Justice N Satish Kumar of the Madras HC dismissed the Income Tax assessment proceedings against Sivaganga Member of Parliament Karti Chidambaran and Srinidhi Chidambaran stating that the proceedings filed were premature and could be initiated again after proper assessment.
The Deputy Director of the Income Tax Department had started the proceedings for alleged non-disclosure of certain cash transactions related to the sale of property near Muttukadu upto the amount of approximately Rs. 7 crores.
The court also held that the proceedings were invalid as only the assessing officer or the person he/she authorises can initiate the assessment proceedings. Under section 279 of the Income Tax Act, 1961 the Deputy Director can only sanction the complaint when there is concrete proof of failing to disclose transactions or the intention to evade tax.