The income tax department has booked at least nine educational institutions in Pune — a booming educational hub — for concealing income worth over Rs 435 crore. The list of such educational institutions include top colleges in Pune for MBA and engineering — Sinhagad Technical Educational Society (Rs 52.32 crore income undisclosed), Bharati Vidyapeeth (Rs 176 crore), DY Patil Pratishthan (Rs 91 crore). Other educational institutions facing similar violation charges are Bhansilal Ramlal Agarwal Charitable Trust, Maharashtra Academy of Engineering and Educational Research, Vidyavardhini Trust and others.
The investigation wing of the Central Board of Direct Taxes (CBDT) has prepared a report on educational institutions availing the tax exemptions given to trusts or non-profit organisations.
The department has found that the institutes have taken donations after promising admission in colleges. Other violations include — non-genuine donors reflected in the donation books of the institutes, unexplained cash and jewellery parked with top officials of the institutes, money received against promise for admission, capitation fee taken at the time of admission and deposit of the capitation fee in the building fund.
According to Maharashtra Educational Institutes (Prohibition of Capitation fee) Act 1987, capitation fee cannot be taken from the students and then deposited in the building and corpus fund.
However, in cases where the tax department has ordered cancellation of registration for these institutes, the institutes have obtained an injunction order from the court . The rule is that educational institutions which are run by trusts or any such non-profit organisation have to get themselves registered with the income tax department under Section 12A and 10(23C) of the Income Tax Act to avail the benefit of tax exemptions. Cancellation of the registration means that the institutes cannot avail the tax benefits. The tax department can cancel registration if they come across violations by them under the I-T Act.
