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.
