Central Information Commission
Mr.Rakesh Agarwal vs Cbdt on 9 March, 2010
CENTRAL INFORMATION COMMISSION
Room No. 308, B-Wing, August Kranti Bhawan, Bhikaji Cama Place, New Delhi-110066
File No.CIC/LS/A/2009/00190
Dated : 9.3.2010
This order will dispose of the matter cited above. It may be recalled that a Full Bench of the Commission had heard this matter on 3rd February, 2010. The proceedings of the day are extracted below :-
"The brief facts leading to the present appeal are that Shri Rakesh Agarwal had filed Appeal No. CIC/LS/A/2009/00190 against the decisions of CPIO and the FAA denying him information regarding a Society called Nyayabhoomi. The bench of Shri M.L. Sharma, Information Commissioner, held a number of hearings in the matter on 25.2.2009, 20.8.2009, 15.4.2009, 15.7.2009 & 20.8.2009. In the hearing held on 20.8.2009, appellant Shri Rakesh Aggarwal had requested the Commission to direct the Income Tax Department to put the following information on its website u/s 4 (1) (b) of the RTI Act, viz :-
(i) names and addresses of charitable institutions/entities which have been granted exemption u/s 10 & u/s 11/12 of the Income Tax Act; &
(ii) names and addresses of the donors who have received tax exemption u/s 80 (G) of the IT Act.
Besides, he had also requested the Commission to issue directions to CBDT to provide full access to the public regarding files dealing with registration of institutions/entities as charitable organisations.
2. As these issues had deep legal implications and ramifications, the bench of Shri M.l. Sharma had requested the Chief Information Commissioner to constitute a Full Bench to hear and decide the matter. Pursuant thereto, the Chief Information Commissioner had constituted a bench consisting of the following in this regard :-
(i) Shri A.N. Tiwari, Information Commissioner
(ii) Shri M.L. Sharma, Information Commissioner
(iii) Shri Shailesh Gandhi, Information Commissioner
3. The bench heard the matter on 6.11.2009 at 1530 hrs. The following were present :-
Appellant
1. Shri Rakesh Aggarwal Respondents :-
1. Shri P.V. Rao, DIT (Exemption)
2. Shri Farhat Qureshi, Addl. DIT (Exemption)
3. Shri Amrish Bedi, Addl.DIT (Exemption)
4. Shri Virendra Singh Dhanda, ITO (E) & CPIO
5. Shri Dinesh Verma, CIT (ITA), CBDT
6. Shri Raman Chopra, Director
4. The appellant and the officers of the Income Tax Department were heard. The hearing, however, remained inconclusive. The Bench also decided to direct the CBDT to file their written submissions in the matter for consideration of the Commission and the matter was adjourned.
5. The matter is now scheduled for hearing on 11th March, 2010 at 1600 hrs.
6. Notice may be issued to Chairman, CBDT, to depute senior officer(s) to appear before the Commission and also file their detailed representation two days before the date of hearing."
2. As scheduled, the matter was further heard on 11.3.2010 by the Full Bench. The following were present :-
Appellant
(i) Shri Rakesh Agarwal along with Shri Ajay Kumar Goel Respondents
(i) Shri Raman Chopra, Director, TA-I, CBDT;
(ii) Shri Amrish Bedi, Addl Director (Exemption) II;
(iii) Shri Farhat Qureshi, Addl DIT (Exemption) R-I; &
(iv) Shri P.V. Rao, DIT (E), New Delhi.
3. It is the submission of Appellant Shri Rakesh Agarwal that the criteria of grant of exemption by the Income Tax authorities under the statutory provisions is shrouded in mystery and there is no fool-proof system of restraining the concerned officers from granting exemptions in an arbitrary manner for extraneous considerations. He, therefore, requests for the directions of the Commission to the CBDT to make suo-motu disclosures regarding the registration of charitable trusts/institutions etc u/s 12 AA of the IT Act. More importantly, he also requests for directions for placing the files concerning the grant of exemptions in public domain so as to enable any citizen of India to inspect them without let or hindrance.
4. Shri A.K. Goel, who was issued notice to assist the Commission, broadly supports the stand taken by Shri Agarwal regarding suo-motu disclosure of the identity of the trusts/institutions which have been granted exemption by CIT or Director, IT (Exemptions) u/s 11, 12 and 13 of the IT Act. Shri Goel also files a written representation which is taken on record. Paras 14 & 17 thereof are reproduced below :-
"14 Further, neither the Directorate of Exemptions (Income Tax) nor any of these public charitable organizations is covered u/s 24 read with Second Schedule to the RTI Act. Thus, the information held by this office and in relation to such public charitable organizations cannot be denied.
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17. Just for the information, the financial statements of the Public Ltd Cos are available for inspection or taking copies of the same from the office of Registrar of Companies irrespective of the fact that whether one has invested in the same or not. Same way financials of Private Ltd Cos except profit & loss account are available to the public at large. These are called public documents. One can inspect and analyse the same before entering into any transaction with these Companies. Even in the case of public charitable societies running recognized schools in Delhi, the financials are in public domain and one can have a copy of the same from Directorate of Education, Govt of NCT of Delhi, the controlling body of the Govt."
A bare reading of the above passages would indicate that Shri Goyal has extended the ambit of suo motu disclosures, to envelope the Public Limited Companies and Public Charitable Societies, running schools in Delhi also.
5. The CBDT has also filed a detailed representation. Para 2.1 thereof deals with the registration and filing of Returns for a Trust which is extracted below in extenso :-
"Any Trust which carries activities for a charitable purpose as defined in Section 2 (15) of the Income Tax Act has to first apply for registration under Section 12AA of the Income Tax Act to the concerned Commissioner of Income Tax or the Director of Income Tax (Exemption) in metro stations. The Commissioner or the Director, as the case may be, examines the objects of the organisation and the genuineness of the organisation and its activities vis-à-vis its objects and on being satisfied about the same grant registration under Section 12A of the Income Tax Act.
However, grant of registration under Section 12A per-se does not make the income of any such registered organization automatically exempt under the Income Tax Act. It is only a precondition for eligibility of the organization to claim exemption under Section 11. The claim for exemption under Section 11 is made from year to year by filing a return of income before the Assessing Officer. In the return, particulars of the registration and other information about the activities carried on by such organization are to be filed together with the Income and expenditure account of the Trust duly audited by a Chartered Accountant and an audit report. The Assessing Officer after examining the return and making such other enquiries as may become necessary grants or denies the claim for exemption under Section 11. The decision of the assessing officer is governed by the conditions laid down in sections 11 and 12 of the Income Tax Act. In case the claim for exemption is rejected in any year, the assessee trust becomes liable to pay tax on his entire receipts. It is therefore submitted that exemption is not, in the nature of a concession given to the assessee. It is only after the assessee satisfies certain stringent conditions laid down under Sections 11 to 13 of the Income Tax Act that it becomes eligible for exemption from payment of income tax on a year to year basis."
6. In para 2.3, it has been pleaded that information relating to exemptions under section 11 would impinge on the personal character of information furnished in the Returns of the income filed by the trusts and any directions for disclosure thereof would be contrary to the existing rulings of the Commission. It has also been argued that despite grant of exemption, such trusts remain assesees and it will not be fair and reasonable to make a distinction between different categories of assesees who file their returns. To quote :-
"The applications for registration under Section 12A is directly related to the exemption the entity intends to claim in its return of income. The information furnished in the return of income contains financial information about the receipts and expenses on the various objects actually carried out by the trust. Consequently, disclosure of information about exemptions granted under Section 11 would involve disclosure of personal details held by the department in a fiduciary capacity. Disclosure of such information to public in general or a third party would require seeking the objections from the concerned trust/society. Seeking objections of all trusts who have filed returns from year to year or have sought registration with the income tax department would involve huge additional work without any commensurate gains and may involve the Department in litigation with these trusts in various courts. More over, the claim for exemptions under Section 11 made by the trusts are examined every year by the assessing officer. Therefore, the status of exemption granted to a trust is subject to change from year to year. Thus, a one time uploading of data of trusts granted registration under Section 12A would not be feasible."
7. It has been further submitted in the representation that there is no consolidated/centralized data base of information of names and addresses of all entities granted exemption u/s 11 and this information is being maintained by about 4000 Assessing Officers across the country and it is not possible to upload this data on a centralized basis.
8. With reference to voluntary disclousre of donors who have been granted benefit u/s 80G of the IT Act, the submission of CBDT is as follows :-
"3.1 The CIC has proposed to consider the issue of placing the names of all donors who have been granted benefit under Section 80G of the Income Tax Act on the website under Section 4 (1) (b) of the RTI Act. It is submitted that deduction under Section 80G is admissible to persons who make donations to trusts registered under Section 80G of the IT Act. The claim for deductions under Section 80G is made in the returns of such donors who are mainly individuals and HUF. The number of individual and HUF taxpayers exceed 2.5 crores. These persons file their returns of income before their concerned Assessing Officer across the country, numbering over 4000. No consolidated data of deduction under Section 80G claimed by these donors is maintained as the such consolidated data is not required by the department. The information pertaining to deduction under Section 80G availed by each assessee would be available in the return of the respective year of such donors. It will involve disproportionate amount of efforts to extract such data from individual returns of such large number of taxpayers every year and place it centrally. Moreover, such information of donation is again personal information submitted by the donors/assesses to the department in its fiduciary capacity. The Commission has consistently held that the information pertaining to the income tax returns need not be disclosed."
9. During the hearing the CBDT officers present before the Commission have underlined the points incorporated in the representation noticed above. However, they have fairly submitted that if the Commission decides to place the information in public domain, CBDT should be given reasonable time to put in place the necessary infrastructure for the purpose.
DECISION
10. We have given a serious thought to the matter. We have also taken note of the pre-amble of the RTI Act which aims at promoting transparency and accountability in the working of the every Public Authority. In this context, it would be apt to advert to sub section 15 of section 2 of the IT Act which defines "charitable purpose". This sub section is extracted below :-
"15. 'Charitable purpose' includes relief of the poor, education, medical relief and advancement of any other object of general public utility."
Needless to say, avowed purpose for which these institutions/entities come into existence is charity. Charity and secrecy are contradiction in terms. Any charitable institution should have no secrets and should be open to public for all purposes, including its finances. In other words, in our opinion, it will be in the larger public interest if the identity of the charitable trusts/institutions/entities which are granted exemption from income tax under the statutory provisions are placed in the public domain. Hence, in exercise of powers under section 25(5) of the RTI Act, we hereby recommend that the identity of the charitable trusts/institutions/entities which have been granted exemption from income tax under section 10 & under section 11/12 of the Income Tax Act is placed in public domain by way of suo-motu disclosure by the CBDT in terms of section 4(1)(b) r/w section 4(2) of the RTI Act. However, given the magnitude of the work involved, the plea of the officers of CBDT for grant of reasonable time in this regard cannot be disregarded. We think that time period of 08 months will be reasonable. The Chairman, CBDT, will send a compliance report to the Commission after the expiry of 08 months.
11. Now we come to the question of placing the names and the addresses of the donors who have received tax exemption under section 80G of the I.T. Act, in public domain. The submissions made by the CBDT officers in this regard have been extracted here-in-above. We feel the weight of their submissions. It is to be noted that the claim of deductions under section 80G is made in the returns of donors who are mainly individuals and HUF. Their number is said to be about 2.5 crores. No consolidated data of deductions under section 80G is being maintained by the Income Tax Department. Hence, in our view, recommending such an action will not be desirable at this stage.
12. The matter is decided accordingly.
Sd/- Sd/-
(Shailesh Gandhi) (M.L. Sharma)
Information Commissioner Information Commissioner
Sd/-
(A.N. Tiwari)
Information Commissioner
Authenticated true copy. Additional copies of orders shall be supplied against application and payment of the charges, prescribed under the Act, to the CPIO of this Commission.
(K.L. Das) Assistant Registrar