VG Siddhartha is the son-in-law of former Karnataka Chief Minister SM Krishna.

The Income Tax Department on Tuesday denied charges of harassment during its probe against Cafe Coffee Day promoter VG Siddhartha as it pointed out that his available signature was different from that on a letter being circulated on social media.

It said the businessman had admitted holding stash income after raids were conducted against him.

In the unverified letter, VG Siddhartha, who has gone missing on his way to Mangaluru from Bengaluru in Karnataka, said he faced a lot of harassment from tax officials in the form of attaching "our shares on two separate occasions to block our Mindtree deal and then taking position of our Coffee Day shares, although revised returns have been filed by us (sic)".

"This was very unfair and has led to a serious liquidity crunch," the letter, bearing a purported signature of VG Siddhartha, said.

Refuting the charges, the tax department said in a statement that the provisional attachment of shares was made by the department to protect the "interests of revenue", a norm in cases of large tax evasion, and the action was based on "credible evidence" gathered in the search action that was undertaken against the Bengaluru-based group in 2017.

"The department has acted as per provisions of the Income Tax Act," it said.

The authenticity of the note circulating on social media cannot be vouched for as VG Siddhartha's signature "does not tally" with what is available with the department in the form of annual reports of the company, it said.

The statement said he got Rs 3,200 crore from the sale of Mindtree shares, but has paid only Rs 46 crore out of the total Rs 300 crore minimum alternate tax (MAT).

"As against the balance MAT liability of Rs 250 crore and tax liability based on search findings to the tune of about Rs 400 crore, the attachment made by the department is less than 40 per cent of the likely tax liability," it said.

The raids against the group were carried out as a result of a similar action against a prominent Karnataka politician and VG Siddhartha, in a sworn statement, "admitted" unaccounted income of Rs 362.11 crore and Rs 118.02 crore in his hands and that of Coffee Day Enterprises Ltd respectively, it said.

A Singapore citizen was searched in this case and he was found with unaccounted cash of Rs 1.2 crore and the person told tax officials that it belonged to VG Siddhartha, the department claimed.

It alleged that the CCD promoter filed his IT returns but "did not" mention the undisclosed income, as admitted in the sworn statement, in both the cases except an amount of around Rs 35 crore in his individual case.

"Even on this admitted sum, Coffee DAY Global Ltd has not paid the self-assessment tax of Rs 14.5 crore on the returned income. Coffee Day Enterprises Ltd did not offer the admitted income in its part," it said.

It said the department got to know through media reports in January that Siddhartha was planning to sell the equity shares of Mindtree Ltd, held by him and his company, on an immediate basis.

Tax officials found that Siddhartha and Coffee Day Enterprises Ltd together held nearly 21 per cent of shareholding in Mindtree Ltd and that the deal for sale of shares was set to be finalised within that month.

As the tax revenue ramification in this case was worth crores and the assessee had not taken permission from the I-T authorities for selling these shares, they were attached as per the norm, it said.

Mindtree Ltd's 74,90,000 shares were attached and such an action is a normal requirement to protect the interests of revenue in big cases of tax evasion, the department said.

It said Siddhartha then filed a request to release these shares and offered other shares of Coffee Day Enterprises Ltd as security against the expected demand.

The department accepted this request and the attachment of Mindtree shares was revoked on February 13, it said.

However, a specific condition was put by the department that the sale proceeds will be utilised only for repayment of loans availed against the Mindtree Ltd shares by opening escrow account and the remaining balance will be provided for attachment to the department against the tax liability to arise.

"The alternate attachment of 46,01,869 unencumbered shares and 2,04,43,055 encumbered shares of Coffee Day Enterprises Ltd was made on February 13-14," the department said.

The CCD promoter is the son-in-law of former Karnataka chief minister and BJP leader S M Krishna and was last seen near a bridge on Netravati river in Kotepura area in Dakshina Kannada district on Monday night.

Authorities have launched a massive search for him.