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The Bombay High Court has stayed Income Tax (I-T) Department notices sent to six Tata Trusts to show cause why their registration should not be cancelled. The matter will next be heard on June 15.
The notices were sent on March 8 under Section 12A of the Income Tax Act, alleging “non-compliance” of rules that govern use of trust funds.
Issuing the interim stay on Thursday, a Bench, comprising Justice MS Sanklecha and Justice SK Shinde, asked the IT authorities to file a reply on their jurisdiction, in the first place, to issue such a show-cause notice, Tata Trusts said in a statement.
Arguing for the Tata Trusts, Darius J Khambata submitted that the six trusts concerned themselves had surrendered their tax registrations in 2015. The matter pertains only to registrations of the trusts under the Income Tax Act. The trusts continue to be registered with the Charity Commissioner for carrying out charitable activities, it added.
The Tata Trusts had moved the Bombay High Court to challenge the show-cause notice, which would have resulted in withdrawal of tax exemption.
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