Madras HC issues notice to AR Rahman in tax evasion case

The Madras High Court has issued a notice to composer A.R. Rahman in connection to a tax evasion case filed against him by the Income Tax department.

According to T.R. Senthil Kumar, the senior standing counsel for the I-T department, the music composer received an income of Rs 3.47 crore in the financial year 2011-12 for composing exclusive ringtones for a UK-based telecom company, the Indian Express reported. The contract lasted for three years and Rahman asked the company to make the payment directly to his charitable trust, AR Rahman Foundation.

According to a report in The News Minute, the tax department had said that the money was taxable income since the trust did not have permissions to receive foreign contributions, nor was the amount in the form of a donation.

Rahman had moved the Income Tax Appellate Tribunal in Chennai against the I-T order, and the tribunal had then held that the government of India, had accorded “post facto approval” in respect of this contribution. “Therefore, there is nothing on the record suggesting that it is taxable in the hands of the assessee (Rahman),” the court held in September 2019.

The I-T department moved the Madras High Court, challenging the Income Tax Appellate Tribunal’s September 2019 verdict.

Earlier, the Goods and Services Tax (GST) authorities had also issued a notice to Rahman, accusing him of tax evasion and not paying service tax for the permanent transfer of copyrights of his musical works to producers of movies. The Madras High Court stayed the GST notice on February this year.