Property in the name of I-T assessee need not be his: Supreme Court

NEW DELHI: The Supreme Court has said the property revealed by income tax assessees need not necessarily be treated as their own though they may have paid taxes on it, because this may allow the corrupt to park ill-gotten wealth in other people’s names and escape punishment. “The property in the name of an income tax assessee itself cannot be grounds to hold that it actually belongs to such an assessee. In case this proposition is accepted, in our opinion, it will lead to disastrous consequences” a bench comprising justices CK Prasad and MY Eqbal said.

The bench allowed the Tamil Nadu government’s appeal against a 2010 Madras High Court judgement discharging former ministers K Ponmudi and N Suresh Rajan from the disproportionate assets cases against them. The ministers are alleged to have amassed assets disproportionate to their known sources of income between 1996 and 2001. “It will give an opportunity to corrupt public servants to amass property in the name of known persons, pay income tax on their behalf and then be out from the mischief of law,” the bench said. In September 2009, a trial court charged both with criminal misconduct and corruption. However, on appeal , the high court in December 2010 discharged them from the cases. The state then appealed to the top court.

The Supreme Court held that the fact that others had paid income tax on the property was not enough to discharge the accused, particularly in view of the allegation by the prosecution that there was no other income that would allow the purchase of such assets. “We are of the opinion that this was not the stage where the court should have appraised the evidence and discharged the accused as if it was passing an order of acquittal,” the bench said. “Further, a defect in investigation itself cannot be grounds for discharge.” Rajan is accused of possessing property disproportionate to his known sources of income, worth over . 23 lakh in the names of his parents, sister and brother-in-law .