A spate of income tax notices has prompted the National Mission for Clean Ganga (NMCG), the Centre’s nodal agency responsible for reducing pollution and rejuvenating the Ganga River, to approach the income tax (I-T) department and request a change in the status of its Permanent Account Number (PAN), The Indian Express has learnt. The income tax notices were being sent every year, sources said, because the change in NMCG’s status from an ‘association of persons’ (AOP) to ‘government authority’ was not reflected in its PAN and hence was not picked up by the I-T department’s scrutiny software. The NMCG was initially registered as a society on August 12, 2011, under the Societies Registration Act, 1860. At that time, it had a PAN in the capacity of an AOP. Later, on October 7, 2016, the Centre upgraded it to a ‘government authority’ under the Environment (Protection) Act, 1986. While an AOP is liable to pay tax on its income, a government authority that has no commercial operations is not required to pay income tax. Sources said that this issue was flagged during the meeting of the NMCG’s audit review committee and the budget review committee, which convened last month under the chairmanship of Asok Kumar, director general of NMCG. During the meeting, the executive director of finance (ED(F))at NMCG informed that despite being designated as an authority, its current PAN status remains categorised as an AOP. “Further, NMCG books income to the extent of expenditure reported, which makes it a high-income entity. As a result, NMCG is being picked up regularly by the scrutiny assessment software of Income Tax Department (IT Department) and notices are being received almost every year. Though, IT Department accepts NMCG’s representation during hearings of these notices but every year NMCG has to respond,” a source said. As per the source, NMCG ED (F) Bhaskar Dasgupta proposed to amend NMCG’s PAN to reflect its status as a ‘government authority’, which was approved by the committee. The I-T department conducts an assessment — a preliminary checking of the return of income — under Section 143(1), using software. Section 139A of the Income-tax Act, 1961 has provisions related to the PAN, a 10-digit alphanumeric number issued by the I-T department to any ‘person’ who applies for it or to whom the department allots the number without an application. It enables the department to link all transactions of the ‘person’ with the department. The NMCG, headed by its DG, has the power to issue directions mentioned under Section 5 of the Environment (Protection) Act, 1986. It implements the Centre’s flagship Ganga cleaning programme. The Centre had approved Namami Gange as an umbrella programme for the rejuvenation of Ganga in May 2015. Under Namami Gange, 450 projects worth Rs 38,022.37 crore have been sanctioned and an expenditure of Rs 17,622.05 crore has been incurred till October 31, 2023.
