The Income Tax Department has cancelled the tax exemption status of the Centre for Policy Research think tank on June 30, The Hindu reported on Tuesday.
A tax exemption status can provide complete relief from taxes, reduced rates or tax on only a portion of the income.
The Centre for Policy Research was founded in 1973 and describes itself as a “non-partisan, independent institution dedicated to conducting research that contributes to high-quality scholarship, better policies, and a more robust public discourse about the issues that impact life in India”.
In September, the think tank, along with the non-governmental organisation Oxfam India and the Independent and Public Spirited Media Foundation in Bengaluru, were raided by the Income Tax department.
A month later, the tax department issued a show cause notice to the Centre for Policy Research asking why its tax exemption registration under the Income Tax Act should not be cancelled in view of several alleged irregularities, reported The Hindu.
According to the Income Tax department, the think tank had made payments to persons who had not filed their personal Income Tax Returns and questioned the commercial nature of the books published by it.
In March, the Ministry of Home Affairs had suspended the Foreign Contribution Regulation Act licence of the Centre for Policy Research for 180 days. The ministry had said that the action was taken based on the findings submitted by the Income Tax department, which suggested that certain provisions of Foreign Contribution Regulation Act were not followed by the think tank.
Under the provisions of the law, non-profit organisations operating in India can receive foreign funds only after they are registered under the FCRA. The suspension of the licence makes nonprofits in the country ineligible to get fresh donations from abroad or use the existing foreign donations without the home ministry’s clearance.
The think tank has filed exhaustive replies with the tax department of the exemption issue and will seek all forms of recourse available, a functionary of the Centre for Policy Research told the newspaper. Following the suspension of its FCRA licence, the think tank had to significantly cut down its staff strength by more than half, the functionary added.