Failure to file Income Tax return – imprisonment up to seven years – not very harsh? Jayalalitha in trouble
This is not a good season for politicians. We are not bothered. DDT is all about taxes, not politics. There was a time when tax weapon was allegedly used against political opponents. Politicians had to hire good accountants to keep their accounts in order and ready to face a ‘raid’ once they lose power. But inflation and liberalization contributed to a relaxed era where not an eyelid is raised if a politician is found to have a couple of hundred Crores. But sometimes the law does catch up. The income tax department initiated prosecution proceedings against AmmaJayalalitha in May 2004. By a strange coincidence, that was around the time her party badly lost the LokSabha elections. Troubles and taxmen usually come together.
What are the consequences of (wilfully) not filing an Income Tax return? Simply, imprisonment which may extend up to seven years- and not simple imprisonment but rigorous imprisonment. And who is to prove whether the lapse was wilful or not? Normally prosecution should prove mensrea, but not in Income Tax. If the return is not filed, it is deemed as wilful. Draconian?Unfair? Unconstitutional? .Jayalaitha thought so, but the Madras High Court did not. In a classic judgement delivered last Saturday, the High Court dismissed her petition challenging the provisions of the Income Tax Act. The judgement is a treatise on important legal issues like mensrea, presumption, and is a must read for every student of law.
Incidentally do you remember Babu Jagjivan Ram had forgotten to file his income tax returns for 11 years!
We bring you the highlights and the full text of the High Court order today. Please see Jayalalitha v UOI.