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Madras HC rejects Karti Chidambaram’s plea against Transfer of Tax Evasion case to Special Court [Read Judgment]

Tax-Evasion Case - Karti Chidambaram - Wife - Madras High Court - Taxscan

The Madras High Court on Tuesday rejected a petition by Congress MP Karthi P. Chidambaram and his wife, Srinidhi Chidambaram challenged the transfer of a tax evasion case filed against them before a lower court to a Special Court for MPs and MLAs.

The court also rejected another plea from both the petitioners to quash the complaint lodged by the I-T department in connection with the case. The matter relates to alleged non-disclosure of Rs 6.38 crore incomes by Karti and Rs 1.35 crore by his wife Srinidhi Chidambaram in 2015.

The petitioners, Karthi P. Chidambaram and his wife are assessees under the Income Tax Act, returns filed included income received by petitioners by way of sale of immovable properties i.e. lands in Muttukadu and sale consideration received for purchase was in cash but did not disclose it to Income Tax Department. The matter relates to alleged non-disclosure of Rs 6.38 crore incomes by Karti and Rs 1.35 crore by his wife Srinidhi Chidambaram in 2015.

The Deputy Director of I-T department, Chennai had filed a complaint on September 12, 2018, against the petitioners before the Additional Chief Metropolitan Magistrate Court-II (Economic Offences) for offences under sections 276 c (1) and 277 of the Income Tax Act.

Subsequently, the case was transferred to the Special court. Rejecting the arguments of the petitioner that he was neither an MP nor MLA as on the date of the alleged offence or when the complaints were lodged, Justice M Sundar said, “as Hon’ble Supreme Court has directed all pending cases to be transferred, this argument fails.” “Likewise, the argument that only one of the petitioners has become an MP is of no avail to petitioners, as Hon’ble Supreme Court has directed transfer of all cases involving sitting or former MPs and MLAs.”

On January 7, the special court dismissed the discharge application moved by the duo and directed the prosecution to proceed further with framing charges against the accused. Subsequently, Karti moved the high court challenging the dismissal. He also obtained an interim stay against the prosecution from framing charges against him and his wife. The high court judge refused to quash the complaints filed by the I-T department, concurring with their submission that they were not registered based on the assessments, but following searches made in one of the companies named Advantage Strategic Consulting Pvt. Ltd, in which Kathi is a Director, as informed to the Court.

The Court, while rejecting the plea of the department said, “the prosecution was by way of criminal complaints other than that of a police report. A careful reading of the complaints among others in the context of retraction submission of petitioners leaves no room for doubt that these were clearly matters for trial and no ground for quashing has been made out.”

The point regarding prosecution being launched on the basis of the statement of third parties (purchaser company) gets neutralised by the position of the prosecution that there was corroboration between soft copies seized from the company in which Chidambaram is a Director and the purchaser.

The point regarding prosecution being launched on the basis of the statement of third parties [purchaser company] gets neutralised by the position of the prosecution that there was corroboration between soft copies seized from the company in which Mr Chidambaram is a director and the purchaser.

“The court is of the considered view that issues that arise in the criminal complaints are matters for trial and no ground has been made out for quashing the same,” it said.

To Read the full text of the Judgment CLICK HERE
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