Closing the case, Charity Commissioner Amogh Kaloti observed that no further inquiry was required into the transfer of shares under the provisions of the Maharashtra Public Trusts Act.
This comes at a time when the Tata group is witnessing a leadership crisis amid a deepening rift between Tata Sons and its largest shareholder Tata Trusts.
Suresh Patilkhede, who Tata Trusts had called a serial litigator, had approached the Charity Commissioner’s office in June to seek an inquiry into the transfer of 833 shares between NRTT and Naval H Tata. Subsequently, Tata Trusts vice-chairman and a trustee of NRTT Vijay Singh, who was in receipt of a legal notice linked to transfer of 833 equity shares of Tata Sons from NRTT to Naval H Tata, sought an independent probe into the “legality and propriety” of the transaction conducted more than 35 years ago, His note to the commissioner’s office is learnt to have mentioned that Tata Trusts rebutted the illegal share transfer allegations with the approval of trustees including himself, but that an independent probe into the matter without casting aspersions on any individual would bring clarity to the issue that’s in the news.
NRTT is a philanthropic organisation formed in 1974 in the memory of Lady Navajbai Tata, wife of Sir Ratan Tata. Naval H Tata was the father of Ratan Tata, Jimmy Tata and Noel Tata.
To arrive at a decision, the Charity Commissioner’s Office sought a response from Tata Trusts chairman Noel Tata, along with supporting documents on the question of legality of the transfer of the shares. Based on the response, it accepted the explanation that the transfer of shares was necessitated by an external statutory compulsion which threatened the tax-exempt status and corpus of the Trust. The authorities have said that it is not permissible to examine and review in 2026 the decision taken by the trustees in 1988 regarding the existence of necessity for transfer of shares, according to a source.
“Existence of necessity is a question of fact. Therefore, it must be viewed in the context of the facts and circumstances of the relevant time,” the source said, citing the observation of the commissioner’s office.
Explaining the need to transfer the shares, an official pointed out that under the Income Tax (IT) Act, starting April 1983, a public charitable trust could not continue to invest its funds in securities other than those prescribed by the IT Act if it wanted to continue with its tax exemption status. Since NRTT held 833 ordinary shares of the company, which were not securities prescribed under the IT Act, holding of those shares could have taken away the tax exempt status of NRTT.
