After FCRA suspension, Centre for Policy Research now loses income tax exemption status

New Delhi, July 7

The government has cancelled the Income Tax exemption status of the Centre for Policy Research (CPR), which is led by Congress leader Mani Shankar Aiyar’s daughter Yamini Aiyar, who reacted over the issue saying the think-tank body would seek all avenues of recourse that are available.

The Income Tax Department had issued the order cancelling the tax exemption status to the CPR, a leading public policy research institution, on June 30.

The office of the CPR was surveyed by tax officials on September 7, 2022. On February 27, the Union Ministry of Home Affairs (MHA) had suspended the Foreign Contribution Regulation Act (FCRA) registration of the CPR for 180 days. The registration under the FCRA was to make CPR eligible to receive foreign funding.

The I-T Department issued a show-cause notice to CPR in December 2022 asking why its tax exemption registration under Section 12A of the Income Tax Act should not be cancelled in view of “several irregularities”. It had alleged that the association had made payments to persons who had not filed their personal Income Tax Returns and raised questions over books published by the CPR being commercial in nature.

Meanwhile, after the order was issued by the Income Tax Department, the CPR in a detailed statement said, “On June 30, 2023, the organisation received intimation from the tax department withdrawing its tax exemption status under section 12A of the IT Act, 1961.”

It further said, “The CPR maintains that it is fully compliant with the law and all its collaborations and partnerships are limited to research alone. Since the tax survey began in September 2022, CPR has provided detailed responses to various authorities and fully cooperated with all the proceedings.”

The think-tank also said that in response to the current order withdrawing “our tax exemption status, CPR will be seeking all avenues of recourse that are available”.

“Despite this severe blow that strikes at the core of our ability to function, CPR remains committed to working towards its foundational objective of conducting research that contributes to high-quality scholarship, better policiesand more robust public discourse about the issues that impact life in India,” it said.

A functionary of the think-tank, however, said that since the FCRA registration had been suspended, CPR had to significantly cut down its staff strength by more than half, as earlier there were around 200 employees on CPR’s payroll.

Founded in 1973, CPR, according to its website, is a “non-profit, non-partisan, independent institution dedicated to conducting research that contributes to high-quality scholarship, better policies and a more robust public discourse about the issues that impact life in India”.