The Madras High Court in the case of Assistant Commissioner of Income Tax versus Kalanithi Maran wherein set aside the order passed by Income Tax Department in 2014 declaring Kalanithi Maran as the principal officer of the low-cost carrier SpiceJet and making him liable for the alleged tax dues of the company when it was owned by him.
Justice M Duraiswamy has allowed the petition of Kalanithi Maran who is a media baron and the principal officer of Spicejet challenging the 2014 order of Income Tax Department related to various financial years when the company was under his ownership.
During the hearing Advocate appeared at the behest of petitioner contended that he was only the non-executive chairman and not involved in the company’s day-to-day affairs.
The Single bench observed that the department had failed to produce material facts and documents to establish that the said petitioner solely responsible for the day to day affairs of the SpiceJet.
The bench also added that “The main criteria for treating a person as the principal officer is that he should have been in charge of the management, administration and day-to-day affairs of the company.”
Since the petitioner and his company holding 50% in shares and the department also in the absence of any material fact which would establish the said petitioner has the in charge of day to day dealings of business and management of the company leads to a conclusion that he could not be prosecuted for the offences committed by the company.
Finally, the Court quashed the order against Kalanithi Maran over Spice Jet tax allegation.
