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Trustees of Sir Dorabji Tata Trust to meet amid I-T order
MUMBAI: The trustees of the Sir Dorabji Tata Trust are slated to meet on Wednesday amid a controversy caused by an income-tax assessment order that withdrew tax exemption for the philanthropic institution and led to questions being raised about the position of managing trustee R Venkataramanan, according to two people familiar with the meeting’s agenda.
Managing Trustee R Venkataramanan’s resignation will also be considered at the meeting, they said, though the primary item on the agenda is about the annual budgets to be allocated for the new financial year. The withdrawal of exemption was on account of Venkataramanan’s “significant” compensation as per the I-T department’s order.
The trustees may also discuss the possibility of creating a new designation — replacing managing trustee — that will better reflect the responsibilities and role of a CEO of the trusts.
The two people cited said Venkataramanan is likely to be shifted to Tata Sons, the main holding company which is majority controlled by the Tata Trusts, and may be posted abroad.
An email query to the Tata Trusts’ spokesperson went unanswered.
“The possibility of Venkataramanan being relocated to the UK is high,” one of the two persons said. A final decision on the posting is yet to be taken and a choice will be given to Venkataramanan, in view of his long association with the group, the person said.
ET in its January 31 and February 8 editions had reported that the tax department had withdrawn the tax exemption status because of the remuneration paid to Venkataramanan. In its order for the assessment year 2016-17 dated December 30, 2018, the I-T department has ruled that the annual salary of ?2.66 crore drawn by Venkataramanan was not in accordance with the trust’s deed.
Importantly, the order withdrew the tax exemption status of Sir Dorabji Tata Trust on account of what it described as Venkataramanan’s compensation. If the I-T order is upheld, it would be a major blow to the charitable institution as at least 33% of the income will be taxed. The tax amount in question is in the range of ?300 crore annually, which is a lot for a philanthropic trust.
The Tata Trusts are also expected to contest the order in a higher forum.
Venkataramanan is being probed by the CBI and the Enforcement Directorate in a separate case involving AirAsia India, in which the Tata Group has a 51% stake.