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Firm had challenged an Income Tax dept show cause
notice on why it withdrew such a huge amount from the employees' fund.
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Britannia
Industries (BIL) has been asked by the Calcutta High Court to pay back the Rs
12 crore it allegedly withdrew from the company's
pension fund. BIL had received a show cause notice from the income tax
department to explain the withdrawal in 2003.
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The
directive was challenged by Britannia in the high court. However, the HC
passed an order turning down BIL's appeal. The
company declined to comment when contacted.
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The
commissioner of income tax Kolkata had issued the
notice to the trustees of BIL Covenanted Staff Pension Fund in April 2007.
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The I-T
department's action came four years after a large number of officers and
managers, who retired after April 1, 2003 from Britannia, stopped receiving
pensions. Under the provisions of Rule 91 (2) of the Income Tax Rules, 1962,
a company can under no circumstances withdraw from a pension fund.
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This
withdrawal has been cited by the pensioners as the prime reason for them
being denied pensions. The pensioners had also filed a complaint with the
Institute of Chartered Accountants of India (ICAI) against auditors CC Choksi and Co for endorsing a transaction through which
Britannia withdrew the money in the financial year 2003-04. The ICAI verdict
is awaited.
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After
the I-T department issued a notice, BIL filed a writ petition challenging the
notice in court. Justice Aniruddha Bose had passed
the order, dated October 15, 2007, asking Britannia to deposit the amount
within a period of four weeks from the date of the order.
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BIL,
however, appealed against the order. In response to the appeal, Justice Pinaki Ghose and Justice Ashim Kumar Roy passed an order making it clear that the
amount was directed to be deposited by the Hon'ble First Court
which has to be given effect to. Such an amount is to be deposited, since the
time has already expired, with any nationalised
bank within a period of four weeks from the date.
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According
to the orders, if BIL does not refund the money, the income tax authorities
may even deregister the trust. Britannia, sources say, might appeal against
this order in the Supreme Court.
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The
Calcutta High Court judgment is crucial for BIL pensioners who are slugging
it out in court with the company to get their due pensions. Some of these
pensioners have passed away.
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The
company, earlier this year, had given an ex-gratia
offer to the Britannia Industries Pensioners Welfare Association (PWA) to
meet the shortfalls in the proposed pension scheme. This offer, however, was
rejected by the PWA members, who are seeking payment through LIC Annuity.
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