Demonetisation: Income Tax notice to Catholic Church in Goa kicks up a political controversy

An Income-Tax notice sent to the Archdiocese of Goa last week following the Union government’s decision to withdraw high-value notes earlier this month has created a political stir in the state that is scheduled for Assembly elections early next year. The state Opposition has said that the notice shows the Bharatiya Janata Party’s biased attitude towards minority institutions.

The notice gave the Archdiocese less than a day to furnish, among other information, details of the cash balance, and the number of demonetised notes the Goa Catholic Church and its affiliates held as on November 8, when the government’s demonetisation policy was announced.

The request was dated November 18, which the Archdiocese received on November 21 – the very day it was expected to furnish the details sought. It was made under Section 133 (6) of the Income-Tax Act.

An Archdiocese is the word the Catholic church uses to refer to an area for which an Archbishop, a senior priest, is responsible. All of Goa’s Catholic churches come under the Goa Archdiocese.

Details of cash in hand

Though the Income-Tax notice is one of several sent to trusts and religious bodies in the country following the demonetisation announcement, in Goa, the department has been accused of singling out only the Archdiocese.

“If the government is asking a religious institution to furnish financial details in a day, it reflects on the government’s attitude towards minority institutions,” Congress spokesman Sunil Kawthankar told Scroll.in. “We have seen the attitude in the past as well.”

The notice from the office of the assistant commissioner of Income-Tax (Exemptions), Circle- 1, based in Mangaluru, seeks several details from the Financial Reorganisation Fund of the Archdiocese of Goa.

The notice says a Central Board of Direct Taxes direction seeks urgent information about “cash balances with trust/society/AOP [Association of Persons] etc. Hence, you are required to furnish the details of cash balance held by your trust as well as all institutions and branches etc under your trust as on day 8th November 2016.”

It further sought a “self-attested copy of cash book of all the institutions as on 7th, 8th and 9th of November 2016”, balance as on March 31, and a declaration of the number of Rs 500 and Rs 1,000 notes held by the Fund and its affiliates as on November 8.

Need more time

“The Fund files its returns regularly,” said a church insider with knowledge of the workings of the Archdiocese. “We will comply with all their requests. But we have asked for more time to submit the same as it is not possible to collect and collate the information from over 100 affiliates in a day’s time.”

Meetings have already been called within the Archdiocese to organise the data collection, which will involve all state’s parishes – the small administrative districts into which the Archdiocese is divided.

Catholic churches usually take a cash collection during weekly Sunday services. This money is used for maintenance, charity and other related purposes by the church administration. Following demonetisation, the weekly cash collections have reportedly dropped possibly due to a perceived scarcity of low-denomination notes.

‘Singling Church out’

Local English daily The Goan, questioned why only the Church was picked for the notice. It published a report on Saturday that pointed out that Income-Tax authorities had not asked any of the prominent religious bodies of other faiths in the state to declare cash in hand and cash book entries.

In an editorial on Saturday titled, In Bad Faith, the newspaper asked why the government was not looking at places where black money was traditionally spent.

  “Is there anyone in government to tell us if letters have also been sent to the casino industry, for instance…The onus is now on the I-T department to prove that it is approaching the black money issue with an even hand. It has to show and prove that it is looking in the right places and not using the law as a tool to harass religious institutions”.  

Though reports have also pointed out that Hindu temples in particular have not received any such Income-Tax notice, this is possibly due to the fact that many temples do not come under the Income-Tax Act under which the notice has been served.

On Sunday, Shantaram Naik, a member of Parliament from the Rajya Sabha from Goa, expressed his surprise that the central government was “selectively target[ing]” Goa churches and said that churches in the state should be exempt from Income-Tax just as Hindu temples were.

Following the demonetisation announcement earlier this month, a clutch of firms and individual offices in Goa, including a mining firm, were searched by Income-Tax officials. These raids have been creating a stir in the poll-bound state with supporters of the Opposition parties particularly hard hit.