HC orders notice to Deepa, Deepak in I-T’s appeals against Jaya

CHENNAI: A division bench of Madras High Court ordered notice to former Chief Minister J Jayalalithaa’s niece J Deepa and nephew J Deepak on three appeals filed by the I-T department against the award of the Income Tax Appellate Tribunal (ITAT) in favour of the demised AIADMK leader regarding the non-payment of income tax and wealth tax for the years 1996-1997 and 1997-1998.

The bench comprising Justice R Mahadevan and Justice Mohammed Shaffiq passed the direction on hearing the Income Tax department’s Standing Counsel Karthik Nandagopal.

Even as the ITAT passed the award in favour of the AIADMK supremo in September 2016 just three months before her death, the department filed these appeals only after the Apex Court convicted the former CM and her associate VK Sasikala in the Disproportionate Asset case in February 2017.

The IT had filed three appeals in connection with the I-T and Wealth Tax liabilities. Of them, the first one was pertaining to the amount of Rs.54.99 lakhs spent by Jayalalithaa for her foster son VN Sudhakaran in 1995 for his marriage. The I-T claimed it was not declared in her I-T filings in the 1996-1997 financial year. However, accepting the appeal prefered the Jayalalithaa, commissioner for IT appeals, set aside the notice issued by the I-T directing the assessment officer to initiate a fresh assessment.

Jayalalithaa informed the IT appeals commissioner that the amount was spent with the funding of 12 MPs and MLAs of her party. However, during the fresh assessment, the IT assessment officer found that the film art director Thotta Tharani and his assistant received the amount from Jayalalithaa for marriage decoration works and declared that Jaya had spent her own money of Rs.54 lakh for Sudhakaran’s marriage.

When Jaya made a second appeal, the commissioner for I-T appeals confirmed the assessment in 2008. Therefore, she approached the ITAT and got an award in favour of her in 2016.

The second appeal was against the deceased leader for not disclosing her income of Rs.8 lakhs from 1996-1997. The I-T assessed the amount on the basis of the ornaments offered by Jaya to her foster son’s betrothal function.

The IT had also made a third appeal against the ITAT’s award that set aside the order of the commissioner, IT (appeals) directing the wealth tax officer to re-assess the wealth of Jayalalithaa for the 1997-1998 financial years.

The tax department claimed that Jayalalithaa did not declare the wealth for that assessment year including the construction of a bungalow in poes garden for 58.42 lakh, the purchase of a farmhouse in Hyderabad for Rs.11.71 lakh, the value of gold jewels of 3.83 crores and her bank balance Rs.6.94 lakh.

Though these appeals were filed in 2018, I-T dept waited till the HC declared Deepa and Deepak as Jaya’s legal heirs in May 2020 to initiate the appeal. The IT sought the HC to condone their delay which was due to the COVID-19 pandemic.

The matter has been adjourned for two weeks.