CHENNAI: The Madras High Court has set aside an order dated November 3, 2014 of the Assistant Commissioner of Income-Tax, Circle 51(1) in New Delhi declaring Kalanidhi Maran, brother of former Union Telecom Minister Dayanidhi Maran, as the principal officer of Spicejet Limited. Allowing a writ petition from Maran seeking to quash the order, Justice M Duraiswamy set aside the order on Wednesday.
Earlier, petitioner submitted that he was merely a non-executive chairman of the Board of Directors of the company and not at all in charge or control of the day-to-day affairs and operations of the company, which was managed by its managerial personnel.
The company had its corporate head office at Delhi from where it was managed and controlled, whereas the petitioner was residing and carrying on business at Chennai. The petitioner neither received any sitting fees for participating in the Board meetings of the company nor drew any salary from it as he was not an employee of the company. Therefore, he could never at any probability be considered as Principal Officer of the company and especially so when the managing director of the company K Natrajen had also been held as the Principal Officer of the same company.
Conceding the contentions, the judge held that though the petitioner and his company were holding more than 50 per cent shares, in the absence of any material to establish that he was in charge of the day-to-day affairs, management and administration of the company, the Income-Tax officials should not have named him as Principal Officer.
The main criterion treating a person as the Principal Officer is he should have been in charge of the management, administration and day-to-day affairs. It was also stated that the petitioner who is based at Chennai is not involved with the day-to-day management and has not made any visits to the company till date as he does not draw any salary and attends the Board meetings only in the non-executive capacity, for which, he does not even get any sitting fees.
“For the reasons stated above, it is clear that the petitioner was not involved in the management, administration and the day-to-day affairs of the company, therefore, the petitioner cannot be treated as Principal Officer,” the judge said and set aside the November, 2014 order.