Kingfisher
Airlines has got a breather as the Bangalore Bench of the Income Tax
Appellate Tribunal has directed the Income-Tax Department to lift
immediately all attachments, including bank accounts, which were frozen
for non-payment of Rs.349.09 crore tax deducted at source (TDS) by the
company.
However,
the Tribunal, in its interim order, has asked the company to
immediately pay Rs.44 crore of the total outstanding and pay the
remaining amount in weekly instalments of Rs.9 crore each, commencing
from April 4. The Tribunal issued interim directions last week on an
appeal filed by the company challenging the demand made by the
Department in its December 30, 2011, order.
"The
business activities of the assessee [company] are disturbed due to the
attachments of bank accounts. The demand of the Department may be met by
the assessee when it is allowed to run the business smoothly and earn
something from that business. By putting the business of the assessee at
halt through attachment is not a solution," said the Bench, comprising
N. K. Saini (Accountant Member) and George George K (Judicial Member).
The
Department had demanded payment of Rs.372 crore as TDS from the company
for assessment years 2010-11, 2011-12, and 2012-13, following analysis
of records during search conducted in the company's premises. The
Department had attached bank accounts of the company in February, as the
company did not make payment, and had collected Rs.23 crore while
attaching the bank accounts.
The
Department had contended before the Tribunal that the company had
illegally withheld the revenue payable to the government even after
deducting the said amount from various sources in the two years.
However,
the company had contended that the department should have appreciated
it [company] was having acute financial difficulties besides claiming
that it was not given sufficient opportunity of hearing before passing
the final orders for making payment, among other contentions.
The Tribunal, however, has said that the company prima facie has
an arguable case and the balance of convenience also lies in favour of
the company, while noticing a letter written by company's Chairman and
Managing Director to the Department on March 9 proposing to pay the
outstanding tax in eight equal monthly instalments of Rs.44.60 crore.
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