Madras high court quashes prosecution against film director Gautham Menon in income tax case

CHENNAI: Madras high court quashed a prosecution launched by the income tax department against film director Gautham Vasudev Menon for the alleged failure on the part of Photon Kathas Production Private Limited, his film production company, to file I-T returns for the assessment year 2013-14.

Justice G K Ilanthiraiyan passed the order in view of a submission made by advocate Revathi Manivannan for Gautham Menon that he was no longer a director of the company and that he resigned from the post on May 2, 2011.

The issue pertains to a complaint registered by the department in 2019 before the additional chief metropolitan magistrate (economic offences), Egmore. In the complaint, the assistant commissioner of income tax, Non-Corporate Circle-20(1), Nungambakkam, Chennai, alleged non-filing of income tax returns by Photon Kathaas Production Pvt Ltd for the assessment year 2013-14.

The petitioner was arrayed as third accused in the case in his capacity as director of the production company. Aggrieved, Gautham Menon approached the high court seeking to quash the proceedings.

While allowing the petition, the court noted that the petitioner resigned as director of the company well before the assessment year in question and duly filed the relevant forms before the registrar of companies, intimating his cessation from the company.

Since the petitioner was neither a director nor involved in the day-to-day affairs of the company during the relevant period when the alleged offence was committed, he could not be held vicariously liable for the company’s default in filing returns, the court said.

According to the petitioner, the department merely relied upon the petitioner's past designation as director without establishing his active involvement in the company’s affairs during the relevant period, and that the prosecution amounted to an abuse of the process of the court.