HC quashes income tax proceedings against Karti Chidambaram, his wife

File Photo: Karti Chidambaram

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.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel