Sonu Sood, a Bollywood actor and philanthropist, was at the forefront of India’s COVID-19 relief efforts, helping hundreds of thousands access healthcare and resources as the country crumbled under the pandemic.
Now, India’s income tax department has accused him of evading taxes worth more than Rs 200 million, the equivalent of $2.7 million, allegations that critics said were politically motivated.
The accusations surfaced just days after the actor announced an education partnership with the Aam Aadmi Party, a political rival to the ruling Bharatiya Janata Party led by Prime Minister Narendra Modi. Last week, authorities raided Sood’s properties in Mumbai.
In a statement on Friday, Human Rights Watch expressed concerns about the case against Sood and accused the Indian government of using allegations of tax evasion and financial irregularities to “silence human rights activists, journalists, and other critics of the government.”
“The raids appeared to be politically motivated because the actor had received widespread praise from the general public, media, and opposition politicians across the country for his philanthropic work during the pandemic,” the New York-based rights group said.
According to India’s tax authority, Sood’s charity foundation, which was founded in July last year, raised donations over $2.45 million in the last five months.
However, the department has alleged that only about $257,000 from these funds went into relief work, and the remaining $2.2 million sits unused in his charity’s bank account.
The Central Board of Direct Taxes, India’s highest tax authority, claimed to have found “incriminating evidence pertaining to tax evasion” against the actor and his associates. The authority alleges Sood misrepresented his financial statements to evade taxes and acquire properties.
“The main modus operandi followed by the actor had been to route his unaccounted income in the form of bogus unsecured loans from many bogus entities,” the tax authority said in a press statement on Saturday.
Authorities also alleged that some funds were raised through donors outside India, in violation of laws meant to prevent foreign countries from influencing the country’s affairs through donations.
The Sood Charity Foundation did not immediately respond to VICE World News’ request for comment. However, the actor has denied the allegations on social media.
“Every rupee in my foundation is awaiting its turn to save a precious life and reach the needy,” Sood said in a tweet on Monday. “In addition, on many occasions, I have encouraged brands to donate my endorsement fees to humanitarian causes too, which keeps us going.”
Sood had made efforts to provide aid to migrant workers unable to work during lockdowns, front-line health workers, and families in desperate need of oxygen and medicines during India’s devastating second wave in April. At the time, the government was criticized for censoring online pleas for help and covering up the death toll.
Journalists and politicians have pointed out the unusual speed with which tax authorities went after Sood.
A 2014 report by India’s government auditor noted that it can take anywhere between five to 48 years to start the prosecution of companies accused of tax evasion. In India, evading taxes is punishable by up to seven years in prison.
“At first blush, a Rs. 200-million tax evasion [allegation] doesn’t deserve a raid,” Ajay Mankotia, a former revenue department official who now runs a tax advisory firm, told VICE World News.
The former tax official stressed that tax evasion was a rampant issue across India, adding that the raid on Sood was uncharacteristic given the relatively small amount in question, “especially when it’s a multi-city, multi-party raid involving huge resources by way of manpower including the police.”
A tax raid entails an invasion of the subject’s privacy, Mankotia said, so it should be used sparingly, and only when there is strong evidence of evasion.
Although charitable foundations are sometimes used as fronts for illegal transactions, and many such cases have been investigated by the authorities, proving them has been “an uphill task,” Mankotia said.
“But that’s not to suggest that Sonu Sood has done the same,” he added.
This was not the first time Sood came under scrutiny over suspicions of tax fraud. Tax authorities previously raided his home in Mumbai in 2012 concerning, over suspicions about a property deal worth $4 million.
India’s tax authorities have also conducted raids to investigate actor Taapsee Pannu and filmmaker Anurag Kashyap as part of a 2018 tax evasion probe against a production house co-founded by Kashyap. Pannu and Kashyap, both of whom are vocal critics of the Modi government, have denied allegations of tax evasion.