Madras HC stays trial court proceedings in tax case against Srinidhi, Karti Chidambaram until jurisdictional challenge

The Madras High Court will hear on January 27 pleas filed by Lok Sabha Member of Parliament Karti Chidambaram and his wife Srinidhi for relief in tax re-assessment proceedings initiated by the Income Tax department.

Karti, the son of former Union Minister P Chidambaram, and his wife, face allegations that they had failed to disclose certain cash transactions for the sale of property in Muttukadu.

The IT department has reportedly alleged that the Chidambarams had not disclosed cash to the tune of Rs 1.35 crore for the sale of the property in their IT returns. Whereas the matter was initially before an economic offences court, it was later transferred to a special court for offences by MPs and MLAs.

On January 7, the special court dismissed pleas filed by the Chidambarams for discharge from the case. The special court was expected to take the matter up today for the framing of charges.

However, as an interim measure, Justice M Sundar today stayed the trial court proceedings, opining that the High Court should first decide on the question of its jurisdiction to deal with the matter.

In this regard, the Chidambarams have contended that the Sessions Court which is dealing with the matter does not have the jurisdiction to do the same.

Separate petitions to quash the IT re-assessment proceedings have also been filed. These petitions are yet to be numbered, Senior Advocate ARL Sundaresan stated today while appearing for the Chidambarams. Sundaresan also sought for the petitions to be taken up tomorrow.

Justice Sundar, however, eventually opined that he will hear all the connected matters i.e. the jurisdictional questions as well as the quash petitions together.

On being appraised that the trial court is due to frame charges in the matter today, the High Court also directed that the case before the trial court be stayed until after the High Court hears the case on January 27.

Have appeared for purchaser company, discloses Justice Sundar

Before taking up the matter today, Justice Sundar informed the Court that he had earlier appeared for the purchaser company as a counsel in an unconnected matter.

"... I want all counsels to give your undivided attention to what I am going to say", Justice Sundar said when the case came up.

He proceeded to state that after reading the case file, he came to know that he as appeared as legal counsel for the purchaser company. He further clarified that he had appeared for the entity on completely unconnected matters.

All the same, he sought for the counsel present on both sides to give their "considered" response on whether he should hear the case.

In response, all the counsel present unanimously responded that they had no objection to his hearing the case.

While agreeing the hear the matter thereafter, Justice Sundar also said that he would record the same "as a preamble" when he dictates the order in the case, so that the "disclosure is clear."

Earlier, Justice Anita Sumanth had recused from hearing the case on a request by the Income Tax department, since she had appeared as a counsel for Advantage Strategic Pvt Ltd. The IT department had revealed that they had based their re-assessment case based on documents recovered from this company.

The matter was eventually listed before Justice Sundar as a specially ordered matter, after a mention regarding the listing of the case was made before Chief Justice AP Sahi.