ITAT omits inadvertent observations made against Cyrus Mistry in its order

The Income Tax Appellate Tribunal (ITAT) has expunged certain strong observations made against former Tata Sons chairman, Cyrus Mistry, on his access to information with respect to Tata Trusts.

The tribunal clarified that it had inadvertently failed to mention that the information furnished by Mistry was in response to an income-tax notice.

The tribunal’s corrigendum comes after it made strong remarks against Mistry while restoring the tax exemption of the three major Tata trusts — Sir Dorabji Trust, JRD Trust and Ratan Tata Trust.

On Wednesday, the tribunal bench, presided over by Justice PP Bhatt and Pramod Kumar, said that their order of December 28 stands modified.

The tribunal on Monday had restored the exemption status of the three Tata trusts and quashed the claim of the tax authorities that these trusts had breached various laws related to tax relief, including that their trustees had substantial interest in Tata Sons.

In the same verdict, the tribunal had said, “His (Mistry’s ) action of supplying documents to the Income-Tax Department, without any authorisation from the company, even though they were apparently obtained by him in the fiduciary capacity, almost immediately after being removed as chairman of the Tata Sons, cannot be said to have been influenced by call of a pure conscious and high ground of morality.”

On Wednesday, the ITAT omitted this reference and corrected a couple of typographical errors in the paragraph pertaining to Mistry. The modified order states: “It is well known that Cyrus Mistry, a former chairman of the Tata Group, was removed from his position in the Tata Group on October 24, 2016, and within 8 weeks of his removal, he sent this material in response to the notice, against the trusts in the Tata Group, including the assessee before us, to the assessing officer.”

“The inputs from those engaged in rivalry with an assessee ought to have been considered by the department with a reasonable degree of circumspection and should not be placed on such a high pedestal so as to relegate all other material facts and accepted past assessment history of the case into insignificance,” the tribunal said.

Reacting to the tribunal’s corrigendum, Mistry’s office said “We note that the tribunal has issued a corrigendum on its own, to correct the wild personal allegations made against Mistry that formed part of its order dated 28 December, in proceedings where he was not even a party. While we all are extremely proud of the good work that has been done by the Tata Trusts in the past, the question today is whether the decision to deviate from the highest standards of governance imperils the largest public charitable trusts in India, and prevents benefits from reaching its rightful beneficiaries, the people of India. The Mistry family has for several decades acted as a guardian of Tata Sons. As long as we are associated with the Tata Group, we will continue to be the voice for truth and transparency,” the statement said. 

It said, moreover, “The current trustees, who are fiduciaries, have been tasked with the noble goal of improving the lives of millions of Indians through philanthropy. Instead of seeking to blame Mistry at every turn, the Trustees of the Tata Trusts must introspect why they have deviated from this path, leading to a greater scrutiny on their operations by the various government bodies.”