FEBRUARY 20, 2018
The Karnataka High Court has upheld the Income-Tax Department’s action of withdrawing exemption granted to a Raichur-based leading educational institution from payment of income tax after it was revealed from raids that the Trust was illegally collecting crores of rupees as capitation fee and donations, besides indulging in “money laundering”.
Justice Vineeet Kothari passed the order while dismissing petitions filed by Navodaya Education Trust, which runs a medical, dental, engineering colleges, besides other educational institutions in Raichur city, and its four trustees — Sunki Rajendra Reddy and others. The petitioners had questioned the department’s December 21, 2017, order of withdrawing exemption from income tax under Section 23-C(vi) of the Income Tax Act.
The department’s raid found that the Trust had been collecting a staggering ₹50 to ₹100 crore of “unaccounted money” in the form of voluntary donations.
