HYDERABAD: The HC on Tuesday issued conditional interim directions to the Hyderabad Metropolitan Water Works and Sewerage Board, asking it to pay IT authorities half assessed income tax at Rs 2 crore a month.
A division bench, comprising justice V.Eshwariah and justice KG Shanker, issued the directions while dealing with a writ petition which questioned attachment of the board’s bank account by the IT department. An earlier writ petition challenging the assessment made by the IT authorities had been dismissed by the court.
While IT department said the water board was liable to pay a tax of `29 cr for assessment year 2003-2004, the board maintained that it was not a profit-making institution and had been running in losses. It receives funds from govt and is, therefore, not bound to pay income tax. It also pleaded that it should be exempted from paying tax and that its application claiming exemption as a charitable institution was pending with authorities.
Earlier, when the petition had come up before it, the bench presided over by chief justice Madan B Lokur wondered whether the board had gone bankrupt and summoned its managing director to be present personally to explain the failure to pay income tax. Board’s managing director Adarsh Sinha appeared before the bench.
In October the board had moved court for stay of demanded tax though IT commissioner asked the board to pay half the demanded amount in monthly instalments of ` 2 crore each.