The Income Tax department on Monday told the Madras High Court that former Union Minister P. Chidambaram’s daughter-in-law Srinidhi Karti Chidambaram is not eligible to benefit from a circular issued by the Central Board of Direct Taxes (CBDT) for non-prosecution of cases in which tax implication was less than ₹50 lakh.

Justice N. Sathish Kumar was told by M. Sheela and N. Baskaran, Special Public Prosecutors for I-T cases, that the CBDT had issued yet another circular stating that the decision to not prosecute cases with lesser tax implication would not apply to individuals against whom prosecution had already been launched. The submission was made during hearing of individual criminal revision petitions filed by Sivaganga MP Karti Chidambaram and his wife challenging a special court’s refusal to discharge them from prosecution launched in 2018 for alleged non-disclosure of cash receipts in a property transaction that took place in 2015.

Senior Counsel P.S. Raman, representing Ms. Srinidhi Chidambaram, told the court that tax implication with respect to his client was only around ₹21 lakh even as per the I-T department and hence she was squarely eligible to be relieved from prosecution in view of CBDT’s decision to not prosecute cases with tax implications below ₹50 lakh.

However, Ms. Sheela replied that the circular referred to by the senior counsel would not be applicable to cases where prosecution had already been launched. After hearing both sides, the judge directed the I-T department to file it’s counter affidavit to the revision petitions as well as the additional grounds raised by the petitioners and adjourned further hearing of the cases to July 31.

The prosecution had been launched against the couple with respect to sale of a property at Muttukadu near here. It was the Income Tax department’s claim that the couple had received part payment of the sale proceeds in cash, when they sold their property to a private firm, but did not disclose it in their annual income tax returns.

The prosecution was initially launched before a Metropolitan Magistrate court. However, the High Court, on its administrative side, transferred the prosecution to a Special Court for hearing cases against Members of Parliament and Members of the Legislative Assembly after Mr. Karti Chidambaram won the 2019 Parliamentary elections.

Though the couple had challenged the transfer and also filed petitions to quash the entire prosecution against them, Justice M. Sundar dismissed both their pleas in May this year and said they should face the trial to prove their innocence. It was thereafter that the couple had approached the High Court again with the present revision petitions.

No urgency

Mr. Raman told the High Court that there was no urgency in hearing the revision petitions since nothing much was happening before the Special Court for cases against MPs and MLAs due to the lockdown to fight COVID-19. He said, the petitions could be taken up for hearing leisurely after normalcy gets restored and all courts begin physical functioning.

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