HC Rejects Plea of Chidambaram's Kin Against Sanction of I-T Prosecution Under BMA

Chennai, Apr 12 (PTI) The Madras High Court today dismissed prayers of three family members of former Union Minister P Chidambaram seeking to prohibit the Income Tax department from sanctioning any prosecution against them under the Black Money Act (BMA).

When the petitions filed by Nalini, wife of Chidambaram; Karti Chidambaram and his wife Srinidhi came up, Justice T S Sivagnanam refused to accede to their prayers to prohibit the sanctioning of prosecution by the I-T department for alleged economic offences, against them.

Two petitions were filed separately by Nalini and Srinidhi seeking a direction to the I-T officials not to sanction any prosecution under the Act.

While another petition by Karti sought a direction to the I-T authorities to pass orders pursuant to the notices issued on various dates under the Act and the replies furnished by him thereon.

In his order, the judge said, "The Income Tax department is directed to pass orders in accordance with the provisions of Black Money (Undisclosed Foreign Income and Assets) and imposition of Tax 2015 (Act 22 of 2015) within the time line fixed under the Act."

So far as the writ petitions seeking prohibition of prosecution is concerned, the prayer cannot be granted and they stand dismissed, he said.

When the matter came up, the counsel for I-T opposed the plea saying the department had initiated the proceedings based on information provided by CBI.

To this the judge said, the petitioners are ready to cooperate with the enquiry, but they apprehend sanctioning of prosecution for economic offences.

I-T's counsel then said, issuing notice under the Black Money Act and sanctioning prosecution are two different aspects.

The department can sanction prosecution notwithstanding pending inquiry on assessment. The Act does not prohibit the department from doing so, the counsel contended.

The Income Tax department had issued notices to all three petitioners seeking details of the documents in respect of the property in Cambridge, UK, and with regard to certain investments in Nano Holdings, LLC USA on various dates.

Stating that they had already filed returns with details for the assessment years 2015-16 and 2016-17, they submitted that despite the explanation and submission of particulars sought by the authorities, no orders have been passed on the notices.

Alleging that they have been subjected to harassment for the last 3 years by the central agencies, the petitioners submitted that multiple searches were conducted by the CBI and the Enforcement Directorate, under Foreign Exchange Management Act and Prevention of Money Laundering Act.

Though they have established beyond reasonable doubt that they do not possess black money and have no undisclosed foreign asset, the petitioners apprehended that they may be subjected to malicious prosecution.

As part of the design to harass and humiliate the petitioners the Income Tax Authorities will invoke and launch prosecution proceedings even before orders are passed by the assessing officers under section 10(3) of the Black Money Act, they said.

Hence the petitioner prayed for a direction to prohibit IT authorities from sanctioning any prosecution against them.

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