Tags:
Journalism of Courage
The Nagpur Bench of the Bombay High Court has served a show-cause notice to the sugar unit of the Purti Group as to why it should not be penalised for not paying income-tax.
The notice was issued on an appeal filed by the I-T department against an order of the Income-Tax Tribunal in December upholding a Purti Groups plea against the penalty.
The tax was imposed on the company,which was in news last year for its association with former BJP president Nitin Gadkari,after it agreed to pay dues accrued after revision of returns.
The I-T department has sought to know from HC if the appellate tribunal erred in cancelling the penalty without appreciating that it was imposed after the assessee revised income following action by the department.
The assessee failed to prove reduction in income shown earlier was bona fide, the petition says.
The taxes are for five assessment years beginning 2001-02.
The default was noticed in documents seized during searches at Mehta Group of Industries in Nagpur in 2006. Purti Group claimed to have taken money from Mehta Group for capital expenditure and showed interest paid. The I-T department found the deal suspicious.
The capital cost shown on paper initially by Purti Group was found to be inflated and was revised downward after the I-T department brought it to the notice of the company. This increased income. The tax it attracted was seen as evasion vis-a-vis returns filed earlier and hence the penalty.
