The Income Tax Department on Friday moved a petition in Madras High Court accusing Oscar-winning music composer A R Rahman of evading tax by allegedly routing revenue via his non-profit organisation, A R Rahman Foundation.
Admitting the attraction, a High Court division bench of Justices T S Sivagnanam and V Bhavani Subbaroyan ordered a discover to be issued to Rahman.
In the petition, the I-T Department has requested whether or not the composer was utilizing A R Rahman Foundation as a “conduit for accounting his personal untaxed revenue, and as a instrument for siphoning his funds”. The petition alleges that Rahman had routed revenue of Rs 3.47 crore via the Foundation, a registered charitable belief that he straight manages.
Money paid to the organisation shouldn’t be taxable, as it’s a charitable belief.
The division moved the courtroom after I-T Tribunal earlier put aside proceedings initiated towards Rahman.
Rahman’s authorized counsels will subsequent reply to the discover in courtroom.
The I-T Department’s counsel, T R Senthil Kumar, instructed the courtroom that Rahman obtained revenue of Rs 3.47 crore in evaluation 12 months 2011-12 in reference to an settlement with UK-based firm Libra Mobiles. The division has acknowledged that Rahman requested the corporate to pay his remuneration on to his basis. His three-year contract with Libra Mobiles constituted composing unique cellphone ringtones.
Arguing that the revenue that was taxable should have been obtained by Rahman himself, Senthil Kumar submitted that Rahman might have transferred the quantity to the belief after deducting revenue tax. But, the counsel submitted, the quantity was routed via A R Rahman Foundation, which was exempted from paying tax beneath the Income Tax Act as a charitable belief.
According to the petition, the I-T Tribunal had “failed” to contemplate the truth that Rahman had obtained the quantity in his particular person capability, and that he didn’t submit these skilled receipts in his revenue tax return for evaluation 12 months 2011-12.
The petition appeals to the courtroom to resolve “whether or not the appellate is correct in legislation in not taking into cognisance that the assessee is the managing trustee of A R Rahman Foundation, and has used the Foundation as a conduit for accounting his personal untaxed revenue and as a instrument for siphoning his funds”.
According to the petition, after receiving the I-T discover Rahman had moved the Income Tax Appellate Tribunal in Chennai. In September 2019, the tribunal held that the Union authorities had accorded “submit facto approval” with respect to this contribution. The Tribunal dominated in favour of Rahman discovering that the quantity was not taxable.
The petition stated the order of the Tribunal is “misguided in legislation” and against info and circumstances of the case. The assessing officer (AO), it acknowledged, had not made any try to look at the assorted clauses of settlement nor tried to make enquiry to determine info. Also, the AO didn’t collect any materials through the course of reassessment proceedings to come back to the identical conclusion arrived at through the unique evaluation.
-With PTI inputs