Chennai: The Madras University has landed in a bizarre crisis. The Income-Tax department has slapped a notice on the cash-strapped varsity demanding tax payment of Rs 68 lakh while labelling it as a ‘private’ university after finding that it has generated more revenue than the grants/aid it got from the Tamil Nadu Government.
It has been a catch-22 situation for the 161-year-old state institution, hailed as the “Mother of all universities” in the southern peninsula, as the government has chopped drastically its grants towards staff salaries, citing violations of norms in the recruitment by earlier administrations. This led to the overall grants/aid from the state government to drop below the revenue it generated through receipt of various fees from students and affiliated institutions.
This has now brought on the I-T bombshell, the notice announcing a whopping Rs 68 lakh tax liability and worse still, the label of ‘private’ university for the world famous teaching and research institution. The I-T department has stated that the Madras University should be treated as a private varsity because the total grant received by it (from the government) was less than 50 per cent of the revenue it generated (from students and affiliated institutions). The university has referred the crisis to taxation and audit experts for help.
“This is a bizarre situation caused by the drastic cut in the grants provided to the university by both the Central and State Governments over the years. The total expenditure jumped to Rs 150 crore after the implementation of the sixth pay commission. The state government must give Rs 56 crore as salary grant, but this was cut down by Rs 20 crore citing violations of previous administrations in appointing the non-teaching staff”, said a university source, adding that the State government has sanctioned only Rs 36 crore to the university.
The university which is in the grip of a financial crisis is currently looking at ways to tide over the situation by increasing affiliation and distance education course fees. It would find this I-T notice a heavy blow on its brittle back, a worried professor said, adding, "This has come as a big shock to us all since all public institutions are exempt from paying income-tax".
Another senior faculty member pointed out that the Annamalai University had appointed faculty members and non-teaching staff "violating all the
rules", yet the state government took it over and gave it a special grant of `250 crore. The government also gave the Anna University a special grant of `100 crore.
“But the Madras University, known as the mother of all universities, is not given any special grant,” said the senior professor, pointing out that if the government made such a special grant for the Madras University, it
would come out of its financial crisis and also wriggle out of the tax notice.
“Our university did not receive even a single paragraph objecting to any of the financial procedures in the local fund audit report in the last two years. The present administration under Vice-Chancellor P.Duraisamy is following all the rules in every aspect. The university must not be punished for past mistakes”, said a senior administrator.
Senior professors contacted by DC urged the State to grant ‘one-time pardon’ for the past violations and thereafter sanction full grant with special financial assistance to the university to assist it out of its current financial crisis....