The Madras High Court today stayed the Income Tax Department's notices issued to former finance minister P Chidambaram...

The Madras High Court today stayed the Income Tax Department's notices issued to former finance minister P Chidambaram seeking reopening of assessment of his I-T returns for 2011-12 as it suspected that his income chargeable to tax had escaped assessment.Hearing a petition by Chidambaram, Justice T S Sivagnanam granted the interim stay on the proceedings pursuant to the notices dated March 27, 2018 and May 23, 2018 issued by the Assistant Commissioner of Income Tax, Chennai, for re-opening the assessment. 

P Chidambaram

Directing the I-T authorities to file their counter within six weeks, the Judge posted the matter to July 16 for further hearing.The judge had quashed similar I-T notices issued to Chidambaram pertaining to the assessment years 2009-10 and 2010-11 in November last year and January this year.When the current petition came up for hearing, Justice Sivagnanam noted that the factual issue was identical to that of the earlier assessment years.

Justice Sivagnanam

On the issue of reopening of assessment for 2009-10 and 2010-11, the court was convinced that it was not justified and had quashed the notices allowing the Congress leader's plea.The juge today noted that though the I-T department had filed appeals against the orders quashing the notices, they had not yet been stayed by the division bench hearing them."Therefore this court is of the view that the present impugned proceedings shall remain stayed till the department obtained orders from the first bench, hearing the appeals," Justice Sivagnanam said. 

Chidambaram in his petition submitted that he had been selling raw coffee grown in his estate in Karnataka without curing and has been claiming exemption of the sale proceeds as agricultural income. Accordingly, for the assessment year 2011-12, he had claimed exemption of Rs 43.37 lakh as agricultural income under section 10(1) of Income Tax Act.

Income Tax

However, the I-T department issued a notice dated March 27, 2018 under section 148 of the Income Tax Act stating that it had reason to believe that income chargeable to tax for the AY 2011-12 had escaped assessment.After a communication by his Charted Accountant, the department by a letter dated May 23 last gave the reasons for the reassessment, he said.Contending that the reassessment notice was illegal and without jurisdiction, Chidambarm prayed the court to quash it.