Mumbai: The Income Tax Appellate Tribunal has upheld the tax-exempt status of the Tata Trusts<\/a> and allowed their appeals against a revenue department order seeking to re-examine their tax assessments.

The Mumbai bench of the ITAT rejected the income tax department’s claims that the trusts had violated laws related to charitable trusts by holding shares of Tata Sons<\/a>.

This is the tribunal’s second ruling in favour of the Tata Trusts – Sir Ratan Tata Trust<\/a>, Sir Dorabji Tata Trust and the JRD Tata Trust. The ruling was for the assessment year 2015-16. In December 2020, the tribunal ruled in favour of the Tata Trusts in an identical case for assessment year 2014-15.

“Since the revision order under Section 263 of the Act for the assessment year 2015-16 was passed on identical facts and circumstances prevailing for the year 2014-15 in all the three trusts... all the three appeals... shall apply mutatis mutandis to this assessment year also,” a two-member bench of the ITAT said in its order of March 8, which was made available on Monday. “The operative portion of the said order of the tribunal is not reproduced herein for the sake of brevity. Accordingly, the grounds raised by the assessee are allowed.”

In its December 2020 order, the tribunal observed that “as long as the shares are part of the corpus, as on June 1, 1973, or the shares are received as an accretion to the shares being held to be part of the corpus, the provisions of Section 13(1)(c) will not come into play.”