Karti Chidambaram’s plea against transfer of tax evasion dismissed by Madras HC. - Synopsis
Abhishek Rathee 14 May 2020

In the case of Karti P. Chidambaram v. The Deputy Director of Income Tax, on Tuesday, the High Court of Madras dismissed a petition by Congress MP Karthi P Chidambaram and his wife challenging the transfer of a case of tax evasion brought against them to the Special Court for MPs  and the MLAs before the lower court.

It also dismissed a further appeal by the two petitioners to quash the complaint lodged by the I-T department in connection with the case.

The matter concerns the alleged non-disclosure of Rs 6.38 Crore income by Karti and Rs 1.35 Crore by his wife Srinidhi Chidambaram in 2015. According to the Income Tax Department, Karti was elected to Lok Sabha from the Sivaganga electoral district in 2019, and his wife received the sum in cash for the selling of land in Muttukadu near here years ago, but did not report it in their I-T returns.

On 12 September 2018, the Deputy Director of the I-T Department, Chennai, filed a complaint against the petitioners before the Additional Chief Metropolitan Magistrate Court-II (Economic Offences) for the offenses referred to in sections 276 c(1) and 277 of the IT Act.

The case was subsequently referred to the Special Court.

Rejecting the claims of the petitioner that he was neither an MP nor an MLA on the date of the alleged offence, or that the complaint had been lodged, Justice M Sundar said, “As Hon’ble Supreme Court has directed all pending cases to be transferred, this argument fails.”

“Likewise, the argument that only one of the petitioners has become an MP is of no avail to petitioners, as Hon’ble Supreme Court has directed transfer of all cases involving sitting or former MPs and MLAs.”

On 7 January, the Special Court rejected the motion for discharge filed by the duo and ordered the prosecution to seek further charges against the accused. Subsequently, Karti moved the High Court to challenge the dismissal. He also secured a temporary stay against the prosecution on the grounds of charges against him and his wife.

The High Court Judge refused to quash the complaints filed by the I-T Department, in compliance with their argument that they were not registered on the basis of tests, but on the basis of searches made in one of the companies called Advantage Strategic Consulting Pvt. Ltd, of which Kathi is the Owner, as notified to the Court.

In his final orders, the judge claimed that the case was a criminal complaint rather than that of a police report. Careful reading of the allegations, among others, in the sense of the retraction of petitioners leaves no room for doubt that these were simply matters for trial and there was no basis for a quash, he said.

The prosecution point initiated on the basis of the declaration of third parties (purchaser company) is neutralized by the prosecution stance that there has been corroboration between the soft copies confiscated from the company of which Chidambaram is the director and the purchaser.

Besides being a matter for trial, it falls on the basis that the case was focused solely on claims made by third parties (purchaser company).

“The court is of the considered view that issues that arise in the criminal complaints are matters for trial and no ground has been made out for quashing the same,” It quoted.

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