International Development News
Development News Edition

I-T notices to Aircel, Dishnet Wireless stayed by HC

I-T notices to Aircel, Dishnet Wireless stayed by HC

The Madras High Court on Wednesday kept in abeyance the notices issued by the Income Tax department to Dishnet Wireless Ltd and Aircel Ltd of Aircel for payment of Rs 32.24 crore and Rs 7.54 crore respectively for the year 2010-11 towards non-deduction of TDS on the payment of foreign remittances.

Hearing petitions from the two Chennai-based group companies, Justice T Raja directed the I-T department to keep in abeyance the March 31 proceedings consequent to the demand notices issued on March 2 till the disposal of their applications for bankruptcy pending before the National Company Law Tribunal (NCLT) bench.

He issued the interim order after going through the affidavits filed by Aircel and Dishnet and the counter by the Assistant Commissioner of Income Tax, International Taxation.

The two companies submitted that they were involved in cellular mobile services and the I-T department served notice on them under section 201(1) and 201(A)of the Income Tax Act for alleged failure to deduct TDS (tax deducted at source) on certain foreign remittances.

Even though they sought time to comply with the notice in view of their applications for bankruptcy pending before the NCLT bench, the I-T department initiated further proceedings on March 31, the petitioners said.

Noting that they have filed the applications under Section 10 of the IBC (Insolvency and Bankruptcy Code) seeking initiation of Corporate Insolvency Resolution Process (CIRP), the two group companies said the NCLT had granted a moratorium.

Also, following the bankruptcy proceedings, their employees were leaving the companies and more time was needed to comply with the notice, they said adding this was also intimated to the I-T department.

Besides, the companies contended that the I-T department by its July 19, 2010 order had authorised them to make payments outside India without deduction of tax at source under section 195 of the Income Tax Act.

Based on this only, the remittance of foreign payments were made without TDS.

Also, the transaction between the companies and the non-resident operators was one of sales transfer and involved no element of fee for technical services or royalty. It cannot be considered an income on which tax to be deducted at source, they contended.

They claimed that the I-T department without considering these facts and without affording an opportunity of hearing had proceeded in a hasty manner, adding the demand notices were liable to be set aside.

In his order, the judge referred to judgements of the Delhi High Court and the Supreme Court and said once moratorium was granted by the NCLT, it would continue till the completion of the insolvency process or until it approves the resolution or order passed for liquidation as the case may be.

He directed the I-T authorities to keep the impugned proceedings arising out of the demand notice in abeyance till the disposal of the matter pending before NCLT.

Aircel filed for bankruptcy protection from creditors, saying high debt and mounting losses, following a price war triggered by a new entrant, have led it to troubled times.

(With inputs from agencies.)



'No escape from telephones', this 1953 prediction actually comes true

In 1953, a telephone company chief predicted that therell be no escape from telephones in the future....

With Ayodhya verdict, CJI starts clearing high profile pending cases

Ending all the speculations, the Chief Justice of India Mr. Ranjan Gogoi who is due to retire on November 17 decided to deliver the verdict in Ayodya dispute at 10.30 am on Saturday which is not a working day for the Supreme Court. This is ...

How partnerships and collaborations could enhance teacher training

Monica Malhotra Kandhari, Managing Director, MBD Group shares her views on public private partnership and collaborations in education sector. She supports her propositions with her organisations success stories....

Fixed Test centers would facelift level of WTC in India

The venues for the test matches in India should be fixed so that World Test Championship matches remain fair....


Latest News

Odisha CM seeks National Maritime Heritage Festival status for

Chief Minister Naveen Patnaik on Wednesday urged the Centre to accord the status of a National Maritime Heritage Festival to Odishas Bali Jatra festival. Patnaik in a letter to Union Tourism and Culture Minister Prahalad Singh Patel said ....

SC to pronounce verdict in Rafale review petitions tomorrow

The Supreme Court will tomorrow pronounce its judgment on a batch of petitions seeking review of its 2018 order which gave clean chit to Narendra Modi-led government on a plea seeking investigation into alleged irregularities in the procure...

Mineral capable of preserving life's signatures found on Mars: Study

Researchers, using data from NASAs Mars Reconnaissance Orbiter, have found deposits of hydrated silica -- a mineral good at preserving chemical signatures of life -- in a crater on the Red Planet where the US space organisation plans to lan...

May extend odd-even scheme if required: Kejriwal

As pollution levels in the national capital hovered close to emergency levels, Delhi Chief Minister Arvind Kejriwal on Wednesday said the odd-even scheme could be extended, if the need arises. The road rationing scheme started on November 4...

Give Feedback