Date:27/08/2005 URL: http://www.thehindubusinessline.com/2005/08/27/stories/2005082702920100.htm

Back Wife's engagement as special counsel — Chidambaram's resignation demanded; CBDT clarifies

Our Bureau

New Delhi , Aug. 26

THE Bharatiya Janata Partyhas demanded the resignation of the Finance Minister, Mr P. Chidambaram, in a sequel to the Central Board of Direct Taxes (CBDT) engaging his wife, Ms Nalini Chidambaram, as `special counsel' to represent the Income-Tax Department in a case before the Madras High Court.

"It is a serious issue. It is not only a case of impropriety but also corruption, favouritism and nepotism. I am surprised that the Prime Minister has not taken any action after the issue was raised by an AIADMK member in Rajya Sabha," Ms Sushma Swaraj, BJP spokesperson, told reporters here. She demanded Mr Chidambaram's resignation on the issue.

Earlier in the day, the CBDT clarified the circumstances under which the department had engaged Ms Nalini Chidambaram as a special counsel.

The CBDT's clarification came in the wake of charges levelled in the Rajya Sabha by the AIADMK Member, Mr N. Jyothi, that Mr Chidambaram had misused his official position to secure legal assignments for his wife as a counsel representing the Income-Tax Department.

CBDT clarifies: The CBDT clarified that its proposals for engagement of counsel are not submitted to the Finance Minister for approval. "In this case also, the file was not put up to the Finance Minister. Nor was the Finance Minister informed of the matter. In retrospect, not informing the Finance Minister was a lapse on the part of the board," the CBDT statement said.

Clarifying the position, the CBDT statement said that, in January 2004, Ms Pushya Sitaraman, Senior Standing Counsel for the Income-Tax Department, Chennai, had briefed Mr Chidambaram (then practising as a Senior Advocate) in a case involving large revenue (clubbed with a batch of cases raising the same issue). The CBDT statement also said the case was not taken up for hearing until May 2004, when Mr Chidambaram became the Finance Minster.

"In July 2004, due to the non-availability of Mr Chidambaram, Ms Pushya Sitaraman persuaded Ms Nalini Chidambaram, Senior Advocate, to take up the case, in view of her long experience and familiarity with the subject. A proposal to this effect, received from the Chief Commissioner of Income Tax (CCIT-I), Chennai, was approved by the CBDT as per the prescribed procedure," the CBDT said.

It also clarified that this is the sole occasion on which Ms Chidambaram was engaged as a special counsel of the Income Tax Department. Further, the CBDT said the "board regrets any embarrassment caused to the Finance Minister in this matter."

A senior Finance Ministry official told Business Line that there was no violation of any established procedures or rules. However, a section of the Left parties felt the Finance Minister owed an explanation to Parliament on the issue. "The whole episode is a murky one and the Finance Minister owes an explanation to Parliament and the people of India," said Mr D. Raja, National Secretary of the Communist Party of India.