Kerala Chief Minister Pinarayi Vijayan and Finance Minister Thomas Isaac have hit out against the Income Tax department for their raids on the Kerala Infrastructure Investment Finance Board offices. “If you use the power at the Centre to humiliate us, it would only humiliate you,” said Vijayan, while Thomas claimed that it was hooliganism. KIIFB CEO KM Abraham and I-T Commissioner Manjit Singh got into a verbal altercation during the midnight raids.
The government and the CPM have strongly opposed the move by central agencies to target KIIFB following their probe on the Life Mission project. I-T department is getting into a tussle with KIIFB over the tax reports of contractors funded by the latter to complete developmental projects. On the other hand, Thomas Isaac explains that KIIFB provides loans to companies formed under respective governmental departments, and these companies find contractors for their projects. According to the Finance Minister, KIIFB has no direct deals with the contractors. Reportedly, the Board has handed over Rs 73 Crore similarly for various projects.
While KIIFB claims that the onus is on the companies to pay taxes, the Income Tax department claimed that they have not received the money and thus the Board has to pay the dues. The Kerala government alleges that the midnight check was to dismantle KIIFB using flimsy laws that wouldn’t stand the scrutiny of I-T rules and regulations. KM Abraham informed the inspection team, led by Manjit Singh, to ask the contracting companies to pay the tax money. However, income tax officials retaliated by saying that blocking their investigation can invite one-month jail time. I-T official walked out after a severe blow of words, and the KIIFB is preparing for any legal fallout.
Isaac alleged suspicion over the I-T inspection with the Kerala Assembly elections just weeks away. “I-T department is showing hooliganism. All details were given to them. The Centre intends to defame KIIFB as it is implementing development projects in Kerala. The drama of informing the media in advance must stop,” Isaac said after the inspection began.
The department inspection went on for 10 hours. Reportedly, 15 I-T officials arrived at the KIIFB headquarters on Thursday afternoon and left late at night. The department collected details on the KIIFB’s projects executed in the last five years. KIIFB were asked to hand over details on the financial transactions made to contractors and the tax details on those transactions.
On March 21, the I-T Department has initiated an investigation against KIIFB. The probe agency has issued a notice seeking details regarding KIIFB projects introduced in the last five years. Moreover, in a letter, the Income Tax Additional Commissioner has sought details of the income tax paid by KIIFB for each project funded by KIIFB for the last five years.