The Income Tax (IT) Department has summoned Jet Airways founder Naresh Goyal for questioning in relation with an alleged case of tax invasion. This is the first time when an enforcement agency has summoned Goyal on charges of any financial irregularities in Jet Airways.
The investigation wing of the I-T Department has found alleged irregularities in transactions between Jet Airways and its Dubai-based group firms to evade taxes worth Rs 650 crore, sources told sources told the Economic Times. The grounded airline reportedly paid commissions to its general sales agent in Dubai every year. Goyal will be asked to provide an explanation for these payments, they said.
According to the investigation report, such payments were allegedly in excess of permissible business transactions under the Income Tax Act and will not considered as allowable expenses.
"The survey was conducted at the time when Jet Airways was delaying the announcement of its June quarter result," an income tax official told ET.
"These are excessive payments made with the intent to divert funds abroad, so as to evade taxes."
"The assessment wing is now carrying out the inquiry, and based on the findings, had summoned Goyal to explain the case," another person said.
The documents were reportedly seized during searches at the Jet Airway's Mumbai offices in September last year, while the probe was completed in February.
Earlier on May 30, cash-strapped Jet Airways had said that it is not in a position to consider and approve the audited financial results for the fourth quarter of FY19. "The results couldn't be approved in view of the ongoing bidding process undertaken by the domestic lenders for change in the management of the company, coupled with resignation by members of the board of directors, its key managerial personnel and other employees across functions," the airline said in a filing to the Bombay Stock Exchange.
Debt-laden Jet Airways, which has been grounded since 18 April due to funding woes, has saw its top executives exiting the company in the past few months, following the resignation of its founder Naresh Goyal from the board of the airline in March.
Naresh Goyal and his wife Anita Goyal had resigned from the Jet Airways board on March 25, transferring the control to the lenders led by the State Bank of India. Top five executives of the airline, including CEO Vinay Dube, already resigned from the airline citing "personal reasons". Jet Airways has an overall debt of over Rs 8,500 crore.
Edited by Chitranjan Kumar