I-T department stakes first claim to Kingfisher Airlines' assets

BANGALORE: The income tax department has asserted that its claim over the seized assets of Kingfisher Airlines ( KFA) will have priority over that of other lenders. The company deducted tax at source from employees’ salaries and other payments for many years but failed to remit it to the government . The company owed the I-T department over Rs 350 crore, according to the chief commissioner of income tax, Bangalore.

The department attached all assets of the company and is recovering dues by sale and attachment of its assets and properties. Kingfisher House, Mumbai, is among the properties attached, he added.

He said there have been media reports that a lender consortium of banks led by SBI is laying claim to the property . It is a settled proposition of law that the amount due to the government under any statute and, in this case, under the provisions of the Income Tax Act, 1961, will have priority over other debts and the dues of the income tax department will have to be settled first before the consortium of banks can stake a claim to the property, he added.

The department also said its dues and claims predate that of the banks. It said the company also failed to honour a Karnataka high court directive to pay 50% of the demand raised by it and furnish bank guarantee for the balance amount. A special leave petition has been dismissed by the Supreme Court, it pointed out.