The judges held that sanction had not been given in accordance with law.

The Madras High Court on Friday quashed sanction orders issued by an income tax official to prosecute Congress leader and former Union Minister P. Chidambaram’s wife Nalini Chidambaram, son Karti P. Chidambaram and daughter-in-law Srinidhi Karti Chidambaram under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

A Division Bench of Justices S. Manikumar & Subramonium Prasad also consequently quashed the private complaints lodged by I-T officials against the family before a Metropolitan Magistrate court in Chennai. The judges held that sanction had not been given in accordance with law.

In their affidavits, the petitioners contended that the Principal Director of Income Tax (Investigation) was not a competent officer to launch prosecution under Section 50 of the Act and, therefore, the complaint filed against them should be quashed. They also claimed that the Chief Metropolitan Magistrate (CMM) court in Egmore, Chennai, was not the designated special court under the Act.

“If any proceedings are initiated by the CMM based on the persecution complaint filed by the second respondent [Principal Director], who is incompetent to file the complaint, it will cause prejudice to the respondents. The petitioner does not have any undisclosed foreign asset and hence does not come within the purview of the Black Money Act,” the petitioners said in their identical affidavits.

The family had initially approached the High Court to restrain I-T officials from launching prosecution against them under the Act with respect to a property purchased by them jointly at a cost of £5.35 lakh at Cambridge in the United Kingdom. However, Justice T.S. Sivagnanam dismissed their plea in April last. It was after this I-T officials went ahead and launched the prosecution.