The Dangers Of Not Filing IT Returns

AIADMK chief and Tamil Nadu Chief Minister J Jayalalithaa’s political future is now under a cloud, with the Supreme Court ruling that she would have to face trial for not filing her I-T returns as a partner in a firm.

As partners  i n M/s Sasi Enterprises, a registered firm, Jayalalithaa and her close aide N Sasikala were accused of not filing I-T returns for 1991-92 and 1992-93. They will now be prosecuted for the offence under the I-T Act, which mandates a punishment of not less than six months and a maximum of seven years and a fine.

The trial is to be completed within four months, portending trouble for the CM who is expected to be a key player in the post-2014 political scenario.Any conviction would come right after the elections and may possibly even disqualify her from her seat immediately like Lalu . As per an SC ruling on July 10, 2013, any conviction would immediately disqualify an elected member of a House.

Assistant Commissioner of I-T, Chennai, had in 1997 filed a complaint with the Additional Chief Metropolitan Magistrate (Egmore) against the duo for wilful and deliberate failure to file returns for these years. Jaya and Sasikala filed two discharge applications, but these were dismissed by the lower court. The HC also dismissed their appeals on December 2, 2006.

M/s Sasikala Enterprises was formed as a partnership firm by a deed dated February 6, 1989, with N Sasikala and TV Dinakaran as its partners which was later reconstituted with effect from May 4, 1990, with J Jayalalithaa and N Sasikala as partners. The firm did business through two units, namely M/s Fax Universal and M/s J.S. Plan Printers, which included running motor cars, dealing in vehicles and goods etc.

In the complaint, M/s Sasi Enterprises was shown as the first accused and J Jayalalithaa and N Sasikala were shown as the two other accused. They were stated to be responsible for the day-to-day business of the firm and hence were individually, jointly and severally made responsible and liable for all its activities.

A bench comprising justices KS Radhakrishnan and AK Sikri on Thursday ruled against them. The court said that a mere declaration in individual returns by partners that accounts of the firm had not been finalised and hence no return had been filed by the firm, would not absolve the firm of filing statutory returns.