In a relief to P Chidambaram, the Madras High Court quashed an order of the Income Tax department seeking payment of tax by the former finance minister and his family on income from a coffee estate owned by them for 2008-09 financial year after re-assessing it. Justice T S Sivagnanam yesterday quashed March 31, 2016 demand notice and the consequential December 30 reassessment order issued by the assistant commissioner of Income Tax, Chennai, seeking payment of about Rs 6 lakh from Chidambaram and others.
He was allowing petitions by Chidambaram and his family members challenging the notice and the re-assessment order. The matter relates to the petitioners claiming exemption of entire income from 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, which was allowed then. The I-T department had issued the demand notice saying there was reason to believe that income chargeable to tax had escaped assessment.
Challenging this, the petitioners 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 and made only with an intention to defame them. Besides Chidambaram, the senior Congress leader's son Karti, daughter-in-law Srinidhi and wife Nalini are the other petitioners.
They submitted that income ...