Music director A.R. Rahman was served a court notice on 11th September by the Madras high court for tax evasion. The notice alleges that Rahman used a foundation, in which he is the managing trustee, as a conduit to evade tax by routing an income of more than Rs. 3 crore to it. The tax evasion petition was filed by the income-tax department. The Income Tax Appellate Tribunal had ruled in favour of Rahman by setting aside the principal CIT’s order, prompting the department to file an appeal.
According to the income-tax department, Rahman had received income to the tune of Rs. 3.47 crore in the assessment year 2011-12 in connection with an agreement made with the UK-based Libra Mobiles. The contract was to compose exclusive ringtones for the company and the term of the contract was three years. As per the contract, A.R. Rahman instructed the company to pay his remuneration directly to the foundation managed by him, the department said.