I-T slaps ~24,500-cr tax notice on PACL

Demand adds to the ~57,000-crore dues payable from company’s assets on sale

The income tax (I-T) department has raised a massive tax demand of about ~24,500 crore on troubled realty-based investment firm PACL (formerly Pearls Agrotech Corp). The revenue demand pertains to a six-year period, from assessment year 2008-09 to 2014-15.

The I-T department has written to a committee headed by former chief justice R M Lodha to consider this claim “so that the due tax liability of the assessee company can be recovered after the sale/auction of the various properties of M/s PACL Ltd”. The committee has informed the Supreme Court of this tax demand as part of its recent submissions.

These have added substantially to the dues of the company, which already owes ~57,000 crore to about 51.5 million investors. The firm had run into trouble with markets regulator Securities and Exchange Board of India (Sebi) for raising this money without necessary approvals.

This is the second such large demand by the I-T department on a company under Sebi orders. In April, reports said the department had raised a ~24,646-crore demand on the Sahara group’s Aamby Valley, after a special audit.

PACL was allegedly carrying on an investment scheme, though it couched this in the real estate activity of purchase and sale of land parcels across the country. In the process, it had accumulated vast tracts, a large part of this being barren agricultural land. After a legal

The I-T department has written to Lodha committee to consider the claim so that the due tax liability of the assessee can be recovered This is the second large demand by the I-T on a firm under Sebi orders In April, the department had raised a ~24,646-cr demand on the Sahara group’s Aamby Valley, after conducting a

battle that dragged on for about 15 years, Sebi had directed the company to refund ~49,100 crore with interest in August 2014.

A year later, the order was confirmed by the Securities Appellate Tribunal.

Meanwhile, various agencies, including the Central Bureau of Investigation (CBI), Serious Fraud Investigation Office and Enforcement Directorate (ED) have been probing. During one such probe, CBI had seized thousands of property documents belonging to the group.

Following this, in February 2016, the Supreme Court had entrusted the Lodha committee, which includes officials from Sebi, the task of selling various properties belonging to the company and refunding money to the investors.

Though the total dues have thus swelled to over ~80,000 crore, the total value of some 29,000 title deeds handed over by CBI was worth less than a tenth of that value, according to the committee’s estimates.

This has given rise to doubts that a substantial amount of money has been taken out through a maze of subsidiaries and associate companies. The committee told the Supreme Court that it appeared the fund of the investors were not utilised exclusively for purchase of properties, the documents of which are available with the committee.

The Lodha panel has also apprised the court of various complexities it has been facing in the asset sale process over the past year. These include issues with property documents, objections from brokers/other buyers, lack of cooperation from the company and projects which are under construction. The committee has also written to the CBI and ED for further action in the matter.

It has pleaded to the court that PACL be directed to recover money advanced to various entities, including group companies and individuals, and deposit these with the committee within the next 45 days. It has also sought that a sum of ~2,800 crore, with the agents and brokers of PACL, be recovered and deposited with the committee.

PACL should also be directed to pay any consideration it received by sale of properties, the committee has told the court. And, sought the court’s nod for disposing of numerous objections raised against the sale. “All objections based on documents purportedly executed after 02.02.2016 be scrutinized and then heard and disposed of by a retired judicial officer(s) assisted by requisite number of advocates, appointed by the committee,” it proposed.