Lucknow: The Income Tax Department has taken major action against the Maulana Mohammad Ali Johar Trust, associated with former cabinet minister Mohammad Azam Khan, by cancelling the trust’s registration under Section 12AB of the Income Tax Act. According to the department’s order, the cancellation applies to the assessment years 2020-21 to 2023-24, effectively withdrawing the trust’s income tax exemption. The order cites multiple investigation reports, documentary evidence, and witness statements alleging serious financial and regulatory irregularities.
Tax Exemption Cancelled
According to the Income Tax Department, the investigation found that 11 entities shown as donors to the trust allegedly did not exist in reality. The department claims these organisations existed only on paper, while substantial donations were recorded in their names. The order states that details of these alleged fictitious donor entities and supporting documents have been included as part of the investigation record.
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The department has also relied on statements recorded from several individuals associated with the trust. These reportedly include statements of Mohammad Azam Khan, Parvez Miyan, chartered accountant Deepak Goyal, and certain alleged dummy trustees. According to the order, some trustees allegedly stated during the investigation that they had little or no knowledge of the trust’s affairs or were associated only in a formal capacity.
Fake Donor Entities Under Lens
The investigation has also raised questions regarding the construction of the trust’s campus. According to the Departmental Valuation Officer (DVO), the estimated construction cost of 59 buildings within the campus has been assessed at approximately ₹494.46 crore. The Income Tax Department has alleged that this figure does not correspond with the construction expenditure reflected in the trust’s financial statements, prompting a detailed examination of the financial records and expenditure.
The department’s order further refers to reports submitted by the District Panchayat and the Fire Services Department. According to the findings cited in the order, several buildings were allegedly constructed without approved building plans, while mandatory fire safety regulations were reportedly not complied with. These alleged regulatory violations have also been cited as grounds for the action taken against the trust.
₹494 Crore Cost Questioned
The Income Tax Department has additionally alleged that certain contractor firms were involved in diverting funds connected with government schemes towards the construction of the university associated with the trust. The order also refers to observations made in proceedings before the Allahabad High Court and the Supreme Court, mentioning allegations relating to misuse of official position and the utilisation of government resources for the alleged benefit of the private trust.
Following the cancellation of its registration, the Johar Trust will no longer be eligible for income tax exemptions available under the relevant provisions of the Income Tax Act for the specified assessment years. However, the allegations and findings mentioned in the department’s order remain subject to legal proceedings, and the concerned parties retain the right to challenge the action and present their defence before the appropriate judicial forums.
Further Action Possible
The Income Tax Department has stated that the investigation is continuing and that further legal or financial action may be initiated if additional evidence emerges during the course of the proceedings. Investigators are examining financial records, documentary evidence, and other material to determine the full extent of the alleged irregularities.
