Madras HC refuses interim stay on case against PC’s kin under Black Money Act

Justice S Baskaran, who heard the plea, refused to pass any interim order. However, he directed the I-T to file a counter on the issues raised and posted the plea to June 5 for further hearing.

The I-T department on May 11 filed a complaint against Chidambaram’s wife Nalini, son Karti and daughter-in-law Srinidhi under Section 50 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act. for failing to disclose a property they jointly own in Cambridge, UK worth Rs 5.37 Crore.

Apart from this, the complaint by the I-T department also claimed that Karti had failed to disclose a bank account he holds with Metro Bank in UK and investments he had made in Nano Holdings LLC, USA. Besides this, Karti has also failed to disclose investments made by Chess Global Advisory, a company co-owned by him, the complaint said.

Based on this, the trio moved the high court contending that the Principal Director of Income Tax (Investigation) was not a competent officer to launch prosecution under Section 50 of the Act and therefore the complaint filed against them should be quashed. They also claimed that the Chief Metropolitan Magistrate (CMM) court in Egmore was not the designated special court under the Act.

Moreover, they do not have any undisclosed foreign asset and hence does not come within the purview of the Black Money Act, the petitioners said in their identical affidavits. Senior counsel A L Sundresan appearing for the petitioners said, “Law mandates that a special court must be established to hear cases under the Black Money Act. But so far, the state has not notified any such special court. Hence, if any proceedings are initiated by the CMM based on the persecution compliant, it will cause prejudice to the respondents.”

However, the standing counsel for I-T submitted that the plea moved by the trio is premature and that the proceedings have been initiated based on information provided by the CBI. It may be noted that Justice Sivagnanam in April had dismissed their initial plea to restrain the I-T officials from launching prosecution for the property purchased at Cambridge in UK, following which the case was taken further.