I-T exemption sought for VTU

Union Finance Minister Arun Jaitley on Wednesday assured the State government that the income tax (I-T) department would study and take a decision as per the law in connection with attaching two bank accounts of the Visvesvaraya Technological University (VTU).

Chief Minister Siddaramaiah, who met Jaitley here, appealed for tax exemption to VTU stating that the institution was run by the State government on a no-profit basis. He brought to Jaitley's notice that VTU was established by the government and as per the VTU Act, 1994, its income was exempt from tax.

“The Finance Minister assured me that he would ask the I-T department to study the issue and take appropriate decision as per law”, Siddaramaiah told reporters after the meeting. The I-T department recovered tax to the tune of Rs 439 crore from VTU for assessment years 2004-05 to 2013-14. It claimed Rs 250 crore of basic tax dues besides interest on the due amount and penalty. The university had first approached the Income-Tax Tribunal seeking exemption from tax. When the tribunal ruled in favour of the department, the VTU appealed in the High Court.

Though the court granted interim stay in preliminary hearing, in the final hearing on December 20, 2013, it dismissed VTU's appeal. Following the court order, the I-T department froze two bank accounts of VTU. The I-T department said VTU had bank deposits worth over Rs 400 crore and it had not paid I-T.

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