Mumbai: BPO firm asked to pay Rs 2.62 crore or face recovery proceedings

Updated: May 16, 2019, 08:18 IST | Vinod Kumar Menon | Mumbai

The accused were summoned for a hearing on Tuesday, but the matter was adjourned for next month, due to non-availability of the Magistrate

The Additional Metropolitan Magistrate, Andheri court had issued summons to Ajit Patel, founder chairman, and Vijay Dalwani, director of the firm, after finding prima facie evidence against them for criminal breach of trust, and forgery. File pic
The Additional Metropolitan Magistrate, Andheri court had issued summons to Ajit Patel, founder chairman, and Vijay Dalwani, director of the firm, after finding prima facie evidence against them for criminal breach of trust, and forgery. File pic

Failure to deposit TDS (Tax Deducted at Source) of over Rs 2.5 crore (for two financial years) allegedly from a former sales director's and few other employees' salaries with the Income Tax Department, has put a company's founder chairman and its director in a fix. The IT department recently issued a notice asking them to pay the same immediately or face recovery proceedings. The accused were summoned for a hearing on Tuesday, but the matter was adjourned for next month, due to non-availability of the Magistrate.

In a criminal case filed by Mahesh Matta (the former sales director), the Additional Metropolitan Magistrate, Andheri court had issued summons to Ajit Patel, founder chairman and Vijay Dalwani, director of M/s Sanda Wellbeing Pvt Ltd, a Mumbai-based BPO firm dealing in herbal products, after finding prima facie evidence against them for criminal breach of trust, and forgery. The court also set aside the C summary report submitted by MIDC police on July 14, 2016, that cited that there is no case being made against the company for forgery, after a petition challenging the police report was argued on behalf of petitioner Matta. "I am of the opinion that no case is made out for grant of C summary. There are sufficient grounds to proceed against the accused for the offence punishable under various sections of IPC and accordingly reject the C summary filed by police and direct summoning the accused," explained advocate Dinesh Tiwari, who represented Matta.

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Income tax dept's notice

In its notice (copies with this paper) dated March 29, 2019 the IT department has asked M/s Sanda Wellbeing Pvt Ltd to pay Rs 2.62 crore for assessment of the year 2012-2013 acting on the complaint by Matta. In its reply to the Income Tax officer (TDS)-2(2) (1), the assessee (company) has given the list of salary and incentives paid to employees during 2011-2012, but details gathered (bank statements) furnished with the grievances petition don't tally with the salary paid. The IT department also found that the assessee has deducted TDS of four employees as per their records, but it should have been deducted as per actual payments made to them. It was seen that the assessee has not correctly deducted income tax. Hence the company was directed to pay the default amount of R1.34 crore under section 201 (1) of the Income Tax Act, and Rs 1.28 crore under section 201 (A) of the Income Tax Act totalling over Rs 2.62 crore immediately, failing which recovery proceedings would begin.

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The other side

Advocate Rajiv Sawant, who represents the company was not reachable. In its reply to the IT department, the company stated, "Mahesh Matta was eligible for fixed salary and variable target based incentives. The incentives were payable only on achievement of sales targets as set by the company." The company said that it came to light in financial year 2012-2013 that sales were not correctly reported by Matta and targeted sales were not achieved. The company also detected major financial and other irregularities on his (Matta) part. It was also found that large amounts were transferred to Matta himself as 'advance for expenses.' Accordingly incentives of R3.72 crore for Financial Year 2012-13 were reversed and corresponding TDS of Rs 1.21 crore on account of Matta was also reversed. However, this reply by the company was not found acceptable by the Income Tax department.

Complainant rubbishes claims

Matta rubbished the submissions made by the company to the IT department. He claimed it abruptly terminated his service after five years and did not pay his full and final emoluments. When asked why he raised the TDS issue with the IT department, Matta said, "It was when I was accessing my 26 (AS) Form online (for TDS deducted) that I found serious lapses. The company had been deducting my TDS but did not deposit it with the IT department and due to this the department had sought clarification from me."

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