Income Tax Department freezes all its bank accounts
Once a cash rich urban planning body that generated revenue and transferred it to government, the Hyderabad Metropolitan Development Authority (HMDA) stands penniless today with the Income Tax having frozen all its bank accounts.
In fact, the HMDA struggled to pay salaries to its staff this month and after emergency executive meeting and borrowing money from sister organisations, managed to raise the salary funds on Monday.
The IT department froze nearly 30 different bank accounts of the HMDA few days back seeking tax dues to the tune of Rs.550 crore. This amount pertains to funds generated from land auctions during the real estate boom few years ago and handed over to the government.
HMDA’s contention has been that since the funds were generated from land auction and transferred to the government treasury, there was no need to pay IT. But refusing to buy the argument, the IT department has been seeking the dues and even last year, froze the accounts in a similar fashion.
Senior officials of HMDA do not see reason in being asked to shell out these tax dues as the particular amount went into the government treasury. “We have been representing the issue repeatedly and the matter is with the Income Tax Appellate Tribunal (ITAT),” says an official.
With all of its bank accounts frozen, the HMDA functioning has been badly hit. “Our regular transactions too have been affected and different bill payments have been stuck. Bills have to be cleared for remaining works of PVNR Expressway and the works going on at Uppal,” he said.
“We have represented the matter to the union revenue secretary and the outcome from the ITAT also is awaited,” HMDA Commissioner Neerabh Kumar Prasad. The government too was apprised of the situation.