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I-T to cancel 'charitable' status of Ramdev trust, withdraw exemptions

PTI 28 Aug 2012, 10:59:41 AM IST
New Delhi, Aug 28: The Income-Tax department is set to cancel the registration of yoga guru Baba Ramdev's trust as a charitable organisation and withdraw all exemptions provided to it.

A final order  has been passed on August 24 by the Income-Tax (exemption) unit in the case of  Ramdev's Patanjali Yogpeeth Trust, for the year 2009-10, after a scrutiny revealed that it was involved in several commercial and trading activities, reports Indian Express.

While the trust has so far enjoyed exemption under Section 12 (a) of the Income-Tax Act having declared its income as “nil”, sources said a scrutiny of its accounts and activities pegged its taxable income at Rs 72.37 crore.

The I-T exemption unit sought clarifications in the form of around 100 questions from trust officials before issuing the order, and the department is now in the process of despatching final penalty notices and cancellation of registration orders.

The summary of the I-T Department's order is that while enjoying exemption, the Patanjali Trust showed revenue expenditure of Rs 8.71 crore against its gross income of Rs 74.74 crore.

This works out to an expenditure of 12 per cent and a surplus of Rs 66.03 crore.

Exemption is provided to a trust provided 85 per cent of its income is spent on charitable purposes.

Major findings of the probe that found violations of the Income Tax Act and thereby withdrew exemptions are:  *The Patanjali trust declared Rs 88.73 lakh as part of its corpus under the Vanprastha Ashram scheme and sold cottages for between Rs 5.5 lakh and Rs 21 lakh each.

*It received tracts of land as “donation” in Gurgaon. The precise location and value of the land are still being investigated.

*The trust received Rs 38.35 crore as “donation” from its affiliate organisation in Hardwar, the Divya Yog Mandir Trust. This has now been disallowed.

*A sum of Rs 14.75 crore was received as “membership fees” in the year that was under scrutiny for various schemes. One could pay Rs 21,000 for a “respected membership” to Rs 11 lakh each for a “corporate membership”.

*A sum of Rs 15.41 crore was received by the trust for holding yoga camps where those attending purchased coupons of different classes —- a ‘VIP' coupon for Rs 2,100 and a diamond coupon for Rs 1,100.

*The trust was found to have received Rs 13.69 crore as “anonymous donation” while admitting only to such donations totalling Rs 1.07 crore.

*Serious discrepancies detected in the manner in which the Patanjali trust launched its disaster relief funds. For the year under assessment, Rs 4.36 crore was shown as “donations” for the fund, of which Rs 1.58 crore was claimed to have been spent on Bihar flood victims. Of this amount, Rs 1.24 crore was shown to have been spent on purchase of medicines from Divya Pharmacy, another affiliate organisation, of which no evidence was found by the IT exemption wing.

*The IT order also mentions that the trust claims that a major chunk of its expenses had been incurred by way of capital gains from purchase of land, which however has not yet been transferred to it.

*Earlier the Service Tax department had calculated that a sum of Rs 4.94 crore was due from the trust for 2006-2011. The case is pending with the commissioner of central excise in Meerut.