The Madras High Court on Friday discharged Sivaganga Member of Parliament Karti P. Chidambaram and his wife Srinidhi Karti Chidambaram from prosecution launched against them by the Income Tax department for alleged evasion of capital gains tax.
Justice N. Satish Kumar held that the prosecution was not maintainable in law since it had not been launched by a competent official. He said the prosecution ought to have been launched by the Assessing Officer and not a Deputy Director.
The judge allowed individual criminal revision petitions filed by the couple against the refusal of a special court, for cases against Members of Parliament as well as the Legislative Assembly, to discharge them from the prosecution.
He agreed with senior counsel Kapil Sibal, P.S. Raman and N.R. Elango, representing the couple that the prosecution had been launched purely based on an adverse opinion formed by the Deputy Director of Income Tax.
He, however, observed in his judgment that “if the Assessing Officer comes to a conclusion (of alleged evasion of tax) in proceedings under Section 153 of the Income Tax Act, it is open to the department to initiate penal action as per law.”
The prosecution’s case was that Mr. Karti Chidambaram had sold 5.110 acres of land at Muttukadu near here for ₹21.71 crore of which ₹15.33 crore was obtained through cheque and the rest by cash. It was alleged that the cash portion was not disclosed in the I-T returns for 2014-15.
Similarly, the department had accused Ms. Srinidhi Karti Chidambaram of selling 1.18 acres of land for ₹5.01 crore of which only ₹3.65 crore was received by cheque. The cash component of ₹1.36 crore was not disclosed in her I-T returns for 2015-16, it was alleged.
