I-T department tells Chennai court Chidambarams didn’t disclose foreign assets
The Income-Tax (I-T) department on Friday informed a special court in Chennai that former Union minister P Chidambaram’s wife Nalini, son Karti and daughter-in-law Srinidhi didn’t disclose their foreign assets and investments while filing their I-T returns.
Confirming the department’s action, Surabhi Ahluwalia, spokesperson for the Central Board of Direct Taxes (CBDT), said, “The Income Tax department has filed prosecution complaints against three persons, Karti Chidambaram, Nalini Chidambaram and Srinidhi Chidambaram , under the Black Money Act.” She added, “The I-T case is that they made investments in foreign assets, which were not disclosed fully or partly in their returns.”
Not disclosing foreign assets and investments amounts to the violation of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, and it invites a heavy penalty besides a jail term for up to 10 years. Karti, Nalini and Srinidhi, in an earlier reply to the income tax department, had dismissed the charges as baseless and untenable.
“The provisions of the Act cannot be invoked or applied in a case where there is no undisclosed foreign income or asset,” said Karti in his reply to the department on April 27. Questioning the I-T department’s May 11 charge sheets, Karti tweeted, “Will remittances under Liberalised Remittance Scheme LRS of @RBI send through Nationalised Bank @IOBIndia from tax paid funds also fall under this?”
Providing more details, B Murali Kumar, director general (Investigation) in Chennai, where the case is going on, said that Karti’s Indian company Chess Global Advisory Services Pvt. Ltd had invested in two foreign companies, Totus Tennis Ltd of the UK and Nanoholdings LLC of the US. “For the UK and US companies, he signed a declaration that he is the 100% beneficiary. But in its tax return at home, he hasn’t declared the investment. So the first complaint is against the company’s undisclosed investment,” said Kumar.
He added that the other three complaints were against Karti, Nalini and Srinidhi for jointly owning an immovable property in UK but not declaring it at home. The Black Money Act was passed in 2015 with the purpose of cracking down on people owning undisclosed assets outside India. It imposes a heavy penalty and tax on such assets to discourage Indians from stashing away illegal and unaccounted wealth in foreign destinations.
Earlier, the department had issued notices to Karti asking for details of his company’s investments in Totus and Nanoholdings. Karti had challenged the I-T notice in the Madras high court, holding that he had fully disclosed all his investments and remittances in the two overseas companies in the original as well as revised I-T returns.
He alleged in the high court that despite his reply to an earlier I-T notice, the department issued a fresh notice on April 13 for action against him. The high court had allowed the I-T department to proceed with its enquiry.