Despite being partly a civic body responsible for developing essential infrastructural amenities, Mumbai Metropolitan Region Development Authority (MMRDA), because of its capital intensive deals for various projects, has come under the scanner of the Income Tax (I-T) department. Though the authority has sought exemption from income tax claiming it is a charitable body, it may have to pay the I-T department a whopping Rs 1,500 crore if the case does not go in its favour.
The I-T department has been sending recovery notices to the MMRDA since 2003-04, but at present the matter is being discussed with the coordination committee of the state and central governments. The MMRDA has argued that it is a public trust that works on the lines of charity to provide civic amenities and claims its activities are not meant for business purposes.
The I-T department approached the Tribunal. The Tribunal has sent the matter to the co-ordination committee. “If the matter is not resolved amicably, the Tribunal will admit the case for the hearing,” said a source from the I-T department.
Irrespective of merits of the case, this is a major dispute and whether the litigation between two limbs of the State should be allowed to continue, as pe the Apex Court decisions in the case of ONGC, chief Conservator of Forests and others, there should be clearance of the High Powered Committee on Disputes set up within the Cabinet Secretariat. Here there is dispute between the Central Government Department and an arm of the State Department, following the Apex court rulings, the CoD approval should have been obtained by the litigant. It appears that the first appellate authority i.e. the CIT(A) did not accept the cntention of the Revenue, and hence the appeal.