IT, ED raids Karti Chidambaram's firms for 'tax evasion' and 'financial irregularities'

Chennai: In a joint operation, IT and ED officials Tuesday searched two groups based in Chennai and Tiruchirappali of associates of Karti, whose father and former Finance Minister P Chidambaram accused the government of launching a "malicious onslaught" on his family.

Asserting that there was "no collateral purpose" behind its action, a late night press release issued by the CBDT in Delhi said the searches were based on "credible information of tax evasion" and "financial irregularities".

The CBDT said while certain "incriminating evidence indicative of tax evasion and financial irregularities have been recovered during the ongoing investigation, no political person or its family member are today shareholders or directors of the companies searched or surveyed by the Income Tax department."

While the Central Board of Direct Taxes release did not identify the companies searched, sources said the searches conducted on five premises in the two cities included a private eye care chain.

They said while the I-T had undertaken the action on charges of suspected tax evasion by these firms, the ED was a part of the searches in connection with their investigation under the provisions of the Foreign Exchange Management Act (FEMA).

Despite repeated attempts Karti was not available for comments.

Soon after reports of the searches were out, Chidambaram accused the government of a "malicious onslaught" launched by it against his family and said if it wants to target him, it should do so directly and not harass friends of Karti.

"If the government wishes to target me, they should do so directly, not harass friends of my son who carry on their own businesses and have nothing to do with politics," he said in a statement.

"My family and I are quite prepared to face the malicious onslaught launched by the government," Chidambaram said. 

The senior Congress leader said he was travelling and he has been informed about searches conducted on certain firms in Chennai allegedly linked to his son.

"We have made it clear, repeatedly, that no member of my family has any equity or economic interest in any of the firms that are being targeted.

"They are companies that are professionally managed and are capable of answering any questions that may be put to them by the authorities. I condemn the attempt to link them to my son and harass them on that ground," he said.

Chidambaram alleged that the agenda of the government is being implemented by an officer of the Enforcement Directorate who has a pending dispute with the Department of Revenue, Ministry of Finance.

"Orders in his case were apparently passed during the term of my predecessor. He met me and wanted me to intervene in his favour. I declined and I told him that I cannot reverse orders that were issued during the term of my predecessor.

"The change of government has given him an opportunity to misuse his powers to harass my son and his friends," he said.

The searches and surveys on a group based in Chennai and Tiruchirappalli and another private limited company in Chennai have been conducted strictly as per provisions of the Income Tax Act, the CBDT said.

"These are consequential to the on-going investigations. There is no collateral purpose behind such actions and no political person or his family member are today shareholders or directors of the companies searched or surveyed by the Income Tax department.

"Disclosure of information respecting assesses is prohibited except as provided in section 138 of the Income-tax Act, 1961," it said.

The investigation wing of the Income Tax department in Chennai has been conducting probe and as part of it, searches under section 132 (search) and surveys under section 133A (surveys) of the Income-tax Act, 1961 are being conducted at the residential and business premises of the key functionaries of the group.

Survey is also being conducted at the business premises of another private limited company in Chennai which has shareholding in a company of the aforesaid group.

"Certain incriminating evidence indicative of tax evasion and financial irregularities have been recovered during the on-going investigation. Further action as per law will follow," it claimed.