The Income Tax department on Wednesday opposed a plea in the Madras High Court by ousted AIADMK leader V K Sasikala seeking relief in a long-pending tax dispute citing the Rs one crore limit for appeals, saying a prosecution is pending before an economic offences court.
The department raised the objection when its appeal against an order of Income Tax Appellate Tribunal (ITAT) quashing a reassessment order related to 1994-95 assessment year came up for hearing before a bench comprising Justice Vineet Kothari and Justice R Suresh Kumar.
Sasikala's counsel submitted that the amount claimed by the IT department was less than Rs one crore, the limit set by the Central Board of Direct Taxes for appeal on tax disputes in high courts vide its August 8, 2019 circular, and hence she was entitled for relief.
The matter related to the assessment of the income of Sasikala, close aide of late Tamil Nadu chief minister J Jayalalithaa, for 1994-95. Orginally it was assessed for Rs 28.86 lakh.
But later in March, 2002 the Commissioner of Income Tax passed a reassessment order based on a report of the Directorate of Vigilance and Anti-Corruption in which it was alleged there was concealment of information by Sasikala regarding purchase of some immovable properties including 80 acres of land.
This was challenged by Sasikala before the ITAT which held that no additions can be made to assessment based on the DVAC report as the anti-corruption agency had only registered a complaint and the matter has not attained any finality.
The I-T department moved the high court against the ITAT order.
On Wednesday, the department submitted that the Rs one crore limit would not apply to this case as the prosecution against Sasikala was pending before the Economic Offences Court.
Its counsel sought two weeks time to ascertain the status of the prosecution before the lower court, following which the bench adjourned the matter till then.
Sasikala is now serving a four year imprisonment in a Bengaluru prison in a corruption case.