The Madras High Court on Friday said the income tax reassessment proceedings against Congress MP Karti Chidambaram and his wife Srinidhi Chidambaram for non-disclosure of income of Rs 7 crore - following a sale of immovable property in 2015 near Muttukadu village in the outskirts of Chennai - was “premature”.
Allowing a review petition filed by the Chidambaram couple, Justice N Sathish Kumar ordered that the complaint filed by the deputy director of Income Tax is “premature at this stage” and “launched by an incompetent person”.
“The basis for lodging the complaint,” the court said, “is only a formation of the opinion by the deputy director of the Income Tax department”.
Two complaints were filed for offences under sections 276C(1) and 277 of the Income Tax Act 1961 against Karti and another complaint against both husband and wife under Sections 276C(1), 277 and 278 of the Act.
According to I-T officials, the Chidambarams received the property sale amount through a cash transaction but failed to disclose it in their income tax returns in the assessment year 2014-2015.
The court further added that “there must be findings that the statement given by the assessee during the assessment proceeding is false” and it has to be recorded by the concerned officer in the reassessment proceedings.
{{/usCountry}}The court further added that “there must be findings that the statement given by the assessee during the assessment proceeding is false” and it has to be recorded by the concerned officer in the reassessment proceedings.
{{/usCountry}}“Without findings recorded, this court is of the view that the prosecution cannot be launched by merely on the basis of some statements said to have been recorded from third parties,” the judge said. Senior advocate Kapil Sibal among a host of other lawyers appeared for Srinidhi and Karti, the son of former union finance minister P Chidambaram.
However, the court ruled that reassessment proceedings could be initiated if the concerned authority such as the assessing officer “comes to the conclusion in a proceeding under Section 153 of the Income Tax Act, it is open to the department to initiate penal action as per law”.
Earlier, the case was transferred to a special court for offences by MPs and MLAs from the economic offences court. The special court had rejected discharge applications and Karti and Srinidhi Chidambaram challenged it at the high court for its review.