Hotel Rajdoot director to face trial for tax evasion
New Delhi: The sole surviving director of
South Delhi`s Hotel Rajdoot has been ordered by a city court
to be put on trial for not depositing income tax for five
consecutive years from 1989.
While ordering framing of charges for trial of the
hotel and its 95-year-old director Jarnail Singh, Additional
Chief Metropolitan Magistrate Ajay Gupta has exempted the
director from making personal appearance in the case.
"Let charges be framed against the accused. The
charges are to be framed separately as the default is also
alleged for different years," he said.
The court ordered framing of charges on 16 separate
complaint cases of tax evasion filed by Income Tax authorities
against the hotel near Nizamuddin Railway Station and its
three directors, two of whom are no more.
Gupta said prima facie a case was made out under
section 25 of the Expenditure Act (wilful attempt to evade
tax) read with section 278 (abetment of false return) of IT
Act against the accused persons.
"It is prima facie clear from the submissions of
defence counsel that accused persons have defaulted in paying
of taxes and filing return.
"It is also prima facie clear from these submissions
that accused persons were liable to deposit tax for the years
(1989-1994) which they had deposited along with penalty under
KVSS (Kar Vivadh Samadhan Scheme) in 1998," the court said.
The Income Tax department had said in its complaint
that accused persons were liable to collect the expenditure
tax from their customers and later on it was to be deposited
with the IT department but the accused failed to deposit the
tax collected by them for the five years.
The director, in his defence, said that as per the
1998 KVSS scheme of the Income Tax, granting immunity to tax
defaulters, they had deposited the tax along with the
requisite penalty and they were not liable to be tried.
Brijesh Garg, standing counsel for the IT department,
however, refuted their argument and said the KVSS scheme was
launched in 1998 to give benefits to the tax defaulters
against whom no prosecution was pending but the present
complaints were lodged much before 1998.
He said the immunity was from future prosecution.
"It is clear from the clauses of KVSS scheme that it
gives immunity to the persons against whom prosecution was not
launched and immunity was not provided to the persons against
whom prosecution was already going on," ACMM Gupta noted in
The court also said that the accused was not able to
prove that under KVSS scheme there was any promise on behalf
of complainant (IT department) that after receiving the tax
and penalty the complainant shall withdraw the prosecution
which is pending against the defaulters.
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