Tax consultant charges VTU Rs 35 crore

There are tax consultants and there are the kind hired by VTU.

Officials from Visvesvaraya Technological University, Belagavi, were stumped after a Bengaluru-based tax consultant they hired to win back around Rs 450 crore from the Income Tax department raised a bill for Rs 35 crore.

Even more weird is the fact that the bill was raised five months before the final verdict was pronounced in favour of the VTU.

A copy of the bill and the order passed by the Income Tax Appellate Tribunal, Bengaluru, show the bill was raised on January 18, 2018, while the final order was passed five months later on June 14, 2018.

According to documents available with DH, the then registrar of the varsity had rejected the consultant’s bill. The consultant, a former I-T commissioner, contended the bill was as discussed with the vice-chancellor.

The Executive Council members of the VTU said the vice-chancellor had not placed the issue before the Council, which is the highest authority of the varsity.

“The Executive Council had accorded powers to the vice-chancellor to appoint a consultant, but not by violating norms. We are not aware of the MoU signed, nor the invoice raised,” said a senior member.

Enquiry demanded

Dr Sanjeev Kubakaddi, member of the Executive Council (Governor’s nominee), demanded an enquiry into the bill.

“Why was the Executive Council kept in the dark even after so many correspondences between the consultant and the university? When the Governor has enquired alleged irregularities by registrar based on anonymous letters, we demand that he set up inquiry on this issue also.”

Seeking clarification on the issue, DH reached out to VTU Vice-Chancellor
Karisiddappa. Despite repeated calls and messages, the VC did not respond.

Meanwhile, official sources from the university said that around Rs 60 lakh has already been paid to the consultant as professional charges.

The consultant had appeared 13 times before the tribunal for arguments for which he has charged Rs 4 crore. And for six of his appearances for arguments before Commissioner (Appeals), he has quoted Rs 2 crore.

The then registrar clearly said that the consultant had claimed an unimaginable amount. “The claim of Rs 12 crore for research and documentation shocks conscience. The demand of such an unimaginable amount of Rs 35 crore is not in the nature of professional fee payable for a tax consultant/advocate. Similarly, the fee demanded for drafting/filing of appeals, appearances etc, running into crores is not in the nature of professional fee to be paid for professional work, to say the least.”

I-T vs VTU case

Of the Rs 500-crore corpus fund deposited by VTU in various banks in Belagavi, Rs 450 crore was seized by the Income Tax department a few years ago towards tax due and penalty for the same, as the varsity was earning interest from the corpus fund. A case was filed in the high court and the Supreme Court where the judgement was in favour of the IT department. Recently, the appellate tribunal Bengaluru gave a judgement in favour of the VTU.

The Rs 35-cr fee shock

*Drafting and filing of appeals: Rs 5 crore
*Research and documentation: Rs 12 crore
*Conducting of and participation in meetings and conferences: Rs 2 crore
*Preparation and filing of written submissions before Income Tax appellate tribunal, Bengaluru, and Commissioner of Income Tax (Appeals), Belagavi: Rs 10 crore
*Appearances and arguments before tribunal: Rs 4 crore
*Appearnaces and arguments before commissioner: Rs 2 crore