In a big relief for Rajinikanth, the Income Tax department has decided to withdraw their three appeals filed in the Madras High Court against the megastar for hiding his income and expenditure details. The IT department cited a circular by the Central Board of direct taxation deciding to let go of the legal challenges where the contentious amount is Rs 1 crore or less. The bench comprising Justice Vineet Kothari and Justice R. Suresh Kumar acceded to a request made by senior standing counsel for the IT department M. Swaminathan to withdraw the appeals. CBDT had issued directives for the tax authorities on August 8, 2019, to not to go on appeal where the liable tax amount was less than 1 crore.
The IT officials under the supervision of the Commissioner of Income Tax, Chennai had levied penalties under section 271(1)(C ) of the Income Tax Act after conducting a survey operation at his office premises situated in Poes Garden residence in Chennai in February 2005. The IT department had imposed penalties of Rs 6.20 lakh for the year 2002-03, Rs.5.56 lakh for 2003-04 and Rs. 54.46 lakh for 2004-05 after observing a significant gap in the reported income and professional expenditure by the superstar.
Rajinikanth had appealed against the penalties but the IT department dismissed them. He later moved to the Income Tax Appellate Tribunal which upheld his appeal in July 2013 citing lack of material evidence and proper investigation before the imposition of penalties. The tribunal had also ruled that the expenditure estimation submitted by the actor in his tax returns should not be taken as concealing or presentation of false details. Subsequently, the IT department had moved the Madras High Court calling the tribunal's order inconsistent and taken without considering the survey operation by the assessing officials.