Madras High Court to hear income tax appeals against DMK, its charitable trust on February 9

The Madras High Court is all set to hear on Monday (February 9, 2026) three writ appeals filed by Income Tax (I-T) department for transferring Dravida Munnetra Kazhagam (DMK) and DMK Charitable Trust’s income tax files to an official probing the seizure of ₹11.48 crore from a premises reportedly connected with the party’s general secretary and Water Resources Minister Duraimurugan in 2019.

The appeals have been listed before Chief Justice Manindra Mohan Shrivastava and Justice G. Arul Murugan. They had been preferred against Justice C. Saravanan’s May 9, 2025 order through which the single judge had quashed the transfer orders and remitted the matter to the Commissioner of Income Tax (Exemptions) for passing fresh orders after granting an opportunity of hearing to the party and the trust.

According to the I-T department, a search and seizure operation was carried out at various places connected with Mr. Duraimurugan and his son D.M. Kathir Anand, now a Member of Parliament representing Vellore constituency, on March 30, 2019 and April 1, 2019. The searches led to seizure of ₹11.48 crore in cash neatly packed in covers and pasted with printed labels containing names of Assembly segments and wards.

Since Mr. Duraimurugan was the general secretary of DMK and a permanent trustee of DMK Charitable Trust, the Assistant Commissioner of Income Tax, Central Circle-1(3), sent a proposal to the Director General of Income Tax (Investigations) on January 13, 2021 for transferring the income tax files, of the political party as well as the charitable trust, to him to so that a ‘coordinated investigation’ could be conducted.

The DGIT accepted the proposal and issued a direction to the Commissioner of Income Tax (Exemptions) to transfer the files. Accordingly, the Commissioner passed two individual orders on January 19, 2021 transferring the files of DMK and the trust from the Deputy Commissioner of Income Tax (Exemptions) and the Income Tax Officer (Exemptions) Ward-I respectively to the Assistant Commissioner of Income Tax, Central Circle-1(3).

Immediately, the party as well as the trust filed two individual writ petitions challenging the transfer orders issued by the Commissioner. After the court ordered notices to the I-T department in those two cases, the Assistant Commissioner issued notices to the charitable trust alone on February 26, 2021 and March 4, 2021 calling upon it to furnish certain details related to the assessment year 2018-19.

Therefore, the trust filed a third writ petition challenging the two assessment notices and impleaded the Assistant Commissioner Jayaraman Saravanan by name. It accused him of acting with a malicious intent “in order to please the political party in power at the Centre and to tarnish the image of DMK.” It contended that there was absolutely no need for a coordinated investigation.

The trust also highlighted the timing of the transfer and said, though the seizure was made in 2019, the transfer order was passed just before the Assembly elections in Tamil Nadu in 2021. Even when Justice Saravanan took up all three writ petitions together for final hearing in 2025, senior counsel P. Wilson had contended that “a similar situation prevails even now as the State was all set to face the next Assembly elections in 2026.”

On the other hand, the I-T department in its writ appeals, argued that the order passed by the single judge was in contravention of the settled principles of law and opposed to the facts of the case. It said, the judge had not given any valid reasons for quashing the transfer orders and had decided the three writ petitions “on mere conjectures and surmises rather than considering the facts of the case and applicable law.”

The department also contended the transfer of income tax files from one officer to another officer was an administrative act intended for centralised assessment and that when such transfer had happened between two officers, both stationed in Chennai city, there was no necessity to give an opportunity of hearing to the assessees since they would not be in any way prejudiced by such transfer.

The department also took “strong” exception to the impleadment of its officer by name in one of the three writ petitions and said, “the officials are doing their ardent duty and carrying out various functions under the Income Tax Act. There cannot be personal allegations against any of the officials. The allegations have been made without any substance and they are not necessary for the purpose of the deciding the issue.”