Karti Chidambaram gets relief as court to take final call in I-T case

CHENNAI: The first bench of the Madras High Court on Wednesday granted a brief respite to Advantage Strategic Private Limited, a consultancy firm at Nandanam here, to which former Union Finance Minister P Chidambaram’s son Karti is allegedly associated, by holding that any action taken in the meanwhile by the Income Tax department will be subject to the result of the writ appeal filed by the firm.

A bench of Chief Justice Indira Banerjee and Justice R Hemalatha granted the temporary relief while passing interim orders on a writ appeal from the firm, represented by its director M Rajesh.

The bench also directed the IT department to produce the records relating to a notification dated June 24, 2016, which transferred the proceedings pending against the firm from one Assessing Officer to another.
“The authorities are directed to produce the records pertaining to the impugned order of transfer and in particular the reasons recorded for the transfer,” the bench said and posted the matter for hearing on January 3.

Any action taken in the meanwhile will abide by the result of the appeal, the bench added.
Originally, the firm had filed a writ petition challenging the 2016 notification of the Principal Commissioner of Income-Tax, transferring the file of the petitioner from the Assessing Officer, DCIT, Corporate Circle-(1) to the AO in Central Circle-(2) in Chennai.

Justice TS Sivagnanam had rejected the plea on December 5. Aggrieved, the firm preferred the present writ appeal to quash the 2016 transfer order. Its interim prayer is to stay the operation of the order.
According to appellant company, it holds only 0.1 per cent of shares in Vasan Health Care Private Limited and it has no representation in the board and there was no nexus with the same. Yet, the Income Tax department issued the transfer order under Section 127 of the IT Act, with the object of centralising the files of the petitioner company with Vasan Group and for a co-ordinated investigation with Vasan Group to prevent leakage of revenue.

Holding that there are provisions in the sub-sections (2) and (3), the single judge had erroneously held that there was no need to provide reasonable opportunity to the petitioner company before ordering the transfer.
Seeking a stay, the company said it has raised substantial questions of law in the appeal and has a fair chance of success. If in the meanwhile, the impugned 2016 notification is allowed to be in force, its file would be centralised with that of Vasan group and the central circle assessing officer will assume jurisdiction over its case.

The facts relating to Vasan group will be unnecessarily imported into its case and its assessment will be subjected to unnecessary scrutiny causing grave prejudice to it. Appellant firm is in no way connected with Vasan group, which is facing a ‘search and seizure case’, appellant contended.