Immunity Plea of top Aditya Birla Exec Rejected
The Income Tax Settlement Commission (ITSC) has rejected a plea for immunity of prosecution of Income Tax Department of a top executive of the Aditya Birla group following the discovery of Rs 25 crore unaccounted cash during a raid conducted by the Central Bureau of Investigation (CBI) and the Income Tax Department in October 2013.The Settlement Commission is part of the government's Revenue Department and is a platform to resolve tax disputes.
The Group Executive President of the Aditya Birla Group, Shubhendu Amitabh, had approached the Settlement Commission for grant of immunity and payment of one-time taxes but the Commission in its ruling last month said his declaration contained “incomplete facts”.
The Indian Express has reported that after receiving the petition, the Settlement Commission had approached them. The Commission was then informed that the declaration made by the executive was incomplete and did not present the complete picture of matters which are currently under scrutiny of the tax department.
“Now that the Settlement Commission has rejected the plea of the ABMCL official, our taxation matter will proceed on course. We are currently awaiting a reply to the notice we sent to the company for filing their complete tax returns for the relevant years,” a CBDT official said.
In October 2013, the Income-Tax Department had unearthed Rs 25 crore in cash at a corporate office of the Aditya Birla Group in New Delhi. The search by the tax authorities closely followed the first information report filed by CBI against Hindalco — the investigative agency had controversially named former coal secretary PC Parakh and Kumar Mangalam Birla, AB Group's chairman, as accused —in the coal scam.
Tax department sleuths are said to have shown up at the premises of the Aditya Birla Group following a tip-off by the CBI's search team.
Initially, the I-T department had asked Hindalco to account for the Rs 25 crore in cash. But upon discovering that the money was actually seized from the premises of ABMCL and not Hindalco, the investigation focused on the former, which is a group-level think tank.
Following the raids, the Aditya Birla group had issued a statement, which said that they were “taken aback” by the discovery of cash at one of its offices and that they have taken a “very serious view” of the matter.
An amount of Rs 25 crore cash was recovered from the ABMCL office in October 2013 shortly after the CBI filed an FIR against Hindalco in the coal blocks allocation case. The tax sleuths had also recovered documents and diaries which listed partly coded receipts of payments which had not been declared to tax authorities. The Rs 25 crore recovered in cash was also part of the listed payments taking the estimated undeclared income computed by the tax authorities to around Rs 150 crore.
Interestingly, the rejection from the Settlement Commission comes at a time when the CBDT has been granted permission from the Supreme Court for getting access to the second set of “Birla diaries” which were recovered by the Income Tax during the same raids. CBDT officials said only last week they scrutinised the diaries which list payments made during.