HC quashes I-T proceedings against Karti Chidambaram, wife

The Chennai 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 INR 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 isrequired after proper assessment.

Also read: INX case: Karti Chidambaram challenges ED notice to vacate Jor Bagh house

The prosecution case was that Karti, the Congress Member of Parliament, representing Sivaganga, and his wife Srinidhi received INR 6.38 crore and INR 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.

Also read: File tax returns if you have foreign trips, steep electricity bills

Hence, the I-T department initiated criminal prosecution for alleged non-disclosure of income by them to the tune of INR 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 (December 11), 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.

---

(Except for the headline, this story has not been edited by The Federal staff and is auto-published from a syndicated feed.)