The Income Tax department moved to harden its hold over Kingfisher Airlines’ finances, rejecting a plea to unfreeze its bank accounts as well as a tax dues re-payment plan.
In a pincer movement, the department rejected a KFA plea to release accounts that it had frozen last week over non-payment of dues. Additionally, it moved a caveat in the Bombay High Court against the airline’s petition to restart access to its accounts. The tax department has asked the court not to pass any orders on the status of the accounts without first hearing the case. It has also rejected a repayment plan by the airline, saying it was inadequate'.
The cash-starved carrier had on Tuesday requested the IT department to allow it to operate its accounts after they were rendered inoperable since Friday.
The tax department’s decision to reject the airline’s plea could spell more trouble ahead for both the carrier and fliers. Already, Kingfisher Airlines has had to cancel scores of flights in the past six days, including 20 on Wednesday, leading to much anguish among stranded passengers, not to mention significant revenue loss for the company.
The airline has directly blamed the seizure of its accounts for the situation it finds itself in. It has claimed that it is unable to pay operating expenses because of the crimp in its banking channel and has therefore been forced to cancel flights.
Kingfisher Airlines had also submitted a plan to the tax department to pay outstanding dues stemming from taxes deducted at source from employees. Last year, it was reported that the airline had been deducting tax from employees’ payrolls but had failed to pass on those tax deductions to the government.
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In a pincer movement, the department rejected a KFA plea to release accounts that it had frozen last week over non-payment of dues. Additionally, it moved a caveat in the Bombay High Court against the airline’s petition to restart access to its accounts. The tax department has asked the court not to pass any orders on the status of the accounts without first hearing the case. It has also rejected a repayment plan by the airline, saying it was inadequate'.
The cash-starved carrier had on Tuesday requested the IT department to allow it to operate its accounts after they were rendered inoperable since Friday.
The tax department’s decision to reject the airline’s plea could spell more trouble ahead for both the carrier and fliers. Already, Kingfisher Airlines has had to cancel scores of flights in the past six days, including 20 on Wednesday, leading to much anguish among stranded passengers, not to mention significant revenue loss for the company.
The airline has directly blamed the seizure of its accounts for the situation it finds itself in. It has claimed that it is unable to pay operating expenses because of the crimp in its banking channel and has therefore been forced to cancel flights.
Kingfisher Airlines had also submitted a plan to the tax department to pay outstanding dues stemming from taxes deducted at source from employees. Last year, it was reported that the airline had been deducting tax from employees’ payrolls but had failed to pass on those tax deductions to the government.
....more info