More relief for former Union Minister P Chidambaram as Madras High Court sets aside Income Tax notices

CHENNAI: In a major relief to former Union Finance Minister P Chidambaram, the Madras High Court has quashed a batch of notices issued by the Income Tax (I-T) Department against him and his family members for the assessment year 2010-11.

Justice T S Sivagnanam granted the relief while allowing writ petitions from Chidambaram. The judge had granted a similar relief to them for 2009-10 assessment year on November 13 last.

According to petitioners, they grow coffee and after pulping and drying, sell the raw coffee. The proceeds from the sale of raw coffee form agricultural income, which is exempted from the applicability of Section 10 (1) of the Act. In case of sale of cured coffee, 25 per cent of the income is subjected to tax as business income under Rule 7B (1) of Income Tax Rules.

The petitioners had been assessed under the Act for several years, including the subject assessment year 2010-11, wherein the claim for exemption of income from sale of coffee had been subjected only to pulping and drying, which was accepted under Section 10 (1) of the Act.

The petitioners said there were several hundreds of coffee growers, whose incomes have been exempted. However, the I-T Department chose to issue notice under Section 148 of the Act for the subject assessment year on the ground that income is chargeable to tax and the same has escaped assessment as they failed to disclose fully and truly all the material particulars only in respect of petitioner and his family, they contended.