By Joseph Maliakan
Though the Supreme Court of India and several High Courts have repeatedly held that freedom of expression under Article 19 (1 ) (a) of the Constitution is a fundamental right and cannot be suppressed the Income Tax department of the Union government does not think so.
In Romesh Thapar vs State of Madras (1950) the Supreme Court had ruled that the press has a significant role to play in informing the public and promoting democratic values.Therefore , any attempt to curtail the freedom of the press would violate the right to freedom of expression.
However, asserting that ” journalism does not serve any public purpose ” the Income Tax authorities on 27 January 2025 refused to extend the philanthropic status to The Reporters ‘ Collective , an association of journalists which has been consistently publishing reports critical of the Union government headed by Narender Modi.
A report ” Inside Modi government’s War Room to Whitewash Global Indices ” published very recently said the Modi government had been lobying to change methodologies to pump up India’s ranking in global indices.
The Repoters’ Collective has been operating in India registered as a non profit from July 2021. The revocation of the non profit status means that the group would no longer be exempt from paying income tax.The group will have to pay tax on all donations it receives . Donors to the group also will not be entitled to tax rebate because the group will be treated as a commercial organisation.
Donations received by organisations registered under section 12 AB of the Income Tax Act is not taken as normal taxable income, and the amount given by donors also gets an exemption in income tax. Now that the IT department has cancelled the non-profit status of the Repoters’ Collective , not only future donations but also past donations too can be taxed.
Under section 115TD accumulations an institution has made before the cancellation can also be taxed . And when registration as a non-profit is cancelled , tax at maximum marginal rate , which can vary between 30 to 42 percent , depending on the income will be levied.
In January 2024 TRC had reported that in 2014 Prime Minister Narendra Modi had tried to hold ” backdoor negotiations with the Finance Commission to cut tax funds allocated to the states ” It also did reports on women’s safety , environmental issues and the ethnic conflict in Manipur.The TRC also carried investigative reports on the Union Government’s Electoral Bonds Scheme and on the murky business operations of the Adani group.
Several opposition leaders have condemned the misuse of the IT department to supress the criticism of the government. Congress leader P.Chidambaram tweeted ” One more building block of freedom was knocked down when the Income Tax Department cancelled non-profit status of The Repoters’ Collective ” Congress MP Randeep Singh Surjewala tweeted ” the facist Modi government is inimical to independent media and hates free press . The pliant, subservient media of today is a poor commentary on the brick by brick designed obliteration of democracy .”Former TMC MP , Jawhar Sircar said the Prime Minister ” unleashed Income Tax hounds to terrorise the media that exposes his corruption and highhandedness”.
In June 2024 the IT department cancelled the tax exemption status of Aman Biradari , an NGO headed by human right activist Harsh Mander and cancelled it’s registration under section 12 AB charitable of the Income Tax Act 1961.
Section 2(15 ) of the Income Tax Act defines ” charitable purpose ” as including ” relief of the poor , education, yoga, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest and advancement of any other object of general public utility.”
Basically seven kinds of activity are considered charitable for availing tax exemption. The first six are per se charitable.The seventh , residual kind , is the advancement of ‘ any other object of public utility.’ It is the residual category that is relevant in the Repoters’ Collective’s case.
The Act does not clarify what is ” general public utility .” It means that the activity has a worthy purpose and an element of public character.It must relate to a sufficiently large section of the public The starting point to decide whether a trust or institution has a charitable purpose is to examine the objectives with which the trust or institution has been set up.
Are the activities to be carried out on a non-profit no loss basis ? Do the activities have a worthy purpose ? Will the activities benefit the public at large? If the answers are in the affirmative , the activities should be considered to be of general public utility .
The TRC’s main objectives are education and other objects of general public utility.Other objectives would be publish news , carry out research , promote and carry out journalism and conduct training and educational activities .These are non-profitable activities since they are conducted on a non-profit , no-loss basis.
Public utility is implicit in philanthro- journalism The primary role of responsible journalism is to build an informed citizenry and act as a ‘ watchdog’ in a democracy . Responsible journalism must be essentially considered as advancing “general public utility.”
However , the Commissioner’s order revoking TRC’s non- profit status nowhere records that the association is undertaking commercial activities for consideration.The Commissioner has very casually denied registration by claiming that journalism does not have public utility.This therefore is a clear case of arbitrary exercise of power without proper application of mind.
On February 10 , the Delhi High Court hearing a writ petition submitted by the Repoters’ Collective challenging the Income Tax Commissioner’s order directed the Income Tax Appellate Tribunal to resolve the issue expeditiously.
