The Madras High Court quashed the Income Tax Proceedings Against former Finance Minister, P Chidambaram’s son, Karti Chidambaram, and his Wife, Srinidhi Chidambaram over Non-disclosure of Cash Transactions.
The prosecution case was that Karti, the Congress Member of Parliament, representing Sivaganga, and his wife Srinidhi received Rs.6.38 crore and Rs.1.35 crore in cash, respectively, through the sale of land owned by them near Muttukadu.
However, they had neither disclosed the same in their assessment nor paid taxes for the income.
The Income Tax department initiated criminal prosecution for alleged non-disclosure of income by them to the tune of Rs.7.73 crore for 2015-16 fiscal.
Challenging the same, the petitioners 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.
The Single Judge Bench of Justice N Sathish Kumar while Granting liberty to the department to initiate penal action as per law, if it chooses to, said that the prosecution launched by the Deputy Director is not maintainable and is 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,” the court said.
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