MUMBAI: Biscuit major Britannia Industries is understood to have deposited the money it withdrew from the company’s pension fund sometime in 2004 as a fixed deposit (FD) in a nationalised bank as directed by the divisional bench of the Calcutta High Court.

This was consequent to a notice by the commissioner of Income Tax-III, Kolkata, to the trustees of the fund. It is learnt that the company has deposited the funds on January 14, 2008, with the Andhra Bank in Bangalore.

When contacted, Britannia officials said: “Britannia has not refunded any money to the trust. No further comments as the matter is subjudice.”

The reply, which does not deny that the money has been deposited in the bank, reflects the company’s tough stand on the issue. Britannia had withdrawn Rs 12.11 crore from the company’s pension fund in 2003-04, despite fund rules, and Rule 91 (2) of the Income-Tax Rules prohibiting any refund, terming the withdrawal as ‘excess contributions’ incorrectly made in earlier years (from 1994-95 onwards) to the covenanted staff pension fund, professing that it was beyond 15% limit laid down in IT Rules on January 14, 2008.

A subsequent SLP was heard by the Supreme Court in the first week of February on the above matter. Fali Nariman, on behalf of the petitioners, requested for an interim stay on the order of the Calcutta High Court division bench, which was overruled.

The Pensioners Welfare Association representative Ashit Sarkar (who was earlier a trustee and HR vice-president at Britannia) said: “Our repeated reminders from 2004 to the income-tax commissioner and to CBDT later in 2006 finally resulted in this 2007 notice being issued.”

He said that the 15% limit for ordinary contributions refers to permitted ‘deductions for computing taxable income’ under the IT Act Sec 36(1)(iv), and there is no bar for making additional contributions to the fund in the IT Act, but which is likely to be treated as ‘disallowed expenditure’ by ITO and be taxable.

However, the pension payments as per fund rules are yet to be released to about 70 officers and managers who retired after March 2003, and are not getting any pension at all, as also the due pension adjustments to all eligible pensioners — about 270 in number — as per terms of service from April 2004, and next instalment from April 2007.

Pensioners claim that almost five years of accumulated amounts have been withheld by the Trustees.

Meanwhile, ICAI disciplinary committee which completed the hearings on the Britannia pensioners vs CC Chokshi case nearly a year ago have yet to announce the findings.

The pensioners had filed a complaint with ICAI accusing CC Chokshi firm of not opposing Britannia’s withdrawal of the funds in violation of the Pension Fund Rules, Indian Trusts Act and I-T norms.