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Exemptions to Charitable Trusts and Institutions Ministry of Finance (Department of Revenue) Public Accounts Committee (2018-19)

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Exemptions to Charitable Trusts and Institutions Ministry of Finance (Department of Revenue) Public Accounts Committee (2018-19) 1 104 EXEMPTIONS TO CHARITABLE TRUSTS AND INSTITUTIONS [Action Taken by the Government on the Observations/Recommendations of the Committee contained in their 27th Report (16th Lok Sabha)] MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) PUBLIC ACCOUNTS COMMITTEE (2018-19) ONE HUNDRED AND FOURTH REPORT SIXTEENTH LOK SABHA LOK SABHA SECRETARIAT NEW DELHI 2 PAC NO. 2138 ONE HUNDRED AND FOURTH REPORT PUBLIC ACCOUNTS COMMITTEE (2018-19) (SIXTEENTH LOK SABHA) EXEMPTIONS TO CHARITABLE TRUSTS AND INSTITUTIONS [Action Taken by the Government on the Observations/Recommendations of the Committee contained in their 27th Report (16th Lok Sabha)] MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Presented to Lok Sabha on: ………….…… Laid in Rajya Sabha on: ………………. LOK SABHA SECRETARIAT N E W D E L H I July, 2018 /Ashadha, 1940 (Saka) 3 CONTENTS PAGE COMPOSITION OF THE PUBLIC ACCOUNTS (iii) COMMITTEE (2017-18) COMPOSITION OF THE SUB COMMITTEE - III OF PUBLIC (iv) ACCOUNTS COMMITTEE (2017-18) COMPOSITION OF THE PUBLIC ACCOUNTS COMMITTEE (v) (2018-19) INTRODUCTION ……………………………... …………………….. (vi) CHAPTER I Report ………………………………………………. 1 CHAPTER II* Observations/Recommendations which have been accepted by the Government …………………….. CHAPTER III* Observations/Recommendations which the Committee do not desire to pursue in view of the replies received from the Government ..………….. CHAPTER IV* Observations/Recommendations in respect of which replies of the Government have not been accepted by the Committee and which require reiteration ……………………………………………. CHAPTER V* Observations/Recommendations in respect of which the Government have furnished interim replies ………………………………………………… APPENDICES* I Minutes of the 8th sitting of the Sub-Committee III of Public Accounts Committee (2016-17) held on 16th February, 2017. II Minutes of the 4th sitting of the Sub-Committee III of Public Accounts Committee (2017-18) held on 29th August, 2017. III Minutes of the 15th sitting of the Sub-Committee III of Public Accounts Committee (2017-18) held on 13th March, 2018. IV Minutes of the 17th sitting of the Sub-Committee III of Public Accounts Committee (2017-18) held on 2nd April, 2018. V Minutes of the 23rd sitting of the Public Accounts Committee (2017-18) held on 10th April, 2018. VI Minutes of the 8th sitting of the Public Accounts Committee (2018-19) held on 4th July, 2018. 4 VII Analysis of the Action Taken by the Government on the Observations/Recommendations of the Public Accounts Committee contained in their Twenty- seventh Report (Sixteenth Lok Sabha) *Not appended to the cyclostyled copy of the Report 5 COMPOSITION OF THE PUBLIC ACCOUNTS COMMITTEE (2017-18) Shri Mallikarjun Kharge - Chairperson MEMBERS LOK SABHA 2. Shri Sudip Bandyopadhyay 3. Shri Subhash Chandra Baheria 4. Shri Prem Singh Chandumajra 5. Shri Nishikant Dubey 6. Shri Gajanan Chandrakant Kirtikar 7. Shri Bhartruhari Mahtab 8. Smt. Riti Pathak 9. Vacant1 10. Shri Abhishek Singh 11. Prof. Ram Shanker 12. Dr. Kirit Somaiya 13. Shri Anurag Singh Thakur 14. Shri Shivkumar C. Udasi 15. Dr. P. Venugopal RAJYA SABHA 16. Vacant2 17. Vacant3 18. Shri Bhubaneswar Kalita 19. Shri Mohd. Ali Khan4 20. Shri Sukhendu Sekhar Roy5 21. Vacant6 22. Vacant7 1 Shri Neiphiu Rioh Ceased to be a Member of Committee consequent upon acceptance of his resignation from Lok Sabha w.e.f. 22 February, 2018. 2 Shri Naresh Agrawal ceased to be a Member of Committee consequent upon his retirement from Rajya Sabha on 2 April, 2018 3 Shri Satyavrat Chaturvedi ceased to be a Member of Committee consequent upon his retirement from Rajya Sabha on 2 April, 2018 4 Elected w.e.f. 29 December, 2017 in lieu of vacancy caused due to retirement of Shri Shantaram Naik. 5 ceased to be a Member of Committee consequent upon his retirement from Rajya Sabha on 18 August, 2017 and re-elected w.e.f. 29 December, 2017. 6 Shri Ajay Sancheti ceased to be a Member of Committee consequent upon his retirement from Rajya Sabha on 2 April, 2018 7 Shri Bhupender Yadav ceased to be a Member of Committee consequent upon his retirement from Rajya Sabha on 3 April, 2018 6 Sub-Committee – III (Direct and Indirect Taxes) Convenor : 1. Shri Nishikant Dubey Alternate Convenor : 2. Shri Satyavrat Chaturvedi Members : 3. Shri Shivkumar C. Udasi 4. Shri Bhupender Yadav 5. Shri Sukhendu Sekhar Roy 6. Shri Ajay Sancheti 7 COMPOSITION OF THE PUBLIC ACCOUNTS COMMITTEE (2018-19) Shri Mallikarjun Kharge - Chairperson MEMBERS LOK SABHA 2. Shri Subhash Chandra Baheria 3. Shri Sudip Bandyopadhyay 4. Shri Prem Singh Chandumajra 5. Shri Gajanan Chandrakant Kirtikar 6. Shri Bhartruhari Mahtab 7. Smt. Riti Pathak 8. Shri Ramesh Pokhriyal “Nishank” 9. Shri Janardan Singh Sigriwal 10. Shri Abhishek Singh 11. Shri Gopal Shetty 12. Dr. Kirit Somaiya 13. Shri Anurag Singh Thakur 14. Shri Shivkumar Chanabasappa Udasi 15. Dr. Ponnusamy Venugopal RAJYA SABHA 16. Prof. M. V. Rajeev Gowda 17. Shri Bhubaneswar Kalita 18. Shri Shwait Malik 19. Shri Narayan Lal Panchariya 20. Shri Sukhendu Sekhar Roy 21. Vacant 22. Vacant SECRETARIAT 1. Shri A.K. Singh - Additional Secretary 2. Shri T. JayaKumar - Director 3. Smt. Anju Kukreja - Under Secretary 8 INTRODUCTION I, the Chairperson, Public Accounts Committee (2018-19), having been authorised by the Committee, do present this One hundred and fourth Report (Sixteenth Lok Sabha) on Action Taken by the Government on the Observations/Recommendations of the Committee contained in their Twenty-seventh Report (Sixteenth Lok Sabha) on “Exemptions to Charitable Trusts and Institutions" relating to Ministry of Finance (Department of Revenue). 2. The Twenty-Seventh Report was presented to Lok Sabha/laid in Rajya Sabha on 16th December, 2015. Replies of the Government to all the Observations/Recommendations contained in the Report were received. The Sub-Committee III of PAC (2016-17) took oral evidence of the representatives of the Ministry of Finance (Department of Revenue) on non- submission of Action Taken Notes on the aforesaid Report on 16th February, 2017. The Sub- Committee III (Direct and Indirect Taxes) for the year (2017-18) also took oral evidence of the representatives of the Ministry of Finance (Department of Revenue) on the subject on 29th August, 2017 and 13th March, 2018. The Sub-Committee considered and adopted the draft Action Taken Report on the subject at their sitting held on 2nd April, 2018. The Report was also considered and adopted by the Public Accounts Committee (2017-18) during their sitting held on 10th April, 2018. As the Report could not be presented to the Parliament during the last tenure of the Committee (2017-18), the Report was considered again and adopted by the Public Accounts Committee (2018-19) during their sitting held on 4th July, 2018. Minutes of the sittings form Appendices to the Report. 3. For facility of reference and convenience, the Observations and Recommendations of the Committee have been printed in thick type in the body of the Report. 4. The Committee place on record their appreciation of the assistance rendered to them in the examination by the Office of the Comptroller and Auditor General of India. 5. An analysis of the action taken by the Government on the Observations/ Recommendations contained in the Twenty-seventh Report (Sixteenth Lok Sabha) is given at Appendix-VI. NEW DELHI; MALLIKARJUN KHARGE 18 July, 2018 Chairperson, 27 Ashadha, 1940 (Saka) Public Accounts Committee 9 REPORT PART – I This Report of the Committee deals with the Action Taken by the Government on the Observations and Recommendations contained in their 27th Report (16th Lok Sabha) on the subject "Exemptions to Charitable Trusts and Institutions" based on C&AG Report No. 20 of 2013, Union Government (Performance Audit) relating to the Ministry of Finance (Department of Revenue). 2. In their 27th Report (16th Lok Sabha) which was presented to the Lok Sabha on 16th December, 2015, the Committee had dealt with the various issues such as lapses in registration process, allowance of exemptions during assessment, non-monitoring of accumulations of surplus income and Foreign Contributions (FCs) received, inconsistencies in the Act which apparently led to incorrect assessment and non-levy of taxes, irregular exemption to Trusts which were not charitable in nature etc. 3. The 27th Report contains 23 observations/recommendations. The Action Taken Notes in respect of all the 23 observations/recommendations have been received from the Ministry of Finance (Department of Revenue) and these have been categorized as follows: (i) Observations/Recommendations of the Committee which have been accepted by the Government: Para Nos. 1, 2, 3, 4, 5, 8, 9, 14,16,17,19,20,21,22 & 23 Total: 15 Chapter - II (ii) Observations/Recommendations which the Committee do not desire to pursue in view of the replies received from the Government: Para Nos. 11,12 & 13 Total: 03 Chapter - III (iii) Observations/Recommendations in respect of which replies of the Government have not been accepted by the Committee and which require reiteration: Para Nos. NIL 10 Total: NIL Chapter – IV (iv) Observations/Recommendations in respect of which Government have furnished interim replies: Para Nos. 6,7,10,15 &18 Total: 05 Chapter –V 4. The Committee desire that Government should furnish final/conclusive action taken replies to the recommendations for which interim replies have been furnished. 5. The Action Taken Notes furnished by the Ministry of Finance (Department of Revenue) have been reproduced in the relevant chapters of this Report. In the succeeding Paragraphs, the Committee will deal with the action taken by the Government on some of their Observations/Recommendations made in the original Report, which need reiteration or merit comments: A. Delay in submission of Action Taken Notes 6. The 27th Report (16th Lok Sabha) of the Public Accounts Committee was presented to Lok Sabha/laid in Rajya Sabha on 16th December, 2015. As per procedure, the Ministry of Finance (Department of Revenue) was required to furnish the Action Taken Notes duly vetted by Audit on the observations and recommendations as contained in the Report within a period of six months from the presentation of Report to Parliament i.e.
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