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Budget session in mind, Centre puts off action on UP CM
January, 11th 2011

With the BJP on a warpath and the Budget session drawing close, the Congress is desperate to garner as much support as possible. Hence, the ruling party has decided against persisting with the taxation matters of Uttar Pradesh Chief Minister Mayawati.

The decision not to file an appeal in the Delhi High Court against the orders of the Income-Tax Appellate Tribunal (ITAT) dismissing appeals filed by the Income-Tax department to re-examine the tax liability of Mayawati for five years was taken on the recommendation of a law officer that there wasnt sufficient ground for appeals. However, another law officer is learnt to have told the government that there was enough material to appeal.

The period of limitation, within which the government would have had to move the Delhi High Court in at least two of the five cases, ends on Tuesday. Sources said if the UPA government had decided to move the HC it would effectively had meant pleading for re-opening of the assessment for all five years. They said the decision not to do anything at this juncture was taken at the highest level. The government, especially some Congress leaders, were of the view that the move could also ignite another round of war of words between the UPA government and the UP Chief Minister, who has already accused the Centre of unleashing its agencies to target her and her partys government.

Incidentally, one of the grounds cited by the tribunal while setting aside the fresh assessment order against the CM by the tax authorities was that notices had not been served on her.

All cases pertain to large number of cash gifts received by Mayawati, allegedly from her supporters.

A senior functionary of the Ministry of Finance, which is the administrative ministry for the Department of Income-Tax, had opposed any move to file an appeal in the High Court to challenge the ITAT orders.

The sources told The Indian Express that the Chief Commissioner of Income-Tax (Central), Delhi, had told the Finance Ministry that since there was no substantial question of law involved in the matter, no worthwhile purpose would be achieved by moving the High Court. However, the Law Ministry had been told by one of its law officers that there are certain important questions of law left unanswered by the ITAT Bench and an appeal should be preferred against the same. He was also of the view that Mayawati, who is also facing a disproportionate assets case by the CBI, would use the ITAT decisions to strengthen her defence against the CBI. The ITAT had also upheld the orders passed by the Commissioner Appeals (CIT-A) for the assessment years that included 2001-2002 and 2002- 2003. Among other things, the I-T department was not ready to accept Mayawatis declaration in her annual tax returns that she had received gifts from the late Kanshi Rams sisters.

The contentious matter also saw flip-flop by the UPA government, which removed assessing officer Suresh Sivanandan, who had passed one of the orders against Mayawati, after the BSP extended support to the UPA government against the Oppositions cut motions in the Budget. The assessing officer had also pointed to the fact that there was no relationship between Mayawati and the alleged donors and hence the genuineness of the gifts could not be proved.

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