The Madras High Court has quashed demand notice and the consequential reassessment order issued by the assistant commissioner of Income Tax, Chennai, seeking payment of about Rs. 6 lakh from Former Union Finance Minister P. Chidambaram and his family members.
The court was allowing the petitions by Mr. Chidambaram and his family members challenging the notice and the re-assessment order.
The petitioner, claiming an exemption of income from sale of coffee subjected to only pulping and drying was accepted, under Section 10(1) of the Income Tax Act from their estate in Coorg in Karnataka as agricultural income, which was allowed then.
Besides Mr. Chidambaram, the son Karti, daughter-in-law Srinidhi and wife Nalini Chidambaram are the other petitioners.
The Assistant Commissioner of Income Tax had issued a demand notice subjected to assessment year on the ground that income chargeable to tax had escaped assessment.
Challenging this, the petitioner professed that the income tax department without jurisdiction reopening the assessment and reassessing the same especially an income related more than four years of the assessment year was illegal.
They also argued that there were several hundreds of coffee growers whose income had been exempted from tax on this ground.
The petitioner contended that without disposing of the petitioner’s objections to the reopening of assessment, the assessment could not have been completed and this is in violation of the law laid down by the Hon’ble Supreme Court.
Justice Sivagnanam, in his order stated that whether there has been any discrimination to singled out the petitioner where several hundreds of coffee growers who are only doing pulping and drying of coffee seeds and not engaged in curing coffee seeds and not in a single case for the assessment year 2009-2010, reopening has been done.
Finally the court held that the notice of re-opening and the consequential assessment orders are held to be illegal, unsustainable and a clear case of change of opinion and the impugned proceedings are quashed.
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