Controversy Surrounding Prime Minister’s Daughter Sparks Questions about Income Tax Provisional Settlement Board
The Prime Minister has raised concerns about the constitution of the Income Tax Provisional Settlement Board amidst a controversy involving his daughter, Veena, and Exalogic Solutions. In his response to the Assembly, the Prime Minister criticized the board for issuing an order without considering the other side’s perspective. He also emphasized that neither Exalogic Company nor its director is involved in the settlement with Cochin Minerals and Rutile Limited (CMRL) and the Department of Income Tax.
The Prime Minister pointed out that the Settlement Board, which operates under the Central Government, consists of three officers. He highlighted the fact that quasi-judicial institutions, both under the Central and State Governments, are staffed by individuals who receive salaries from the government. While it is yet to be determined by the courts, concerns have been raised over whether Settlement Boards only hear the parties in violation of natural justice.
The affidavit stating that no Exalogic services were provided was later voluntarily withdrawn. The Prime Minister claimed that the Settlement Board accepted the Income Tax Department’s argument that this withdrawal lacked substance. However, it is worth noting that the Income Tax Department clarified the criteria for accepting the withdrawal of the affidavit, citing a judgment from the Kerala High Court. The Board upheld that withdrawal cannot be accepted without presenting facts contradicting the original statement.
CMRL has also stated that both Exalogic and Veena did not fulfill their contractual obligations regarding service provision. When Veena attempted to retract her statement, she failed to provide evidence of having received services in accordance with the contracts. The Board’s order clearly indicates that further action was taken based on statements made by the Managing Director of CMRL, including the assertion that services were not received. Notably, the Prime Minister’s response omitted any mention of the amount raised by his daughter as an IT and marketing consultant or any contracts she had, apart from the one with Exalogic and CMRL.
After determining that the services were not received, the Board ruled that the Rs 1.72 crore paid to Veena and Exalogic could not be considered as CMRL’s business expenses. The Income Tax Department supported this argument, stating that it should be categorized as an illegal payment to politicians. CMRL’s Managing Director provided an explanation as to why illegal payments to politicians were included in the order.
The Chief Minister highlighted that the Kerala State Industrial Development Corporation (KSIDC), which holds a 13.41% stake in CMRL, is not involved in policy matters. The shares of KSIDC were purchased using public funds. CMRL has admitted to having undisclosed funds amounting to Rs 134 crore, with a significant portion of it being disbursed to politicians and others. According to the Income Tax Department, if this money had been available, CMRL would not have incurred a loss. The question remains whether KSIDC was aware of this situation. The General Manager of KSIDC, R. Prashant, informed the media that CMRL was asked to clarify the charges two weeks after the settlement board’s order was released.
NEW DELHI ∙ The Prime Minister’s answer in the Assembly is to question the constitution of the Income Tax Provisional Settlement Board in the controversy surrounding his daughter Veena and Exalogic Solutions. The Prime Minister himself, who said the order without hearing the other side, has also said that ‘Exalogic Company or its director is not a party to the settlement’ with Cochin Minerals and Rutile Limited (CMRL) and the Department Income Tax.
The Prime Minister says that there are 3 officers under the Central Government in the Settlement Board. The quasi-judicial institutions under the Central and State Governments are staffed by people who draw salaries from the Government. The courts have not yet ruled that the practice of Settlement Boards is to hear only the parties who violate natural justice.
Those who drew up the affidavit that they had not provided any Exalogic services later ‘voluntarily’ withdrew it. The Prime Minister claimed that the Settlement Board had accepted the Income Tax Department’s contention that this withdrawal was not sustainable without analysis. However, citing the Kerala High Court judgment, the Income Tax Department had clarified the issues to be followed in order to accept the withdrawal of the affidavit. The Board upheld the claim that withdrawal is not acceptable without presenting facts that contradict the original statement.
Several sides of CMRL have equally stated that Exalogic and Veena were not providing services as per the contracts signed with them. When he wanted to withdraw his statement, he could not provide evidence of receiving services in accordance with the contracts. It is clear in the order that further action was taken based on the statements given by the CMRL Managing Director including that the services were not received. The Prime Minister’s reply did not mention the amount raised by his daughter as an IT and marketing consultant or the contract she had, except the contract with Exalogic and CMRL.
The board ruled that the Rs 1.72 crore paid to Veena and Exalogic could not be treated as business expenses of CMRL after finding that the services were not received. This step was accepted by the Income Tax Department’s assertion that this should also be included in the category of illegal payments to politicians. CMRL MD’s explanation as to why illegal payments to politicians etc are also part of the order.
The Chief Minister says that KSIDC, which has a 13.41% stake in CMRL, has no stake in policy matters. KSIDC shares were purchased using public funds. CMRL has admitted that Rs 134 crore was undisclosed; A good portion of it was also given to politicians and others. The Income Tax Department has assessed that CMRL would not have suffered a loss if this money had been available. The question remains whether this situation is known to KSIDC. KSIDC General Manager R. Prashant had told the media that CMRL was asked to clarify the charges two weeks after the settlement board’s order came out.
English Summary : The Prime Minister questioned the structure of the Income Tax Board itself
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