommendations of Narasimhan Committee. It was also suggested to classify the advances given by banks into Performing & Non Perfor…

Excel Add-in to convert amount in figures to words by Premal

AmtInWords.xla is attached to this mail. It is an MS Excel Add-in written by me to convert amount available in figures to words.
Copy the attached file to the folder where excel stores the add-ins. (To know where excel stores the add-ins, open any workbook, click on Tools - Add-ins - Browse)
Then open an excel workbook. Click on Tools - Add-ins - Browse - Give the path to this Addin - Ok
You can use the functions AmtInWords and AmtInWordsUS in any worksheet. The syntax is:
=AmtInWords(decimal number/cell reference, [currency code])
=AmtInWordsUS(decimal number/cell reference, [currency code])
Examples follow:
=AmtInWordsUS(B3) ' Shall give the amount in millions (US format)
=AmtInWordsUS(B3,"USD") ' Shall give the amount in millions (US format) and in US currency (Dollars)
=AmtInWords(C4,"GBP") ' Shall give the amount in lakhs and in UK currency (Pounds)
The system shall N…

Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016?

*1. What is Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016?*Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016 is a scheme notified by the Government of India on December 16, 2016 which is applicable to every declarant under the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.*2. Who is eligible to deposit in PMGKS?*The deposit under this Scheme shall be made by any person who declared undisclosed income under sub-section (1) of section 199C of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.*3. In what form will the deposits under this scheme be held?*The Deposits shall be held at the credit of the declarant in Bond Ledger Accounts (BLA) maintained with Reserve Bank of India.*4. Who are the authorized agencies where the application and amount of deposit will be accepted?*Application and amount for the deposit (in the form of Bond Ledger Account) shall be received by any banking company to which the Banking …