The I-T department’s action came four years after a large number of officers and managers, who retired after April 1, 2003 from Britannia, stopped recieving pensions. Under the provisions of Rule 91 (2) of the Income Tax Rules,1962, a company can under no circumstances withdraw from a pension fund.
This withdrawl has been cited by the pensioners as the prime reason for them being denied pensions. The pensioners had also filed a complaint with the Institute of Chartered Accountants of India (ICAI) against auditors CC Choksi and Co for endorsing a transaction through which Britannia withdrew the money in the financial year 2003-04. The ICAI verdict is awaited.
After the I-T department issued a notice, BIL filed a writ petition challenging the notice in court. Justice Aniruddha Bose had passed the order, dated October 15, 2007, asking Britannia to deposit the amount within a period of four weeks from the date of the order.
BIL, however, appealed against the order. In response to the appeal, Justice Pinaki Ghose and Justice Ashim Kumar Roy passed an order making it clear “that the amount was directed to be deposited by the Hon’ble First Court which has to be given effect to. Such an amount is to be desposited, since the time has already expired, with any nationalised bank within a period of four weeks from the date.”
According to the orders, if BIL does not refund the money, the income tax authorities may even deregister the trust. Britannia, sources say, might appeal against this order in the Supreme Court.
The Calcutta High Court judgment is crucial for BIL pensioners who are slugging it out in court with the company to get their due pensions. Some of these pensioners have passed away.
The company, earlier this year, had given “an ex-gratia” offer to the Britannia Industries Pensioners Welfare Association (PWA) to meet the shortfalls in the proposed pension scheme. This offer, however, was rejected by the PWA members, who areseeking payment through LIC Annuity.