95-year-old hotel director to face trial in tax evasion case

While ordering framing of charges for trial of the hotel and its sole surviving director Jarnail Singh, Additional Chief Metropolitan Magistrate Ajay Gupta has exempted him 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 (willful 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 order.

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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