3 days ago
VTU Recovers Over Rs 700 Crore After 14-Year Tax Battle
Visvesvaraya Technological University, or VTU, had its bank accounts frozen by the Income Tax Department in 2012-13.
The department said the university owed Rs 250 crore in taxes.
It argued that VTU did not have the required tax exemption under Section 12(A).
VTU challenged the issue in court, but the department won at the stages mentioned in one report.
The university then examined old records and filed a Right to Information application.
The information showed that VTU had applied for tax exemption in 1999.
Using this information, VTU pursued the matter and recovered more than Rs 700 crore.
The university plans to use the money to support staff salaries.
Visvesvaraya Technological University recovered more than Rs 700 crore in corpus funds after a 14-year dispute with the Income Tax Department.
The department froze VTU’s accounts in 2012-13 and demanded Rs 250 crore in taxes dating back to the university’s establishment.
The Income Tax Department said VTU lacked tax exemption under Section 12(A) of the Income Tax Act.
VTU’s court challenges were unsuccessful, with the department prevailing through the Income Tax Tribunal and Supreme Court, according to one report.
VTU later used information obtained through the Right to Information Act, including a 1999 entry register, to pursue recovery of the funds.
- Who
- Visvesvaraya Technological University and the Income Tax Department; Vice-Chancellor Prof S Vidyashankar led a review of the university’s records.
- What
- VTU recovered more than Rs 700 crore in frozen or seized corpus funds after a 14-year tax dispute.
- Where
- At Visvesvaraya Technological University, headquartered in Belagavi, Karnataka.
- When
- The accounts were frozen in 2012-13, and the recovery followed a 14-year struggle.
- Why
- The Income Tax Department demanded Rs 250 crore, saying VTU had not obtained tax exemption under Section 12(A) of the Income Tax Act; VTU later used RTI-obtained records to pursue recovery.
Visvesvaraya Technological University
Income Tax Department
Tax exemption and liability
Visvesvaraya Technological University
VTU said it had applied for tax exemption under Section 12(A) as early as 1999 and challenged the tax action in court.
Income Tax Department
The Income Tax Department said VTU had not obtained the exemption and demanded Rs 250 crore in taxes from the time the university was established.
Recovery of the funds
Visvesvaraya Technological University
VTU used RTI information, including the 1999 entry register, to pursue legal recovery of its money and ultimately recovered more than Rs 700 crore.
Income Tax Department
The department initially froze or seized VTU’s accounts over the alleged tax dues and, according to one report, prevailed in proceedings from the Income Tax Tribunal through the Supreme Court.
Key facts
- University
- Visvesvaraya Technological University (VTU)
- Recovered amount
- More than Rs 700 crore
- Original tax demand
- Rs 250 crore
- Accounts frozen
- 2012-13
- Corpus held when accounts were seized
- Rs 450 crore in various bank accounts
- Tax provision cited
- Section 12(A) of the Income Tax Act
- Recovery method
- Information obtained under the Right to Information Act, including a 1999 entry register
- Planned use
- VTU plans to deposit the funds for 10 years and use interest income from the 11th year for staff salaries
Quotes
Prof S Vidyashankar
Vice-Chancellor of Visvesvaraya Technological University
“We came to know that the university had applied for tax exemption under Section 12(A) as early as 1999. However, there were no documents available to prove this. Finally, we filed an RTI application before the Income Tax Department and obtained the 1999 entry register. Through this, we are now recovering our university’s money.”
thehansindia.com
Sources
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