The Supreme Court Tuesday agreed to hear the Income Tax department’s appeal challenging the Madras High Court order which quashed criminal prosecution against senior Congress leader P Chidambaram’s family members under the black money law.
The top court, however, refused to stay the order of the high court.
A bench of Chief Justice Ranjan Gogoi and Justice Sanjiv Khanna issued notice to Chidambaram’s wife Nalini and their son Karti, who is contesting Lok Sabha election from Sivaganga constituency in Tamil Nadu.
The bench also sought reply from Karti’s wife Srinidhi and others in the case.
The high court had quashed criminal prosecution initiated by the I-T department under the Black Money Act against the three.
Solicitor General Tushar Mehta, appearing for the I-T department, sought stay of the high court order of 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.
To this, the bench said that granting stay at this stage without hearing the other side would amount to allowing the appeal of the I-T department.
The Solicitor general further said that if the stay is not granted then other high courts may quash the criminal prosecution against similarly placed accused under the black money law and urged that the November order of the high court should not be treated as a precedent.
The bench said that it will not be treated as a precedent as the high court would be cognizant of the fact that the apex court is seized of the matter and is scrutinizing the Madras High Court order.
The issue relates to alleged non-disclosure of overseas assets and bank accounts held by the trio.
According to the I-T Department, the three had not disclosed a property they jointly owned in Cambridge in the UK worth Rs 5.37 crore in their returns which amounted to an offence under the Black Money (Undisclosed Foreign Income and Assets) Act and Imposition of Tax Act.
It also alleged that Karti did not disclose an overseas bank account he holds with Metro Bank in the UK and investments he had made in Nano Holdings LLC, USA.
He had also “failed” to disclose investments made by Chess Global Advisory, a company co-owned by him, which amounted to committing an offence under the Black Money Act, the department had said in its complaint in the special court in May last year.
On the issue, Karti’s spokesperson said the I-T department had alleged that a house property was not disclosed in the I-T returns of Karti Chidambaram and his family members.
“The I-T department’s complaint was challenged in the Madras High Court. The High Court quashed the complaint as baseless and illegal,” he said, adding that Karti and others will appear in due course and contest the case.
New Delhi: The Enforcement Directorate on Wednesday opposed in a Delhi court the anticipatory bail plea of former Union minister and Congress leader P Chidambaram in the Aircel-Maxis money laundering case and sought his custodial interrogation.
ED, which filed its response to the anticipatory bail plea of Chidambaram, said that he has remained evasive and was not cooperating in the probe.
The hearing on Chidambaram’s plea will take place before Special Judge O P Saini on Thursday.
The court had on October 8 extended till November 1 the interim protection from arrest granted to Chidambaram and his son Karti in the Aircel-Maxis case filed by the CBI and the ED.
Chidambaram ahd filed the plea for protection from arrest in the ED case on May 30 this year after which he got relief from the court on various occasions.
The agency on October 25 had filed charge sheet against Chidambaram in the Aircel-Maxis money laundering case, accusing him of conspiring with foreign investors to clear their venture.
New Delhi: A Delhi court today granted two months time to the CBI for obtaining sanction from authorities concerned to prosecute certain accused in a case against former Union minister P Chidambaram and his son Karti for alleged irregularities and criminal conspiracy in the Aircel-Maxis deal case. The agency had on July 19 filed charge sheet against the Congress leader, his son Karti, 10 individuals, including public servants, and six companies as accused in the case.
Special CBI Judge O P Saini allowed agency’s request to grant time after senior advocate Sonia Mathur told the court that sanctions are awaited. “Adjourn the matter for October 1,” the court said. Mathur, who appeared on behalf of the Central Bureau of Investigation, told the court that the agency was expecting sanctions for prosecution from concerned authorities in about four weeks.
The CBI is probing as to how Chidambaram, who was the Union finance minister in 2006, granted a Foreign Investment Promotion Board (FIPB) approval to a foreign firm, when only the Cabinet Committee on Economic Affairs (CCEA) was empowered to do it. The senior Congress leader’s role has come under the scanner of investigating agencies in the Aircel-Maxis deal of Rs 3,500-crore and the INX Media case involving Rs 305 crore.
In its charge sheet filed earlier in the case against former telecom minister Dayanidhi Maran, his brother Kalanithi Maran and others, the agency had alleged that Chidambaram had granted an FIPB approval in March, 2006 to Mauritius-based Global Communication Services Holdings Ltd, a subsidiary of Maxis. The Maran brothers and the other accused named in the CBI charge sheet were discharged by the special court, which had said the agency had failed to produce any material against them to proceed with the trial.
New Delhi: The Supreme Court today agreed to hear tomorrow a fresh plea of BJP leader Subramanian Swamy seeking to implead himself as a party in a petition filed against an Enforcement Directorate officer probing the Aircel-Maxis deal case. A vacation bench comprising justices Arun Kumar Misra and S K Kaul also agreed to hear the plea of ED officer Rajeshwar Singh that contempt proceedings be initiated as attempts have been made to thwart the ongoing investigation in the Aircel-Maxis case.
Recently, a fresh petition was filed by one Rajneesh Kapur alleging that Singh, the investigating officer in the Aircel-Maxis case, has amassed disproportionate assets beyond the known sources of his income.
Swamy, who had earlier moved the apex court for expeditious investigation in the Aircel-Maxis case, has sought court’s direction for making himself as a party in the fresh plea filed by Kapur against the ED official.
Earlier, on June 20, Justice Indu Malhotra recused herself from hearing in the matter without assigning any reason.
The apex court had on March 12 set a deadline of six months for the CBI and the ED to complete the investigation into the alleged irregularities in FIPB approval given in the Aircel-Maxis deal case in which former finance minister P Chidambaram and his son Karti have been questioned by probe agencies.
Chennai: The Madras High Court granted anticipatory bail to Karthi Chidambaram, son of former Union Minister P Chidambaram in connection with the warrant issued against him by the Income tax department under the Black Money Act for allegedly not disclosing foreign assets in a late night hearing.
The court on Saturday also directed the I-T department to keep in abeyance the warrant issued against him until he returned from his trip abroad.
Karthi Chidambaram gave an written undertaking to appear before the concerned IT official on June 28.
Apprehending arrest following issuance of warrant, Karthi Chidambaram’s counsels, A R L Sundaresh and Satish Parasaran, knocked on the doors of the official residence of Chief Justice Indira Banerjee late last night.
However, they were instructed to approach the concerned portfolio judge with the anticipatory bail petition.
On being informed that a bail application has been filed before Justice A D Jagadeesh Chandra, the IT department’s counsel AP Srinivas appeared at the judge’s residence along with an IT official.
During the midnight hearing at the judge’s residence, the I-T department said three summons had already been issued to Karthi Chidambaram directing him to personally appear before it to record his statement in connection with the probe into alleged non-disclosure of assets abroad.
Since he did not do so, a warrant was issued by the department under Section 8(1) of the Black Money Act, the counsel said.
The warrant was served by the city police to secure his presence and to appear before the concerned IT official.
Hence, Karthi Chidambaram moved the High Court at around midnight seeking anticipatory bail.
A copy of the bail plea was served to the counsel for the I-T department, as well as the official who accompanied him.
The counsel for I-T dept then submitted that Karthi had already got permission from the Supreme Court on May 18, 2018 to travel abroad.
He had already filed an affidavit before the Apex Court stating that he would like to go abroad on Sunday (today).
Referring to the top court order, Karthi Chidambaram submitted that he had already made arrangements to go abroad with his wife and daughter, but that the warrant was issued by the I-T department in the meantime.
To this, the I-T department submitted that the warrant was issued as he has not appeared pursuant to the summons issued.
The department said it would keep the warrant in abeyance if Karthi Chidambaram gave an undertaking to appear before the official concerned on his return on the stipulated date.
Accordingly, Karthi Chidambaram gave a written undertaking that he would appear before the official on June 28.
Recording it, the judge directed the I-T department to keep the warrant in abeyance and ordered it to inform the police station concerned of the same and closed the petition.
The income tax department had slapped the Black Money Act on Karti last year after it found that assets created by him abroad were in alleged violation of law
The new anti-black money law deals with cases of overseas illegal assets, which till recently were probed under the Income Tax Act, 1961.
The new legislation has provisions for a steep 120 per cent tax and penalty on undisclosed foreign assets and income, besides carrying a jail term of up to 10 years.
Senior Congress leader P Chidambaram appeared to have a premonition of the arrest of his son Karti when he filed a petition recently in the Supreme Court apprehending “continued harassment” to him and his family members.
Karti was arrested by the CBI today on his arrival from London, even before Chidambaram’s petition could be listed for hearing by the top court.
Chidambaram, who has been closely monitoring the case of his son in the Supreme Court which is argued by his party colleague and senior advocate Kapil Sibal, had sprung a surprise last week by filing a petition on his own accusing the CBI and the ED of carrying out a political vendetta against him and his family.
In his petition, Chidambaram has sought the apex court’s direction prohibiting the CBI and Enforcement Directorate (ED) from continuing their “illegal investigations” and from acting in any manner “causing repeated harassment” to him and his family members, including his son.
However, the CBI swung into action by arresting Karti today even before the petition was heard by the top court.
In his plea, Chidambaram, himself a senior advocate, has said that the position in the INX Media case was “worse” as, though the CBI had lodged an FIR in May 2017, the probe agencies have not filed any report “concluding that any criminal offence had been committed or that any proceeds of crime had arisen out of that criminal offence”.
An FIR, filed by the CBI on May 15 last year, had alleged irregularities in the Foreign Investment Promotion Board (FIPB) clearance to INX Media for receiving overseas funds to the tune of Rs 305 crore in 2007 when Chidambaram was the Union finance minister.
While the CBI has alleged that Karti had received funds to the tune of Rs 10 lakh in the case, the ED has also registered a money laundering case in the matter.
Chidambaram, in his petition before the apex court, has said that his fundamental rights were being violated due to “illegal” investigations being carried out by the CBI and the ED and the central government has been “misusing” its probe agencies.
He has said that being the Finance Minister then, he had granted FIPB approvals in the INX Media case and the Aircel-Maxis case in the “normal course of official business”. In discharge of his functions, he has “never allowed any member of his family, including his son, or any other person to interfere with or influence the conduct of official business”.
Chidambaram has said that the CBI and ED cannot “harass” Karti and others, who were totally unconnected with the FIPB approval by issuing repeated summons to them.
“The petitioner (Chidambaram) feels sad that his son and his business friends are being targeted,” the plea said, adding, “The entire investigation being conducted by the CBI and ED is a total farce and is being made only to malign the name of the petitioner and his son in the eyes of the public”.
He has also sought the apex court’s direction declaring that the proceedings emanating from FIR registered by CBI in the INX Media case as well as the “premature investigation” being conducted by the ED, were “without jurisdiction, an abuse of authority, and violative of Articles 14 (equality before law), 19 (freedom of speech and expression) and 21 (right to life and personal liberty) of the Constitution which inhere in the petitioner and the members of his family, and declare the said proceedings and investigations as null and void”.
Senior Congress leader P Chidambaram has approached the Supreme Court seeking protection of his fundamental rights, including the right to privacy, amid summons to his son Karti Chidambaram and raids by the CBI and the ED in connection with cases related to Aircel-Maxis and INX Media.
Chidambaram, who is also a senior advocate, has claimed in his plea that as part of “political vendetta”, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) have made “vexatious” searches and issued repeated summons in these cases.
“The writ petition is being filed to defend and protect the petitioner s fundamental rights under Article 14 (equality before law), 19 (freedom of speech and expression) and 21 (right to life and personal liberty) of the Constitution and to defend his right to privacy and the right to live, along with members of his family, in dignity,” the petition said.
“The CBI and the ED, as part of political vendetta, have made vexatious searches, issued repeated summons, unreasonably questioned persons for unconscionably long hours, unlawfully attached fixed deposits, maliciously leaked false information to the media and otherwise caused extreme harassment, anguish and humiliation to me and my son, and to other persons who are normal business and social friends of my son, Chidambaram said.
The Congress leader said that both he and his son have categorically denied any wrongdoing in the Foreign Investment Promotion Board (FIPB) approvals in these cases.
“Every government officer who has been examined by the CBI/ED has categorically stated that the approvals granted in these two cases were entirely in order, he said.
The former Union finance minister also said that he was the “real target” of these “motivated actions” of the CBI and the ED, but these agencies have not accused him or other public servants of any offence in these cases.
Chidambaram raised a legal issue asking whether without an FIR naming him or his son, the CBI or the ED could probe the alleged offences against them.
He sought the top court’s direction to prohibit these two agencies from continuing with “illegal” probe and acting in any manner causing repeated harassment to him, his son and family members.
An FIR, filed by the CBI on May 15 last year, had alleged irregularities in the FIPB clearance to INX Media for receiving overseas funds to the tune of Rs 305 crore in 2007 when Chidambaram was the Union finance minister. The ED has also registered a money laundering case.
The CBI is also probing the alleged irregularities in grant of the FIPB clearance to the Aircel-Maxis deal in 2006.
The CBI today told the Delhi High Court that it has arrived at “some conclusion” with regard to a plea alleging that a woman, related to former Union minister P Chidambaram, had grabbed a hotel in Tamil Nadu in collusion with the officials of a public sector bank.
The agency, however, sought time to file in response on the ground that the complaint on the issue was of 2007 and some clarifications had to come from Chennai.
The Central Bureau of Investigation’s standing counsel Rajdeepa Behura submitted that the agency has sought the clarifications from the CBI’s unit there as the case related to that state.
“The agency has arrived at some conclusion. We are only waiting for the clarifications from Chennai. Once these come to us, we will incorporate the same and file our status report in the court,” the agency’s counsel told Justice Vinod Goel.
Behura, however, did not elaborate as to what “some conclusion” the CBI had arrived at.
The court fixed the matter for further hearing on December 8.
The CBI’s response came on the petition filed by K Kathirvel, a doctor by profession who was running the hotel in partnership with his associates, including Padmini, sister of Chidambaram’s wife Nalini, accused of grabbing the property in collusion with Indian Overseas Bank (IOB) officials.
Earlier, the court had issued notice to the CBI and had sought a status report with regard to the complaint lodged by Kathirve.l
The court had asked the probe agency to inform it about the action taken so far.
Kathirvel has alleged in his plea that he had filed a complaint with the CBI in September 2016 against Chidambaram, his family members and top officials of the IOB for allegedly grabbing his hotel, but the agency had not yet taken any step.
The petitioner has said he had filed the complaint with the CBI director after the CBI’s Tamil Nadu unit showed reluctance to entertain it.
According to his complaint, in 2007, the ‘Comfort Inn’ hotel in Tirupur, in which he was a partner, was grabbed by them with the help of the top management of the IOB.
Arguing for Kathirvel, his counsel Yatinder Chaudhary, had said that this was a clear case of abuse of power by the former Union minister’s family using banks to grab the properties.
He had contended that even after clearing the dues, the bank went on with a “mock auction” to allot the hotel to Padmini.
The hotel was worth more than Rs 10 crore and had a loan due of Rs 2.5 crore with the IOB which had declared the loan as a non-performing asset and announced an auction, the complaint has said.
Kathirvel has said he had approached the Madras High Court and later the Debt Recovery Tribunal, besides paying Rs 64 lakh ($96,000) to the IOB to avoid auction.
After receiving the amount, the bank had promised cancellation of the auction, he has claimed.
He has alleged that the bank cheated him and conducted a “farce auction” and allotted the hotel to Padmini at a very “cheap” price of Rs 4.5 crore.
The Madras High Court today stayed all proceedings against former Union minister P Chidambaram and his family members pursuant to a demand notice issued by the Income Tax department last year relating to income from a coffee estate owned by them for the 2008-09 financial year.
Justice Rajiv Shakder passed the interim order on petitions by Chidambaram, his wife Nalini and son Karti challenging the March 31, 2016 demand notice and consequential reassessment order dated December 30 last issued by the Assistant Commissioner of Income Tax, Chennai.
“Pending adjudication of the writ petitions, the further proceedings pursuant to the demand notice are stayed,” the judge said and adjourned the hearing to March 16 next.
The matter relates to the petitioners claiming exemption of entire income from the sale of coffee and pepper from their estate in Coorg in Karnataka in 2008-09 as agricultural income under section 10(1) of the Income Tax Act.
The I-T department last year had issued the demand notice claiming about Rs six lakh from the petitioners after reassessing the income for the period.
The counsel for senior Congress leader Chidambaram and others alleged that the I-T department’s action in reopening the assessment and reassessing the income for 2008-09 six years later was illegal and arbitrary.
Counsel Vijay Narain alleged that it had been made only with an intention to defame the petitioner and his family.
Stating that the petitioners had only sold raw coffee seeds, he argued that the income from the sale would attract tax only if they were involved in curing coffee.
He said Chidambaram had inherited the 200-acre estate from his grandfather in 1956. It was later partitioned into five units of 40 acres each in the names of Chidambaram, his wife, son, daughter-in law and grand daughter.
Coffee and other crop grown in the estate were continuously generating agriculture income and had been exempted from Income Tax since then, he said.
The petitioners said coffee grown in their estate was sold as raw coffee after pulping and drying and the process involved no curing of seeds.
Further, they said under rule 7B(1) of the Income Tax Rules, income derived from the sale of coffee grown and cured by the seller in the country shall be computed as if it were income derived from business and 25 per cent of such income shall be deemed to be income liable to be taxed.