The income tax department (Mumbai) has recently fined the major company in the oil and refinery sector in India, the state-owned Bharat Petroleum Corporation (BPCL) a penalty of Rs 33 crore for non-payment of proper advance taxes for the financial year of 2006-07. According to the sources from the department, this is the first ever notice to any of the companies in India, issued by the income tax department for advance taxes. The department has stated that the BPCL did pay an advance tax of Rs 275 crore for the fiscal of 2006-07 against a provision of Rs 375 crore made in the published accounts of the company.
According to one of the officials from the income tax department, the BPCL could not pay a properly assessed advance tax and the income tax laws suggest that usually a company should give a proper reasoning as to why it was not in a position to pay the advance tax. The official added that in this case, BPCL did not produce any type of written communication to the department. While commenting on this, the Finance Director in BPCL, Mr. S K Joshi said, "This communication from the I-T department is completely ad hoc. The department has raised the issue without understanding the current oil scenario. We have, however, explained our position to the authorities".
However, I-T officials said that BPCL was the only company defaulting regularly, while other public sector oil companies managed to pay taxes on time. "It causes a great loss to the government as BPCL does not do a proper tax assessment and later paid with interest," said the officer. A legal expert known to the facts has commented that the company was eligible to make an appeal against the move to the I-T commissioner of appeals.
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| Posted : 3/19/2008 |
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