Yoga guru Baba Ramdev, it seems, is engaged in some  ‘exercise’ to save one of his trust’s financial health. The Income Tax department has withdrawn charitable status enjoyed by Ramdev’s Divya Yog Mandir Trust, based in hilly Haridwar district of Uttarakhand, to raise a tax liability of more than Rs 58.50 crore. 

The Ramdev’s Trust has lost the case after it challenged the department’s decision to raise the tax demand before an Uttarakhand commissioner of income tax (appeal). 
Now the Trust has gone to the Income Tax Appealate Tribunal (ITAT) in Delhi, seeking cancellation of the commissioner of income tax (appeal) order that agreed with department assessment denying him exemption under the IT Act, available  through the category of providing ‘medical relief’ and ‘education’.

Instead the IT has assessed the trust under the IT Act’s provision of ‘advancement of any other object of general public utility’ in which an organisation becomes liable to pay tax if the business turnover exceeds Rs 10 lakh annually, said an IT official.

An ITAT double bench, comprising IC Sudhir and J Sudhakar Reddy, which first heard the petition on April 3, will take up the matter again on Monday, given Uttarakhand high court’s direction for an early disposal of Ramdev’s case. The IT department had moved the high court on the Tribunal’s  staying of recovery of the tax arrears from the Trust.

For the financial year 2009-2010, the IT sleuths had assessed the Trust income as more than Rs 120.60 crore and culled out the tax liability of Rs 58.50 crore after going through the charitable exercises which the Trust claims it does in the field of ayurvedic medicines, yoga and education.

The Trust expenditure of Rs 106 crore for charitable purposes was broadly clubbed under sub-heads -– Inter-trust donation (Rs 39 cr), Expenditure on medical relief and education (Rs 10 cr) and creating business assets (Rs 57 cr).

Interestingly, the inquiry revealed that Ramdev-held Yogo Shivirs, many of them which have been telecast in the past, were not free.  In one case, a man said that he had paid Rs 49,000 for 5 days non-residential camp which indicated that the trust was charging at the rate of Rs 9,800 per day, tax sleuths probe had revealed.

The main function of the trust is to impart yoga to end sufferings, to cure diseases and to receive a calm state of mind and happiness, besides to establish charitable hospitals for treatment of have-nots, distribute free medicines and carry out research on ayurvedic form of alternative treatment and Vedic literature.

Opposing invoking of advancement of any other object of general public utility clause, the trust had argued before the commissioner appeals that the IT has slapped it so that he could bring to tax all receipts of the trust. 

“He has ventured into the world of make belief, created things which are not there and cast all kinds of aspersions against the assessee in complete defiance of facts on record,” Ramdev counsel had charged.

The commissioner appeals struck down the trust plea that they were engaged in medical relief through yoga citing a Bombay high court judgment in ‘CIT Vs Rajneesh Foundation’ which said that prorogation of yogic system is specifically “For the advancement of other objects of the general public unity like attainment of physical, mental and spiritual health and thus realisation of self-consciousness”.