I-T Dept files case against Kingfisher for not remitting TDS amount

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Special court for economic offences issues summons to Mallya

Financial crisis hit Kingfisher Airlines Ltd and its head Vijay Mallya are in deeper trouble. The Special Court for Economic Offences, Bangalore, on Wednesday ordered the issue of summons to Mallya on a criminal case filed by the Income-Tax Department for not remitting tax deducted at source (TDS) to the Government.

The Special Court took cognisance of the offence under Section 276B and 278B of the I-T Act, 1962 for not remitting Rs 74.94 crore, deducted by the company as TDS from the salaries of its employees for financial year 2009-10, and the interest of Rs 23.70 crore levied for not remitting the amount within the period stipulated in the law. The next hearing of the case will be on April 19.

If found guilty for failing to remit the TDS amount to the government, the representative of the company ( Mallya) can be punished with rigorous imprisonment for a minimum of three months to a maximum of seven years.

Presenting the case, the Department’s counsel Jeevan N contended before the Court that the conduct of the company and Mallya, its Chairman and Managing Director, cannot be excused. They are not permitted to use the amount deducted in the form of TDS as this money belongs to the Union Government and the company is only authorised to deduct it from the employees’ salaries on behalf of the Government.

“It is not the tax liability of the company but amounts to withholding money belonging to the Government. No account of helplessness or financial difficulty can come to the aid of the company to withhold the TDS amount. The company cannot make use of TDS amount for any purpose,” the Department stated in the complaint.

Meanwhile, the Department also stated in the complaint that the company has to give the Government Rs 401 crore — the TDS amount deducted from salaries and from payments made to various others for financial years 2008 to 2012.

It was pointed out in the complaint that the company did not respond to many of the Department’s communications demanding payment and, on certain occasions, the company had raised objections to the TDS dues being assessed at Rs 401 crore. The TDS assessments were made after the company premises were raided in March 2011.

During the proceedings before the Income-Tax Appellate Tribunal and the Karnataka High Court regarding the dispute over the TDS assessment, it was alleged in the complaint that the company did not remit the amount even after the High Court, in a December 5, 2012 order, directed it to pay 50 per cent of the total amount outstanding and to give a bank guarantee within six weeks for the remaining 50 per cent amount.

(This article was published on February 20, 2013)
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Budget 2015 highlights

  • Following are the highlights of the Union Budget 2015-16 presented by Finance Minister Arun Jaitley in Parliament today:
  • No change in personal Income Tax * Health Insurance Premium deduction hiked from Rs 15,000 to Rs 25,000; for senior citizens to Rs 30,000
  • Transport allowance exemption hiked to Rs 1,600, from Rs 800 per month
  • Additional 2% surcharge on people earning over Rs 1 cr; to fetch Rs 9,000 cr
  • Wealth tax abolished
  • Direct Taxes Code (DTC) dropped
  • Rs 50,000 deduction for contribution to New Pension Scheme
  • To lower Corporate Tax to 25% over next four years
  • GAAR implementation deferred by 2 years to April 2017
  • Service Tax rate hiked to 14%, from 12.36%
  • Tax free bonds for roads, railways, irrigation projects
  • 2015—16 growth between 8—8.5%, double digit growth feasible
  • Retail inflation close to 5% by March, room for monetary policy easing
  • To achieve fiscal deficit of 3% of GDP by 2017—18
  • Fiscal Deficit target 3.9% in 2015—16, 3.5% in 2016—17
  • Revenue Deficit to be 2.8% in 2015—16
  • Current Account Deficit for 2014—15 to be below 1.3% of GDP
  • To introduce comprehensive law to deal with black money
  • Benami property transaction bill to tackle black money transaction in real estate soon
  • 100% deduction for contribution to Swachh Bharat, Clean Ganga projects
  • GST to be put in place by April 1, 2016
  • Internationally competitive direct tax regime to be put in place to incentivise saving
  • Incentivise use of credit, debit cards; disincentivise cash transaction to curb black money.
  • The Finance Minister has covered good ground, but more needs to be done »

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