New Delhi: The Income Tax Department has issued a show-cause notice to Telugu Desam Party (TDP) chief and former Andhra Pradesh chief minister Chandrababu Naidu, asking why tax proceedings should not be initiated against him for having “undisclosed income “ of Rs 118 crore received as kickbacks from some infrastructure companies.
The notice was issued in response to Naidu’s preliminary objections that the tax proceedings against him could not have been initiated before the jurisdictional assessing officer undertook the exercise of reassessment of his income for the impugned financial years, the Hindustan Times reported.
“Once the case is notified to this office (Central Circle), immediately to commence the proceedings, notice under section 153C was validly issued and the proceedings are in progress,” stated the show-cause notice, adding the department has evidence to show that unaccounted income generated through bogus sub-contracts was given to Naidu, the report said.
Section 153C of the I-T Act allows the revenue department to proceed against a party other than the person who has been searched, if certain incriminating materials are found against that party.
The investigations against Naidu began after searches were carried out on the premise of one Manoj Vasudev Pardasany (referred to as MVP in the notice) who was taking part in the tendering process in the state since December 2017 on behalf of Shapoorji Pallonji & Co. Pvt Ltd (SPCL), and at the premises of Pardasany’s associates in November 2019.
In his statements, Pardasany admitted to having arranged bogus contacts and work orders for siphoning off of funds by SPCL to generate cash through fake sub-contractor companies, the notice added.
“Several incriminating messages, chats and excel sheets have also been recovered from MVP and his associates during search operations which show siphoning off of funds and cash generation by several major infrastructure companies. Delivery of such cash to you (Naidu) has also been unearthed during the course of search,” it said.
According to the notice, MVP contacted Naidu’s personal secretary P Srinivas in August, 2016 (when Naidu was CM), who asked him to arrange for funds for the party.
“From the statements of MVP recorded on November 1, 2019 and November 5, 2019, it has been found that funds were siphoned off from projects allocated to SP by the Andhra Pradesh Government without doing any actual work…Apart from Shapoorji Pallonji (SP), funds were also siphoned off from L&T and delivered for use by you through companies such as Phoenix Infra & Pour Trading,” the notice to Naidu stated.
The I-T Department totalled the money MVP allegedly siphoned off from various sub-contractor companies to pay Naidu and said, “Please state as to why an amount of ₹118,98,13,2071- for AY 2020-21 should not be treated as your undisclosed income.”
The notice has come in the midst of speculations of a possible alliance between TDP and the Bharatiya Janata Party (BJP), the Hindustan Times reported.