The Madras High Court today dismissed an appeal by Income Tax Department, challenging a lower court order discharging N Sasikala, a close friend of Tamil Nadu Chief Minister Jayalaltihaa, in a case related to alleged flouting of I-T norms on purchase of property in 1999.
Bringing the curtains down on the decades-old case, Justice B Rajendran upheld the 2004 order of the Economic Offences Court-I here, discharging Sasikala from the case.
The matter relates to purchase of property of a pharmaecutical firm here at a busy Luz Corner commercial area here by Sasikala, her sister-in-law Ilavarasi and nephew V N Sudhakaran.
The Income Tax Department filed a case against them, alleging that they had not obtained No Objection Certificate or filed relevant forms before the department, as required.
Senior Special Public Prosecutor for the Department K Ramasamy submitted that they had purchased the property by entering into split agreements to circumvent I-T rules that prohibit purchase of property worth more than Rs 10 lakh without an NOC or filing the relevant forms.
The EEO-1 had discharged all of them after the Madras High Court had earlier remanded the case to the trial court, asking it to consider all the points raised by the department before passing orders.
The I-T department filed the present appeal against the discharge, arguing that when the character and nature of the property is one, resorting to 'split transaction' of six separate sale deeds was illegal.
He claimed that the trio failed to file Form 37(i), which attracts penal provisions of Section 269UC of Income Tax Act. Similarly, failure to obtain NOC as required under Section 269UL (2) of the Act is an offence under Section 276AB of the Act.
Contravention of these provisions carries jail terms for upto two years, besides fine, he had contended.
