Madras High Court to hear former T.N. Minister Ponmudy’s petition against I-T assessment order after two weeks

The Madras High Court on Wednesday decided to hear after a fortnight a writ petition filed by former DMK Minister K. Ponmudy, who had challenged an assessment order passed by the Income Tax (I-T) department in December 2022, after coming to a conclusion that an illegal payment of ₹20 lakh had been made to him by SRS Mining owned by J. Sekar Reddy and two other partners.

Justice C. Saravanan directed the High Court Registry to print the name of I-T department senior standing counsel A.P. Srinivas in the causelist and list the case after two weeks. The former Minister had filed the writ petition in January 2023 challenging the assessment order passed by an Assistant Commissioner of Income Tax and a consequent notice of demand issued on December 22, 2022.

On January 30, 2023, Justice Abdul Quddhose had passed an interim order restraining the I-T department from taking coercive steps against the former Minister until further orders from the court and granted time for the department to file its counter affidavit. The interim relief was granted after being prima facie convinced with the submissions made by senior counsel P. Wilson representing the writ petitioner.

The senior counsel had told the court that the I-T department had issued multiple show cause notices before passing the assessment order. While responding to those notices, the petitioner had requested the department to share with him the evidence to prove that he had received an illegal payment of ₹20 lakh from SRS Mining. However, the department was unable to share any evidence, he claimed.

Mr. Wilson had also drawn the attention of the court to the fact that though the petitioner had requested the I-T department to permit him to cross examine the partners of SRS Mining, which had allegedly made the illegal payment to him, the department had refused to accede to his request. The denial of opportunity to cross examine the company representatives was arbitrary and illegal, he had argued.

The court was also told that the demand made in the show cause notices was only for a sum of ₹20 lakh but in the final assessment order, the tax liability, along with interest, had been arbitrarily increased to ₹78.33 lakh. Therefore, the petitioner urged the court to quash the assessment order as well as the consequent notice of demand issued to him by the Assistant Commissioner of Income Tax.