IT dept moves Madras HC against AR Rahman over 'tax evasion case'

Chennai, Sep 11: The Madras High Court on Friday issued notice to Oscar-winning music composer AR Rahman with an appeal filed by the Income Tax department in which the agency alleged that Rahman routed a portion over Rs 3 crore, to his charitable organisation.

According to reports, the IT approached the High Court after the proceedings initiated against the music composer by the department was set aside by the Income Tax Appellate Tribunal.

When the case was taken up for hearing by a division bench comprising Justices TS Sivagnanam and V Bhavani, the counsel of the IT department claimed that AR Rahman received an income to the tune of Rs 3.47 crore in the assessment year 2011-12 from UK based telecom company (Lebara Mobile) for composing ringtones, which was directly transferred to the foundation managed by him.

As per the contract, Rahman was to compose exclusive ringtones for the company for a period of three years and IT department claims that Rahman had instructed the company to pay his remuneration directly to his charitable trust.

According to TR Senthil Kumar, senior counsel of the IT department, the income, which is taxable, can be transferred to the trust only after due tax deduction and it cannot be transferred directly to the trust as income to a charitable trust is exempted under the Income Tax Act.

Earlier, Rahman had moved the Income Tax Appellate Tribunal in Chennai against the proceedings initiated against him by the IT department and the tribunal in 2019 had found that "there is nothing on record to suggest that it is taxable income in the hands of the assessee (Rahman)."