Chennai: The Madras High Court has quashed the Income Tax proceedings initiated against Karti Chidambaram, son of former Union Finance Minister P Chidambaram, and his wife over alleged non-disclosure of cash transactions of about Rs seven crore following sale of a property near here. The Court, while ruling that the action is "not maintainable and premature", clarified that proceedings may be initiated again if the authority concerned deemed the same is required after proper assessment.
The prosecution case was that Karti, the Congress Member of Parliament, representing Sivaganga, and his wife Srinidhi received Rs 6.38 crore and Rs 1.35 crore in cash respectively, through 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.
Hence, the I-T department initiated criminal prosecution for alleged non-disclosure of income by them to the tune of Rs 7.73 crore for 2015-16 fiscal.
Challenging the same, the duo contended that the prosecution is liable to be quashed for procedural lapse.
They argued that the prosecution has been initiated for filing of false return, which amounts to offence of giving false evidence before a court under the Indian Penal Code.
As per the Income Tax Act, the proceedings of the assessing officer are deemed to be that of a proceeding of a civil court and therefore, only the assessing officer should have initiated the prosecution.
But in this case, a deputy director of investigation of the department has initiated the prosecution, they claimed.
Granting liberty to the department to initiate penal action as per law, if it chooses to, Justice N Sathish Kumar said, the prosecution launched by the Deputy Director is not maintainable.
The present complaint lodged by the prosecution is a premature one.
If the assessing officer comes to the conclusion in proceedings under Section 153 of the Income Tax Act, it is open to the Department to initiate penal action as per law.
Justice Sathish Kumar, who pronounced the order on Friday, observed that unless a finding is recorded by the assessing officer as to a willful attempt to evade tax or filing false verification, the complaint filed by the Deputy Director is not maintainable.
The prosecution case was that Karti, the Congress Member of Parliament, representing Sivaganga, and his wife Srinidhi received Rs 6.38 crore and Rs 1.35 crore in cash respectively, through 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.
Hence, the I-T department initiated criminal prosecution for alleged non-disclosure of income by them to the tune of Rs 7.73 crore for 2015-16 fiscal.
Challenging the same, the duo contended that the prosecution is liable to be quashed for procedural lapse.
They argued that the prosecution has been initiated for filing of false return, which amounts to offence of giving false evidence before a court under the Indian Penal Code.
As per the Income Tax Act, the proceedings of the assessing officer are deemed to be that of a proceeding of a civil court and therefore, only the assessing officer should have initiated the prosecution.
But in this case, a deputy director of investigation of the department has initiated the prosecution, they claimed.
Granting liberty to the department to initiate penal action as per law, if it chooses to, Justice N Sathish Kumar said, the prosecution launched by the Deputy Director is not maintainable.
The present complaint lodged by the prosecution is a premature one.
If the assessing officer comes to the conclusion in proceedings under Section 153 of the Income Tax Act, it is open to the Department to initiate penal action as per law.
Justice Sathish Kumar, who pronounced the order on Friday, observed that unless a finding is recorded by the assessing officer as to a willful attempt to evade tax or filing false verification, the complaint filed by the Deputy Director is not maintainable.
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4 Comments on this Story
 | Jai ShreeRam22 minutes ago seems that either the Tax Department is not aware of the basic requirements of law or this has been done deliberately to sabotage the case |
 | Suresh Kamath1 hour ago SHOCKING Ruling this and in spite of CASH deals of over 6 Cr and 1.3 Cr during their SALE of Land and yet Court finds NO MERIT for the I-T Official CLAIM against such CASH and there are RULES that NO CASH transaction above Rs 20000 in CASH is NOT Legal and these SHOULD be form of Cheque/DD ONLY and WONDER all such RULES are for COMMON Persons and NOT for these ELECTED Members ?? I-T Dept MUST approach APEX COURT and get REVIEW to this RULING Immediately and such CASH deals CANNOT be allowed by ANY ONE as NONE are ABOVE the LAW and such RULING be REVIEWED Pronto and Actions be taken against these OFFENDERS |
 | Ashutosh 1 hour ago The guy received Rs 6 cr in hard cash and still HC is defending him. Strange. |