Tax Case Against Former AIADMK Leader Sasikala Cannot Be Withdrawn, IT Dept To HC

Based on a Directorate of Vigilance and Anti Corruption (DVAC) report, the IT department had found her to have suppressed her real income for the assessment year 1994-95.

Chennai: The Income Tax department informed the Madras High Court on Wednesday that a tax appeal filed by the department against former AIADMK leader VK Sasikala in 2008 cannot be withdrawn as the Central Board of Direct Taxes had amended its 2018 circular regarding the withdrawal of appeals. 

According to a report in The Hindu, senior standing counsel for IT department TR Senthil Kumar submitted a copy of the amended circular before the second division bench of Justices TS Sivagnanam and Sathi Kumar Sukumara Kurup. 

The report said that tax cases should be contested only on merits and should not be withdrawn if addition to assessments were made based on information provided by the law enforcing agencies like Central Bureau of Investigation, Directorate of Enforcement and Directorate of General Goods and Services Tax, as per the amendment. 

In Sasikala’s case, the report said that based on a Directorate of Vigilance and Anti Corruption (DVAC) report, the IT department had found her to have suppressed her real income for the assessment year 1994-95. Even though the name of DVAC, which is a state agency, is not specifically mentioned in the amendment, DVAC’s report could be considered as an external source of a law enforcement agency, Senthil Kumar said, according to the report. 

The report further said that the second clause of the amendment said that tax cases could not be withdrawn if prosecution launched by the IT department was already pending before the court. 

The counsel, according to the report, said that the 2008 appeal launched by the IT department before the High Court  against an order passed in favour of Sasikala could not be withdrawn. 

After hearing the arguments, the court adjourned the hearing to next week.