SC Seeks Clarification from Tax Department Over Notices to Panel on Property Sealing
- M.R Mishra
- Sep 25, 2024
- 1 min read
The Supreme Court of India's monitoring committee for sealing buildings received an Income Tax notice for allegedly not paying taxes on interest earned from funds that were transferred to the court:
Background
The committee received three notices under Section 133(6) of the Income Tax Act. The notices were in relation to interest earned on funds that were transferred to the court's registry. The committee said that the funds were not income and that they were meant to be transferred to the registry, which invests them in a fixed deposit account.
The Supreme Court has requested a response from the income tax department regarding notices sent to a committee aiding the court in sealing residential properties being used for commercial purposes. The court summoned the concerned tax officer for an explanation and suggested action may be necessary.
A panel led by Bhure Lal, with members Vijay Chhibber and retired Major General Som Jhingon, informed the court that they don’t generate any income. The fees collected for permanent de-sealing are deposited directly with the Supreme Court registry.
The panel argued that the notices issued under Section 133(6) of the Income Tax Act were unwarranted, as the funds they handle aren’t classified as income, but are held under the court’s direction and later transferred to the registry for deposit.
The court is reviewing the matter, having directed the panel to make quarterly deposits of the processing fees, with over ₹3.5 crore already transferred last month. Despite replying to the tax department that it isn’t liable for taxes, the panel received three notices, prompting a request for the court’s intervention.
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