Sony pays 50% of I-T dues on HC order

Sony India Ltd Pvt has coughed up 50 per cent of its outstanding income tax dues worth Rs 11.20 crore following a Delhi High Court order, according to sources.

While disposing of the petition, the division bench of justices TS Thakur and B N Chaturvedi had earlier stayed the recovery of the outstanding dues on account of tax and interest amounting to Rs 11.20 crore subject to Sony depositing 50 per cent of the outstanding dues in two equal installments. The two installments were to be paid within four weeks.

Sony had in February challenged the arbitrary exercise of power by the commissioner of income tax (appeals) that had sought to recover the balance outstanding demand of Rs 11.20 crore, including tax of Rs 3.38 crore and interest of Rs 8.69 crore, for assessment year 2002-03 out of the total demand of Rs 24.78 crore.

The company had asked for a stay on the recovery of the balance demand of Rs 11.20 crore till the disposal of the petition on the ground that it would suffer irreparable loss and injury as the authorities had threatened to initiate coercive action for the recovery.

However, I-T counsel Sanjeev Sabharwal had submitted before the court that the company should deposit the entire outstanding dues either in lumpsum or in installments.

While submitting that the company was not at fault, Sony in its petition said that "no court or quasi-judicial authority can take an advantage of its own error to saddle on the company a liability," as it had earlier stayed the recovery on a condition that the company would deposit certain amount in installments.

The company further said that it had filed a return for the previous year relevant to the assessment year 2002-03 declaring an income of Rs 8.67 crore. The assessment, however, had been completed at an income of Rs 59.92 crore, it said.

While referring to a CBDT circular dated April 3, 1982, the company said that the circular was squarely applicable to its case as the I-T determined on assessment was substantially higher than the returned income.

The circular had directed the I-T authorities that where the income determined on assessment was substantially higher than the returned income, the tax collection in dispute should be kept in abeyance till the decision on appeals, provided there was no lapse on the part of the assessee.