'All is not well' with the Patiala improvement trust as the threat of property attachment looms large over the body following its failure to pay pending income tax worth Rs. 12.5 crore.
The trust, which once remained at the forefront for the city's development thanks to its healthy fiscal position, has been currently going through a severe crisis and its functioning has come to a standstill for the past four months.
As per available information, the income tax department, which had sealed the bank accounts of the trust, has now issued show cause notices to it pertaining to attachment of its properties worth Rs. 90 crore, situated in different parts of the city.
"After sealing the bank accounts, income tax department has sought details of the trust's properties and now sent property attachment show cause notices in case trust fails to deposit pending tax at the earliest. Even verbal orders have been conveyed to trust authorities", sources said.
The fresh development has surely come as one of the major problems for trust authorities as they are not in a position to pay pending tax at one go due to the acute financial crisis.
Interestingly, the trust authorities have planned auction of commercial and residential plots worth Rs. 14 crore on February 12 to collect revenue for the purpose.
"With hardly any money in the account, it won't be possible for us to pay the pending IT arrears of such a huge amount. Though we have put some of our commercial and residential plots on auction, it won't be possible for us to collect the payable amount", said one of the senior officials of the improvement trust.
"We have also sent notices to defaulters who owed payments worth crores of rupees to trust and asked them to pay their pending arrears within one month from now", he said.
Interestingly, the trust had generated a huge income after selling different properties under its jurisdiction over the years but failed to deposit tax over the collected income.
Against the calculated tax of around Rs. 20.5 crore, the trust authorities had managed to pay Rs. 8 crore only. They had challenged the remaining amount of Rs. 12.5 due to them before the Income Tax Appellate Tribunal.
The financial liabilities of the trust are estimated to be around Rs. 32 crore, including the income tax arrears. It owes around Rs. 15 crore to different parties which have dragged it to courts in different cases.
On November 12, 2013, six officials of the improvement trust, including an executive officer and the town planner, were suspended for causing loss to the government by releasing seven acres of prime land to private parties, tampering official record and de-notifying extension scheme notified by the state government in 2006.
When contacted, additional executive officer of the trust Raj Kumar Kapoor said senior authorities have been informed about the situation, while talks are still on with the income tax department.
Development projects to be initiated by improvement trust halted
With the sealing of bank accounts of the improvement trust and the body being in a state of disarray, various development projects to be initiated by it have taken a back seat.
"Apart from a minor construction of a wall around their properties to avoid any encroachment, all major projects have been put on hold. Even the pending payments of contractors were stalled due to such circumstances", an official of the trust said.
The trust was to carry out construction of roads, including two-km stretch leading from Badunger Colony to Khalsa college and then the medical college, which is currently in a deplorable situation making it very difficult for commuters to ply vehicles.