Win for whistleblowers as Income Tax Department probes Vasan Healthcare  

Ex UPA finance minister P Chidambaram said no member of his family had economic interests in Vasan

Ex UPA finance minister P Chidambaram said no member of his family had economic interests in Vasan

The whistleblowers in the Indian Revenue Service (IRS) appear to have been vindicated, with the government asking the Income Tax Department to move ahead with the tax cases related to high-profile Tamil Nadu company Vasan Healthcare. 

According to reliable sources, the new Revenue Secretary Mr Hasmukh Adhia held a meeting recently and directed senior officials to take concrete action on the issues of tax evasion and TDS default in accordance with the Income Tax Act. 

Eyebrows were being raised over the issue as no prosecution case had been filed against Tamil Nadu company Vasan Healthcare despite the company not depositing an amount of Rs 19.22 crore with the government that it had deducted from the salaries of its employees in 2012. 

This constitutes a very serious offence as the employees have paid the tax but it has not been passed on to the government. 

Senior officials point out that in similar instances of TDS default such as the Vijay Mallya case related to Kingfisher Airlines, and the Spicejet case involving the Maran brothers, the IT Department had moved promptly to file prosecution proceedings. 

However, in the case of Vasan Healthcare the case has been allowed to linger on without prosecution proceedings being filed. 

“There is a Supreme Court judgment which lays down that any delay in TDS payments to the government constitutes a default and appropriate action has to be taken under the Act,’’ a senior IRS official told Mail Today. 

Vasan Healthcare Private Ltd had in a petition to the CBDT chairman dated March 19, 2015 asked for having part of the TDS amount of Rs 19.22 crore payable by the company adjusted against the refund that it was expecting from the IT Department. It had also asked for extra time for paying in installments the remaining part of the TDS that it owed the government. 

Interestingly, the Income Tax Commissioner, Rajiv Hota, who had raised the demand for payment of TDS in the Vasan case was sidelined subsequently with a posting that was below the level of his seniority. 

Asked to comment on the delay on the issue, the Central Board of Direct Taxes (CBDT) told Mail Today: “Actions including prosecutions in specific cases are not dealt with by CBDT but by respective jurisdictional authorities in the Income Tax Department. As far as the request of Vasan Health Care in their petition to the Chairperson CBDT is concerned, the same was rejected immediately on receipt and such rejection was duly conveyed to the jurisdictional authorities.’’ 

“Necessary actions in respect of defaults pertaining to TDS are being taken by them, as per provisions of the Income tax Act 1961,” the statement, sent by RK Yadav Commissioner (Inv) CBDT, further said. 

"Regarding the Commissioner handling TDS matters at Coimbatore I may inform that before restructuring of the work force in the Income Tax Department, Commissioner TDS Chennai was looking after the TDS matters of Coimbatore also. After restructuring, a new post of Commissioner TDS was created and the present incumbent got posted as per the due process," the statement added. 

The Vasan issue came into the limelight when Commissioner of Income Tax MS Rao was pursuing the tax evasion case against Vasan, but was abruptly transferred from the post. He has moved the Central Administrative Tribunal (CAT) against his transfer. 

Rao has alleged in his affidavit that former UPA finance minister P Chidambaram’s son Kanti Chidambaram is linked to Vasan, and senior officials who were appointed to key positions when Chidambaram was the finance minister wanted him to go soft on the case. 

Rao has alleged that the transfer was “to punish him for not heeding the unlawful expectations of higher officials." 

However, Chidambaram has issued a statement saying: “Neither I, my son nor any member of my family have any equity or investment or economic interest in Vasan."

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