In a significant development, the Supreme Court has intervened to stay the ongoing criminal proceedings against DMK MP Kathir Anand initiated by the Income Tax Department. The criminal proceedings were related to the alleged delayed filing of Income Tax returns and tax evasion for the Assessment Year 2013-14. This decision comes after the Madras High Court had refused to quash the proceedings against Anand in July.
A division bench comprising Justice Hrishikesh Roy and Justice Pankaj Mithal issued the stay order while considering an appeal filed by Kathir Anand. The appeal challenged the Madras High Court's decision to not quash the criminal complaint filed by the Income Tax Department against him under Sections 276CC (failure to file a return of income) and 276C(2) (wilful attempt to evade payment of tax) of the Income Tax Act, 1961.
During the Supreme Court proceedings, Senior Advocates S Ganesh and P Wilson, representing Kathir Anand, argued that their client had voluntarily filed the returns for the Assessment Year 2013-14, albeit with a slight delay. They contended that the returns were submitted well before the assessment order dated March 24, 2016, issued by the Income Tax Department.
Moreover, Anand's legal team highlighted that the assessment order of 2016 corresponds to the same self-assessed tax and interest that he had already paid for the late filing of his returns. Despite this, the Income Tax Department granted permission for his prosecution, citing a statutory presumption against him under Section 278E of the Income Tax Act.
The Supreme Court acknowledged the petitioner's argument that there was no intent to evade taxes and that the filed return and the corresponding payable tax with interest were settled before the assessment order. In light of these points, the apex court granted a stay on the proceedings against Anand.
The appeal pertains to the criminal complaint lodged by the Income Tax Department against Anand in 2016 for allegedly failing to file his returns for the Assessment Year 2013-14. Anand submitted his Income Tax Return on March 29, 2015, within the extended period for filing as stipulated by section 139(4) of the Income Tax Act. Subsequently, he paid the tax along with interest on March 14, 2016, after reconciling dues and refunds from the Income Tax Department.
However, despite his prompt actions, the Income Tax Department initiated prosecution against Anand, citing wilful default or evasion of tax. The Supreme Court's stay order provides a temporary respite to Anand and directs the focus toward whether there was an intention to evade tax or not, a matter that will be determined during the trial.
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