Procedural lapses in I-T case, Karti Chidambaram tells court

CHENNAI: Former union minister P Chidambaram’s son Karti Chidambaram and his wife Srinidhi on Friday submitted before the Madras High Court that prosecution initiated against them by the Income Tax Department on the alleged non-disclosure of an income of `7 crore for 2015-16 was carried out without any jurisdiction.

The issue relates to the I-T assessment filed by Karti and his wife for the financial year of 2015-16. According to prosecution, Karti received a sum of Rs 6.38 crore in cash while Srinidhi received Rs 1.35 crore in cash through the sale of a land owned by them near Muttukadu. However, they had neither disclosed the same in their assessment nor paid taxes for the income.

A joint search conducted by officials from the Income Tax Department and the Enforcement Directorate on December 1, 2015,  found electronic evidence related to the transaction. Since the department found non-disclosure of income, it reopened the assessment and initiated criminal prosecution against the couple.

Senior advocate Kapil Sibal representing Karti Chidambaram submitted before Justice N Sathishkumar that none of the procedures that were to be followed by the I-T Department has been complied with. Rules of the Income Tax Act  state that only proceedings of the assessing officer are deemed to be that of a proceeding of a civil court.

Therefore, only the assessing officer should have initiated the prosecution. But, in this case, a deputy director of investigation of the department had initiated the prosecution. He was not the assessing officer and, therefore, he lacks jurisdiction to make a complaint for prosecution, the senior advocate said.

Counsel also said that due process was not followed by the department to initiate such prosecution. Sibal added that prosecution can be initiated only after setting aside the original assessment. However, till now no orders have been passed on them. Therefore, no prosecution can be initiated until an order is passed, he said. Recording the submissions, the judge adjourned the case to November 10 for further arguments.