Tax shadow over ‘Mersal’ star Vijay, I-T panel may take call
, ET Bureau|
Updated: Oct 23, 2017, 12.02 PM IST
Amid the controversy sparked by the movie ‘Mersal’, tax authorities will have to choose when and whether to pull the trigger on its leading man Vijay.
A committee of chief income tax commissioners would soon have to take a call on a compounding application — primarily moved to avoid prosecution — the Tamil star had filed after tax officers had recovered. Rs 3-crore cash in a raid conducted some years ago.
The application is pending with the committee unable to take a decision till now.
“Earlier this year, the committee met but the opinions of the members (on whether to accept Vijay’s compounding application) were divided.
They will have to meet again though there is no deadline. If they choose to, they may even push it back by a few months. A decision on a compounding application is based on material evidence. Ideally, unrelated controversies should not influence the outcome.
The fate of this application is a subject that Vijay cannot afford to ignore. It’s crucial,” a person who is familiar with the case told ET.
The Tamil Diwali release, its hero, and the production house drew the ire of BJP for ridiculing demonetisation and attacking GST. While some of the BJP leaders alleged that the film made a politically motivated attack and misused the freedom of expression, former Union finance minister P Chidambaram and Congress vice-president Rahul Gandhi took to social media to lend their support to the film.
It’s unclear whether the tax committee would prefer the present controversy to die down before taking a stand on the application.
Faced with a raid and tax notice, a person can either move the settlement commission (which has the power to waive interest and penalty on the tax as well as prosecution), or legally challenge the decision of the I-T department; but, if slapped with a prosecution notice, he can file a compounding application, admit the offence, and pay tax and penalty with the hope to close the matter once the application is approved; alternatively, he can contest the prosecution notice in the court of law.
Vijay, having moved the compounding application and paid tax, will be asked to cough up the penalty, but the more critical questions facing the Southern star are: will the committee of commissioners clear his application? Or, will it reject it and pave the way for prosecution proceedings to begin? A spokesperson for the star did not respond to text messages from ET.
“Generally, compounding applications are being allowed only in a handful of cases. In this case, if the offence is not compounded, and the person in question had disclosed the amount as income in his tax return that was filed after the search, he would find it difficult to defend himself,” said senior chartered accountant Dilip Lakhani.
According to a tax official, it is easier to obtain compounding order where the offence is technical in nature but tougher if the charge is “an attempt to conceal income”.
A committee of chief income tax commissioners would soon have to take a call on a compounding application — primarily moved to avoid prosecution — the Tamil star had filed after tax officers had recovered. Rs 3-crore cash in a raid conducted some years ago.
The application is pending with the committee unable to take a decision till now.
“Earlier this year, the committee met but the opinions of the members (on whether to accept Vijay’s compounding application) were divided.
They will have to meet again though there is no deadline. If they choose to, they may even push it back by a few months. A decision on a compounding application is based on material evidence. Ideally, unrelated controversies should not influence the outcome.
The fate of this application is a subject that Vijay cannot afford to ignore. It’s crucial,” a person who is familiar with the case told ET.
The Tamil Diwali release, its hero, and the production house drew the ire of BJP for ridiculing demonetisation and attacking GST. While some of the BJP leaders alleged that the film made a politically motivated attack and misused the freedom of expression, former Union finance minister P Chidambaram and Congress vice-president Rahul Gandhi took to social media to lend their support to the film.
It’s unclear whether the tax committee would prefer the present controversy to die down before taking a stand on the application.
Faced with a raid and tax notice, a person can either move the settlement commission (which has the power to waive interest and penalty on the tax as well as prosecution), or legally challenge the decision of the I-T department; but, if slapped with a prosecution notice, he can file a compounding application, admit the offence, and pay tax and penalty with the hope to close the matter once the application is approved; alternatively, he can contest the prosecution notice in the court of law.
Vijay, having moved the compounding application and paid tax, will be asked to cough up the penalty, but the more critical questions facing the Southern star are: will the committee of commissioners clear his application? Or, will it reject it and pave the way for prosecution proceedings to begin? A spokesperson for the star did not respond to text messages from ET.
“Generally, compounding applications are being allowed only in a handful of cases. In this case, if the offence is not compounded, and the person in question had disclosed the amount as income in his tax return that was filed after the search, he would find it difficult to defend himself,” said senior chartered accountant Dilip Lakhani.
According to a tax official, it is easier to obtain compounding order where the offence is technical in nature but tougher if the charge is “an attempt to conceal income”.
