PTI, CHENNAI: The Madras High Court today granted interim stay on petitions filed by former Union minister P Chidambaram and his family seeking quashing of a notice issued under the Income Tax Act for reopening of the assessment for the year 2010-11. Chidambaram’s family had earlier got a reprieve from the high court in connection with reopening of the IT assessment for 2009-’10.
The petitions challenging the notice issued by assistant commissioner of Income Tax, Chennai for reopening of the assessment for 2010-11 came up before Justice T S Sivagnanam. The judge, in his order, said, “In the light of the fact in respect of the previous assessment years the petitioners challenged reopening proceedings with identical facts were involved and that this court allowed the said writ petitions, the petitioners have made out prima facie case for grant of interim stay.
“Accordingly there will be an order of interim stay.” Chidambaram’s family had filed four writ petitions challenging the notice issued for the reopening of the 2010-11 2010-11 under Section 148 of Income Tax Act. According to Chidambaram and his family members, they grow coffee and after pulping and drying, sell the coffee as raw coffee and the process of pulping and drying is completely different from curing and mere pulping and drying the coffee seeds does not result in cured coffee.
Proceeds of sale of raw coffee are an agricultural income exempted under Section 10(1) of the Act. In case of sale of cured coffee, 25 per cent of the income is subjected to tax as business income under Rule 7B(1) of the Income Tax Rules, they said.
