Sasikala’s counsel submitted that the amount claimed by the IT department was less than Rs 1 crore, the limit set by the Central Board of Direct Taxes for appeal on tax disputes in High Courts vide its August 8, 2019 circular, and hence she was entitled for relief.

The matter related to the assessment of the income of Sasikala, close aide of late Tamil Nadu Chief Minister J Jayalalithaa, for 1994-95. Originally it was assessed for Rs 28.86 lakh. But later in March, 2002 the Commissioner of Income Tax passed a reassessment order based on a report of the Directorate of Vigilance and Anti-Corruption in which it was alleged there was concealment of information by Sasikala regarding purchase of some immovable properties including 80 acres of land.

This was challenged by Sasikala before the ITAT which held that no additions can be made to assessment based on the DVAC report as the anti-corruption agency had only registered a complaint and the matter has not attained any finality. The I-T department moved the high court against the ITAT order.

On Wednesday, the department submitted that the Rs 1 crore limit would not apply to this case as the prosecution against Sasikala was pending before the Economic Offences Court.