Breather for Karti: HC junks I-T proceedings against Sivaganga MP

CHENNAI: In a relief to Sivaganga MP Karti Chidambaram and his wife Srinidhi Chidambaram, the Madras High Court on Friday ruled that the Income Tax proceedings initiated over the alleged non-disclosure of cash transactions to the tune of Rs 7.3 crores following a property sale near Muttukadu were premature. 

Justice N Sathishkumar also said that the Deputy Director of the Income Tax Department was not the competent authority to initiate the re-assessment proceedings. The judge observed, “...the very complaint itself is launched on the basis of opinion formed by the Deputy Director of Income Tax Department, based on some materials according to them it is only helpful for corroboration.

The prosecution has to fail and the court has to conclude that such prosecution is without any materials. In such view of the matter, this court is of the view that the complaint filed by the Deputy Director of Income Tax is premature at this stage.”

The issue pertains to the case moved by I-T, in which Karti allegedly received Rs 6.38 crore in cash while his wife received `1.35 crore in cash through the sale of land owned by them near Muttukadu. However, they had neither disclosed the same in their assessment nor paid taxes for the income.

The non-disclosure came to light during a joint search conducted by officials from the Income Tax Department and the Enforcement Directorate on December 1, 2015 in connection with the case of Advantage Strategic Consulting Pvt Ltd.

‘Can initiate proceedings on reassessment’
Reassessment proceedings may be initiated if the authority concerned concludes that the same is required under Section 153 of the I-T Act, says court