The Supreme Court on Tuesday said it will examine the income tax department’s appeals against the Madras High Court order that quashed criminal prosecution against senior Congress leader P Chidambaram’s family in cases allegedly related to non-disclosure of overseas assets and bank accounts held by them.
A bench led by Chief Justice Ranjan Gogoi, while refusing to stay the HC order, sought response from Chidambaram’s wife Nalini and their son Karti, who is contesting the Lok Sabha elections from Sivaganga constituency in Tamil Nadu, and their daughter-in-law Srinidhi and Chess Global Advisory Service, a company co-owned by Karti.
Solicitor General Tushar Mehta, appearing for the department, sought a stay of the HC order dated November 2, 2018, on various grounds, including that it can be used by other accused to avoid criminal prosecution in cases related to black money.
However, the Bench said any stay at this stage would amount to allowing the appeal of the department. “While we decline the prayer for stay, as the same would amount to grant of final relief, we make it clear that as the impugned judgment is under scrutiny of this court, until appropriate orders are passed, the same shall not be taken as precedent,” the apex court said in its order.
The revenue authorities stated that the three assessees had not disclosed a property they jointly owned in Cambridge, UK, worth `5.37 crore as per their income tax returns and this amounted to an offence under the Black Money (Undisclosed Foreign Income and Assets) Act and Imposition of Tax Act.
Besides, Karti did not disclose an overseas bank account he held with Metro Bank in the UK and investments he had made in Nano Holdings LLC, USA, they added. Karti also failed to disclose investments made by Chess Global which also amounted to committing an offence under the Black Money Act, the department said, adding that the assessees cannot be allowed to revise their tax returns.
The HC, in its judgment, had stated that that the foreign asset in each case was acquired with money that was disclosed in the books of account of the assessee (and tax paid) and which was remitted through banking channels under 2004 schemes approved by RBI. “There is no allegation of black money or unaccounted money or money that has escaped tax or money that was remitted through illegal channels… We are of the considered view that Section 55 Block Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 is not attracted. There was no failure to furnish any information relating to any foreign asset or investment,” the HC said, adding that the company had filed the original return of income, as well as the revised return of income within the time stipulated under the Income Tax Act, 1961.
“An assessee can file a revised return of income or even more than one revised return of income under Section 139(5) of the 1961 Act as long as it is filed within time. Revised return of income is the only relevant return of income that can be relied upon or referred to. Revised return of income obliterates or effaces any earlier return of income…” the HC had said, ruling in favour of Chidambarams.