CHENNAI: In a setback to former union minister P
Chidambaram's immediate family members, the Madras high court on Wednesday refused to stay prosecution initiated against them by the income tax department under Black Money Act.
On May 11, the I-T department filed a complaint against Chidambaram’s wife Nalini, son Karti and daughter-in-law
Srinidhi for alleged non-disclosure of overseas assets in the special court for economic offences, Chennai.
The complaints were filed under section 50 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act. According to the I-T department, Nalini, Karti and Srinidhi have failed to disclose a property they jointly own in
Cambridge, in the UK worth Rs 5.37 crore.
Apart from this, the department has alleged that Karti had failed to disclose an overseas bank account he holds with
Metro Bank in UK and investments he had made in Nano Holdings LLC, USA.
Besides this, Karti has also failed to disclose investments made by Chess Global Advisory, a company co-owned by him which amounts to an offence under the Black Money Act, the department said in its complaint.
Assailing the move, the trio moved the high court seeking interim order staying the prosecution and to direct the department to provide a copy of the complaint to them.
When the plea came up for hearing, senior counsel AR L Sundresan for the petitioners said, "Law mandates that a special court must be established to hear cases under the Black Money Act. But so far the state has not notified any such special court. The special court for economic offences does not have jurisdiction to take cognizance of the complaint."
Moreover, the authority who has ordered sanction for the prosecution has no such authority under the Income Tax Act, he added.
Opposing the plea standing counsel for I-T submitted that the complaint is yet to be numbered and once it is numbered copies would be furnished to the petitioners. The plea is too premature, he added.
Recording the submissions, Justice S Baskaran refused to pass any interim order. He then directed the I-T to file counter and posted the plea to June 5 for further hearing.
It all started when the department issued notices to the trio under the Act. Immediately, the family moved the high court seeking to restrain the department from initiating prosecution against them in the special court.
They claimed that they have duly disclosed all the details of such properties and bank accounts in foreign countries in their returns and alleged that the department has initiated such proceedings only to harass and humiliate them.
But denying the allegation, the department said that the proceedings have been initiated based on information provided by the CBI.
It added that issuing notice under the Act and sanctioning prosecution are entirely two different aspects and that the department can sanction prosecution notwithstanding pending inquiry on assessment as the Act does not prohibit the department from doing so.
