Karnataka businessman held, jailed for income tax default

Bengaluru, Feb 16 : A Karnataka-based businessman has been jailed for six months for allegedly not filing his income tax arrears and interest of around Rs 7.35 crore despite reminders, an official said on Saturday.

"The defaulter was arrested on Friday for failing to pay his tax arrears and produced before the Tax Recovery Officer (TRO) from where he was sent to jail for a tenure of six months," said the department in a statement here.

The official, however, did not disclose the defaulter's identity and nature of his business, except that he is from Tumakuru, 70 km northwest from here.

Though the defaulter was given many opportunities to pay the arrears, he missed them and failed to appear before the TRO on 17 occasions to explain reasons for defaulting.

"The defaulter appeared before the TRO in response to a notice on October 3, 2018, as to why a warrant to arrest him should not be issued.

But he did not explain why he could not pay the dues," said the statement.

The defaulter again appeared before the TRO on January 3 in response to a second notice issued on December 19 and assured the latter that he would remit the dues on receiving money from an unnamed debtor.

"Inquiry by the TRO revealed that although the defaulter received Rs 1 crore from his debtor before January 3, he did not pay the dues even partly.

Instead, he dishonestly utilised it for other purposes," said the statement.

The defaulter on February 14 admitted to the TRO in a statement that he did not pay taxes despite receiving Rs 1 crore from his debtor.

"The businessman violated provisions of Section 222 of the Income Tax Act, 1961, and Rule 73(a) and 73(b) of the Schedule II," said the statement.

As the TRO considered no more inquiry was necessary under Rule 75 of the Second Schedule, the defaulter was arrested and produced before the TRO-7.

"The TRO-7 committed the defaulter to civil prison on Friday for six months after he failed to arrange for paying the tax arrears," added the statement.

In a similar case, the department arrested a Bengaluru businessman on February 12 at the Mumbai airport and jailed him for six months for failing to pay tax arrears, including penalty to the tune of Rs 11.94 crore.

Section 222 of the Income Tax Act provides for attachment and sale of moveable/immovable property and arrest and detention of tax evaders.



Source: IANS