Sources close to Chidambaram said his wife Nalini was engaged as senior counsel by the junior counsel of the Income Tax Department.
She appeared for the department and not against the department. The engagement was without the Finance Minister's knowledge. The CBDT issued a statement regretting the embarrassment caused by the engagement, they said.
They were reacting to a statement in this regard by External Affairs Minister Sushma Swaraj in the Lok Sabha while she intervened during a discussion on the Lalit Modi controversy.
The sources also said Nalini Chidambaram was counsel for a woman in a Saradha scam case. She advised her in a transaction that was being negotiated. Finally, she advised her client against going through with the transaction.