A R Rahman in legal tangle as HC sends notice for tax evasion

The Income Tax Department has moved Madras High Court against a clean chit given to Oscar winning musician A R Rahman by the Income Tax Appellate Tribunal (ITAT) with respect to assessment of his declared income of Rs 15.98 crore in the assessment year 2011-12.

Following this, the court has ordered notice to Rahman. The Principal Commissioner of Income Tax, Chennai has alleged that the composer had diverted money to AR Rahman Foundation and added that the amount could be about Rs 3 crore. In the meantime, the HC has asked the composer to respond to the charges by the Income Tax department.

According to AR Rahman Foundation website, the foundation creates opportunities to everyone-especially the underprivilged- to lead a better life, both mentally and physically, through music, education and leadership building.

The foundation runs under the patronage of AR Rahman and the guidance of his mother, Kareema Begum. The day-to-day operations are overseen by the other trustees, Fatima Rafiq and Khatija Rahman.

Apparently, the Oscar-winning composer signed a 3-year agreement with a US-based company, and he was paid Rs 3 crore for the same. However, AR Rahman asked them to send the said amount to his trust’s account.

This became an issue as all of the trust’s income would be exempted from tax under Section 11 and 13 of the Income Tax Act 1961. Had he received the amount directly to his account, he would have paid the tax, says the senior standing counsel for the income tax department, TR Senthil Kumar