Educational institutes are considered to be the temple of education, knowledge and trust. But what happens, when the temple itself play with the rules to fill its deep pockets. CAG (Comptroller and Auditor General of India) audit has revealed that contrary to this goal, three educational institutions in Delhi, Mumbai and Pune are earning as much as up to Rs. 500 crore a year, and their annual profit ranges between 50% and 84%.
As per the report of CAG, three institutions collected a handsome profit of Rs. 622 crore over the last four years.
"Twenty-two educational institutions accumulated surpluses of Rs. 819 crore ranging from 35% to 84% of their total income. These surpluses were used for creating fixed assets for earning more profit or transferred to other trusts rather than charitable purpose to avoid tax," says CAG.
This report on Friday, has put a big question of I-T department's leniency in allowing these bodies to accumulate such large profits without being taxed and argued that this defeats the concept of the trust.
Report says "three educational institutions- Tatwajnana Vidyapeeth of Mumbai, Ishan Educational Research Society of Delhi and Symbiosis Society Group of Pune- have earned profit ranging between 50% to 84% consistently during their assessment year 2007 and 2011 and accumulated a surplus of Rs 622 crore.
However, the ministry of finance tried to put a cover on the issue by saying that a trust is allowed to accumulate surplus of income up to 15% and that it can be accumulated up to five years."
The auditor, in reply to that statement says "audit has not questioned the legality of the accumulation but pointed our instances of accumulations consistently citing illustration of misuse of such accumulation."