The Indian Institute of Management, Bangalore, which appealed against slapping of a whopping Rs 3.19 crore income tax by the department, will now pay only 50 per cent of the amount, a top IIMB source said.

“Tax authorities raised a demand for Rs 3.19 crore for the assessment year 2003-04. We have appealed against this and have now been asked to pay 50 per cent of the amount,” Ketoki Basu, Financial Controller, IIMB told PTI today.

Taking into account the returns filed by the B-school for the assessment year 2003-04, the IT department denied exemption under section 10 (23C) (iiiab) of the IT act, 1961, on the grounds that “we (IIMB) are not wholly or substantially financed by the government,” she said.

The IIMB, she said, has filed an appeal against this and “we are also contesting the denial of the benefit under sections 11 to 13 of the Income Tax Act, 1961.” The B-school has also written to the Human Resource Development Minstry (MHRD), for a notification stating it (IIMB) is “wholly or substantially financed by the government,” Basu said.

However, till date the IIMB, has not received any response on the application, she said.