Supreme Court rejects Kingfisher's plea challenging Rs 372 Crore TDS demand

New Delhi: The Supreme Court has dismissed the plea of grounded Kingfisher Airlines Ltd against an order of the Karnataka High Court asking it to pay around Rs 372 crore to the Income Tax department for non-payment of TDS, cut from salaries of its employees. A bench of Justices Ranjan Gogoi and N V Ramana rejected Vijay Mallya-owned airlines' plea against the High Court's order.

The High Court had upheld the assessment order of the IT department for financial years 2010-11, 2011-12 and 2012-13 and that the firm has not paid Tax Deducted at Source (TDS) from the salaries of employees. The apex court said there was no "legal and valid" ground for interference in High court's order and dismissed the appeal of the airlines. It also rejected airlines plea to direct IT department to reconsider facts relating to quantum of TDS payments already remitted.

The IT department had initiated proceedings against airlines in 2011 alleging that the carrier failed to remit the TDS from employees' salaries and other payments with the government.The department had finalized the demands at Rs 372 crore, around Rs 302 crore towards TDS and Rs 70 crore as interest. However, the airlines questioned the IT department's jurisdiction before Income Tax Appellate Tribunal and alleged that it was not heard.

The tribunal quashed the demand orders and remanded the case back to the tax department. Then the IT department filed an appeal before the High Court which quashed tribunal's order and upheld the demands made by it. Before the apex court, the airline also claimed that it has already paid Rs 145 crore out of the total demand.