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The National Mission for Clean Ganga (NMCG), a central agency tasked with mitigating pollution in the Ganga River and its tributaries, is currently grappling with significant tax issues. The mission, which was initially registered as a society in 2011 and later upgraded to an authority in 2016, is facing tax demands amounting to Rs 243.74 crore. The NMCG has attributed these challenges to the "faceless assessment process," which it claims has made matters more difficult. This article delves into the details of the NMCG's tax woes and the implications of the faceless assessment process.
The NMCG was established under the Societies Registration Act, 1860, on August 12, 2011. Later, it was upgraded to an authority on October 7, 2016, under the Environment (Protection) Act, 1986. Despite this transition, its Permanent Account Number (PAN) remained categorized as an Association of Persons (AOP), leading to repeated scrutiny by the Income Tax (I-T) department's software. This classification flagged the NMCG as a high-income entity, resulting in numerous tax notices over the years[1][2].
The NMCG has been receiving tax notices annually due to its PAN classification. While notices for the Assessment Years (AY) 2023-24 and 2024-25 have been resolved, two major demands for AY 2022-23 remain pending. The NMCG has contested these orders and is in the process of filing appeals. The faceless assessment process, which was introduced to streamline tax assessments, has been cited as a complicating factor. This process involves assessments being conducted without direct interaction between taxpayers and tax officials, which can lead to misunderstandings and difficulties in resolving disputes[1][2].
To address these challenges, the NMCG has requested the Central Board of Direct Taxes (CBDT) to allow it to revise its income tax returns. An application was submitted on January 15, 2025, seeking permission for this revision. Additionally, the NMCG has applied to extend the notification under Section 10(46) beyond AY 2023-24 to ensure it can claim the appropriate exemptions in future assessments[1][2].
The ongoing tax disputes could potentially impact the NMCG's ability to focus on its core mission: the rejuvenation of the Ganga River. The Namami Gange Programme, under which the NMCG operates, aims to abate pollution, conserve, and rejuvenate the river. This program involves significant investments in infrastructure, including sewage treatment plants and riverfront development. Any diversion of resources to address tax issues could hinder progress in these critical areas[3][4].
The NMCG's struggles with tax notices highlight the complexities faced by government agencies in navigating India's tax system. The faceless assessment process, while intended to streamline tax assessments, has added to the challenges faced by the NMCG. As the mission continues to work towards resolving these issues, it remains crucial for the government to ensure that such bureaucratic hurdles do not impede the progress of vital environmental initiatives like the Namami Gange Programme.
To mitigate similar issues in the future, it may be beneficial for government agencies like the NMCG to ensure that their legal and tax statuses are clearly aligned with their operational roles. This could involve updating PAN classifications to reflect changes in organizational status and engaging proactively with tax authorities to prevent misunderstandings. Additionally, the government could consider providing clearer guidelines on how government authorities should navigate the faceless assessment process to avoid unnecessary complications.
