Jayalalithaa withdraws plea on I-T case from SC

Former Tamil Nadu Chief Minister J Jayalalithaa withdrew her petition from the Supreme Court relating to her controversial disclosure of an income of Rs 1.72 crore, for the assessment year 1998-99 under a special scheme. The AIADMK Chief had challenged the Madras High Court judgement setting aside an order by the Income Tax Settlement Commission (ITSC) accepting her disclosure application. A Bench headed by Justice S H Kapadia allowed the plea of senior advocate Arun Jaitley, who was appearing for Jayalalithaa to withdraw the petition and restored the statutory appeal filed by her before the Commissioner of Income Tax (Appeals)-II, Chennai. The Bench made it clear that it has not expressed any opinion on the merits of the appeal and "in that connection contentions on both sides are expressly kept open". It said "the CIT (Appeals) will decide the appeal on its own merits uninfluenced by the contents of the applications dates 31st May, 2004 read with the application of 19th January, 2005 and the statement made by Jayalalithaa on 2nd February, 2005 before the Settlement Commission under section 245 (c) of Income Tax Act". While allowing a petition filed by the Income Tax Department against the order of the ITSC, the High Court had held that the inclusion of the amount in the I-T returns was not a "disclosure" by Jayalalithaa but a discovery by the assessment officer. The High Court was of the view that AIADMK chief was not entitled to take advantage of section 245 (C) as the amount of Rs 1.72 crore had already been discovered by the assessing authority and added to the income of the assessee. It had directed the ITSC to reject her application.

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