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Income Tax dept recovers Rs 74 crore from Mumbai corporation for non-payment of dues

This is the first time that the BMC has been served with an IT notice, officials confirmed.

Written by Tanushree Venkatraman | Mumbai |
May 7, 2015 12:05:58 pm
BMC, Mumbai corporation, Mumbai, Income Tax BMC, Income Tax Mumbai, BMC dues, BMC 74 crore The Brihanmumbai Municipal Corporation (BMC) building

After sending three consecutive notices for non-payment of dues, the income tax (IT) department recovered Rs 74,80,58,851 crore from the Brihanmumbai Municipal Corporation (BMC) earlier in the year. The civic body was served an IT notice thrice in 2014 – on May 9, November 25 and December 3 for recovery of dues.

According to documents accessed, civic employees faced technical difficulties in accessing reports sent by the IT department which led to a delay in responding to the department on time. The civic body has also stated that it did not have the bandwidth to investigate the dues pointed by the department in the notice. This led to the department recovering the huge amount from the general funds account of the civic body.


The issue was discussed when a proposal to appoint a Chartered Accountant to look into the issue was presented to the standing committee of BMC. Following the blunder, the civic body has appointed the Singrodiya Goyal and Company at a cost of Rs 27 lakhs per year. The company will now investigate the matter for BMC.

Sanjay Deshmukh, additional municipal commissioner, BMC, said, “The amount to be recovered by IT is still disputed. These are also receipts dating from the financial year 2007-08. With only three clerks in the department, it was difficult to compute the amount mentioned in the notice.” Officials from the finance department also disputed the amount stating that the civic body has paid the dues on time.

This is the first time that the BMC has been served with an IT notice, officials confirmed. The local body has to pay an annual tax on payments made to contractors, employees’ salary etc.

Dhananjay Pisal, NCP corporator and standing committee member said, “Instead of paying the dues on time, the BMC has now lost a huge amount to interests recovered by the IT. There has to be a thorough investigation as to why the dues were not collected on time and BMC should also take action against officials responsible for this mistake. This is public money that has been wasted by BMC.”

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