AIADMK chief J Jayalalithaa may soon be able to extricate herself from the 18-year-old income tax returns cases, as the Central Board of Direct Taxes (CBDT) is likely to treat it as a "compoundable offence" and let her off after collecting a penalty.
Sources told TOI that the Union law ministry had given its opinion to the board that the case could be compounded (settled out of court) if it fulfilled three criteria — it should fall under the purview of such cases; the accused should pay a penalty with interest; and meet the cost of the litigation. CBDT sources said the case qualified for compounding.
"The board is of the view that it is a compoundable case since it is of non-filing of returns, and not tax evasion," said a source. "The penalty is yet to be calculated, and it is expected to be a hefty one."
Jayalalithaa and her friend N Sasikalaa are facing cases for their alleged wilful failure to file tax returns for the years 1992-93 and 1993-94, which is a punishable offence under Section 276(CC) of the IT Act. The cases were filed in 1996. After inordinate delay, the case bounced back to life after the Supreme Court on January 30 this year directed the economic offences court to complete the trial within four months. By another order, the court extended the date till September 6, 2014.
In these 16 years, the case had witnessed more than 100 adjournments, umpteen petitions and several rounds of cases in the trial court, high court and the Supreme Court.
As the economic offences court sought to proceed with the case, and insisted on Jayalalithaa's personal appearance, the former chief minister's side changed tack and sought to settle the issue out of court. They offered to compound the offence, by paying a penalty and reimbursing the case cost. On September 24, the Madras high court exempted her from personal appearance till the CBDT took a decision on her compounding application.
The economic offences court at Egmore here has posted the matter to December 1 for further hearing. Once the CBDT takes a decision on the matter, it would be conveyed to the trial court, rendering the criminal proceedings infructuous.
The other major legal challenges for the former chief minister, then, would be the impending appeal against her conviction in the Rs 66.65 crore disproportionate assets case in the Karnataka and the US$3 lakh birthday gifts case, which was quashed by the high court only to be challenged by the CBI in the apex court. It is still pending in the Supreme Court.