The Income Tax Appellate Tribunal (ITAT) has deleted references pertaining to Cyrus Mistry in the recent order related to three Tata Trusts.
On Monday, ITAT had said that submissions made by Mistry was “doubtful” because it came after eight weeks of his removal as the Chairman of Tata Sons. “The objectivity of the averments made by Cyrus Mistry…seems to be extremely doubtful,” it said.
ITAT has now revised its order clarifying that “One fact, which was inadvertently missed out, was that the information furnished by Mistry was in response to a notice.”
Commenting on the ITAT clarification, Mistry’s office said the reversal of the comments made by the tribunal acknowledges that information sent by Mistry to the Deputy Commission of Income-tax (DCIT) had been in response to specific summons, conduct that is expected of any law abiding person. “This acknowledgement by the ITAT corroborates the submissions in this regard put forward by the SP Group before the Supreme Court, and is one step towards the vindication of truth and justice,” said a statement from Mistry’s office.
“It is a matter of record that after Tata Sons failed to respond to an earlier notice, the DCIT had issued summons and called upon directors of Tata Sons, including Mistry, to comply with a notice issued under Section 133(6) of the Income Tax Act. Even the Articles of Tata Sons envisages disclosure of information when required to do so by a court of law. The DCIT is a “civil court” under the Income Tax Act, 1961. As a director of Tata Sons, Mistry responding to the summons was a legal requirement and fully in accordance with the Articles of Association of Tata Sons and more importantly, a discharge of his fiduciary duties as a director,” it added.
The statement further said that instead of seeking to blame Mistry at every turn, the trustees of the Tata Trusts must introspect why there is greater scrutiny on their operations by the various government bodies.
“The trustees must introspect why in July 2018, the Public Accounts Committee, a Parliamentary Committee expressed concern that Public Charitable Trusts were being used to run businesses for profit and repeatedly violating provisions of the Income Tax Act. The CAG Report of 2019 records that the corpus funds of Trusts are being utilised to control the business of the group companies instead of applying funds for charitable purposes. The trustees should also introspect why they continue to seek to donate hundreds of millions of dollars to rich foreign universities with deep pockets and worse, where one of the Trustees has an association, instead of applying the tax-exempt money for the development of educational institutes in India as mandated by the settlors of the Trusts,” Mistry’s office said.