Chidambaram and Kin Charged Under Black Money Act by I-T Dept

The Chidambarams and the firm, on 27 April, had sent four separate replies denying claims of non-disclosure.

The Income Tax department on 11 May filed four chargesheets against former Union finance minister P Chidambaram's wife Nalini, son Karti, daughter-in-law Srinidhi and a firm under the Black Money Act for allegedly not disclosing their foreign assets.

The chargesheets or prosecution complaints have been filed by the department before a special court in Chennai under Section 50 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, officials said.

Nalini Chidambaram, Karti and Srinidhi, and a firm linked to Karti have been charged for allegedly not disclosing, either partly or fully,  immovable assets like the one at Barton, Cambridge in the UK worth Rs 5.37 crore, property worth Rs 80 lakh in the same country, and assets worth Rs 3.28 crore in the US, they said.

The chargesheets claimed that the Chidambarams, as also the firm in which Karti is one of the Directors — Chess Global Advisory, “did not disclose” these investments to the tax authority in violation of the black money law.

Chidambaram and Firm Refute Claims of Non-Disclosure of Assets

The Chidambarams and the firm, on 27 April, had sent four separate replies to the specified Income Tax department authority in Chennai, stating that they had not defaulted in disclosing these assets to the taxman, and in certain cases, they had revised their Income Tax returns to reflect the said overseas properties.

Omission, if any, in the original return under Section 139(1) was corrected in the revised return under Section 139(5) of the Income-tax Act. The original return and the  revised return were filed on the advice of her Chartered Accountant.

Karti’s wife Srinidhi said in a reply.

All the four, including the firm, in more or less similar replies, told the department that there was "no failure to disclose any information about the foreign assets, and certainly no wilful failure to disclose any information."

On the facts of the present case, it would be totally unreasonable and perverse to conclude there has been any wilful failure to disclose any information about the foreign assets. Hence, the present show cause notice deserves to be dropped.

The Chidambarams and the firm said 

The case pertains to the assessment year 2016-17.

The chargesheets are expected to be taken up by the court on 11 June.

The black money law was brought by the Modi government in 2015, as part of its drive to prosecute Indians who have stashed illicit wealth abroad.

The department had also recently issued notices to Karti and his family members in the case which they had challenged before the Madras High Court.

Karti had refused to join the probe, stating that he had already submitted the details of the assets and related transactions undertaken in 2017 to another tax authority, and that "parallel proceedings" cannot take place against an individual under the same law.

The writ petition was later quashed by the high court. Officials said the chargesheet has been filed as the investigation of the case had reached its “logical conclusion” and thus, it could be presented before the court.

The income tax department had slapped the Black Money Act on Karti in 2017 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 percent tax and penalty on undisclosed foreign assets and income, besides carrying a jail term of up to 10 years.

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