Supreme Court Issues Notice to Income Tax Department in 2018 Tax Evasion Case Against Karti Chidambaram and Wife [READ ORDER]

The Supreme Court on Monday (November 16, 2020) sought a reply from the IT Department to the pleas of Congress MP Karti Chidambaram and his wife challenging the transfer of a tax evasion case brought against them to the Special Court for MPs and MLAs before a lower court.

A notice to the I-T department was issued by the bench of Justices Ashok Bhushan and R Subhash Reddy on an appeal brought against the Madras High Court judgment by Karti, son of senior Congress leader P Chidambaram.

The petition is an appeal against a judgment of the Madras High Court which had rejected the plea by Karti and Srinidhi to quash two criminal charges under the Income Tax Act and the proceedings before the MP/MLAs special court.

The case involves the alleged non-disclosure by Karti of his Rs 6.38 crore income and Rs 1.35 crore by his wife Srinidhi Chidambaram in 2015.

Karti, elected to Lok Sabha from Sivaganga constituency in the 2019 elections and his wife had received the sum in cash for selling a property at Muttukadu but did not report it in their IT returns, stated by the Income Tax Department.

On September 12, 2018, the Deputy Director of the I-T Department, Chennai, filed a complaint with the Additional Chief Metropolitan Magistrate Court-II (Economic Offences) against them offenses under sections 276 c(1) and 277 of the Income Tax Act.

 According to the IT Department, Karti Chidambaram and his wife had received the amount in cash for the sale of land at Muttukadu near Chennai years ago but did not disclose it in their IT returns.

 Subsequently, the case was transferred to the Special Court.

On January 7, the Special Court dismissed the discharge application moved by the duo and directed the prosecution to proceed further with framing charges.

Subsequently, Karti Chidambaram moved the High Court challenging the dismissal. He also obtained an interim stay against the prosecution from framing charges against him and his wife.

In their appeal before the Supreme Court, Karti Chidambaram and Srinidhi have questioned the transfer of the case stating that the special court does not have the jurisdiction to try the case. 

Senior Advocate Kapil Sibal appearing for petitioners argued that the High Court misinterpreted the provisions of the Income Tax Act in relation to the creation of Special Courts.

Senior Advocate Sibal further added that all findings were in the petitioner's favor and that HC had decided the matter "only on prejudice."

Justices Ashok Bhushan and R Subhash Reddy also asked the petitioners of the case to serve a copy of the plea on Solicitor General, Tushar Mehta who entered an appearance on behalf of the IT department.

[READ ORDER]