Income Tax Department files review plea in P Chidambaram family members' petition

The department has initiated prosecution for 'non-disclosure' of a property at Cambridge in the UK and with regard to certain investments in Nano Holdings LLC in the USA by the petitioners.

Published: 19th June 2018 01:17 AM  |   Last Updated: 19th June 2018 01:17 AM   |  A+A-

Former Union minister and senior Congress leader P Chidambaram. | AFP File Photo

By PTI

CHENNAI: The Income Tax Department today filed a review petition in the Madras High Court challenging an interim verdict asking it to provide copies of prosecution sanction order and its complaint to the family members of former union minister P Chidambaram, facing charges of not disclosing some foreign assets in their tax returns.

In another related development, the department also filed a counter to the petitions filed by Chidambaram's wife Nalini, son Karti and daughter-in-law Srinidhi and a firm, challenging the complaints filed on May 11 in a court here for alleged non-disclosure of assets in the 2016-17 returns.

The department has initiated prosecution for 'non-disclosure' of a property at Cambridge in the UK and with regard to certain investments in Nano Holdings LLC in the USA by the petitioners.

Passing the interim order on the petitions on June 12, the first bench comprising Chief Justice Indira Banerjee and Justice P T Asha had directed the I-T Department to furnish copies of the sanction order for prosecution against them under the black money act and the prosecution complaints lodged in a court here.

The petitioners, including Chess Global Advisory, a company linked to Karti, have challenged the prosecution, contending that the person who issued the sanction for prosecution was not the competent officer and the court in which the prosecution complaint had been filed was also not the competent forum.

In its review petition, filed on June 14, the department contended that the sanction order was an administrative order and had been filed along with the complaint in the Chief Metropolitan Magistrate (CMM) court.

It would be served on the assesses (petitioners) by the court concerned as per the procedure contemplated under the Criminal Procedure Code (CrPC) on their appearance pursuant to the summons, the I-T Department said.

It further submitted that the request of the assesses vide a May 14 letter to the Income Tax authorities to furnish the documents was rejected by an order on May 21.

They have not filed any petitions against the rejection order and the interim application filed by the assesses are beyond the scope of writ petition.

The I-T Department in its counter said that as per Section 55 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the Principal Commissioner of I-T was one of the authorities whose sanction was required for launching prosecution.

As amended later, the Principal Director of Income Tax or Principal Commissioner of Income Tax was one of the I-T authorities authorised to sanction prosecution.

The powers of the Principal Director of the I-T are co-terminus with that of the Principal Commissioner.

Hence, the contention of the petitioners that the Principal Director was not the competent officer had no merits, the counter said.

On the petitioners' argument that they had filed revised return of income disclosing the assets, it said the object of the black money act was not only assessment of total undisclosed foreign asset and income of an assessee, but also true and full disclosure of such assets to be disclosed voluntarily by a resident assessee in the returns.

It was consequent to the receipt of the I-T notice seeking details about the properties abroad that the petitioners filed the revised return, it submitted.

Even if the revised return replaces the original return for the purpose of assessment, the proceedings and events resulting in providing the cause of action leading up to the revised return do not get obliterated, the counter said.

The benefit under sect 139(1) under the I-T Act related to revised return was not available to the petitioners, who "deliberately omitted" to submit details of foreign assets, it claimed.

On the argument that the CMM court was not the competent forum, the counter said as per rules no court inferior to that of a metropolitan magistrate or magistrate of the first class shall try any offence under the black money act.

Since the prosecution complaint had been filed before the CMM court, the contention was not tenable on merits, it added.

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