I-T Dept seek ITAT Bench as Finmin wants Harshad Mehta Cases Settled

In what could bring an end to a long and complex feud spanning three decades and crisscrossing multiple financial markets and institutions, tax authorities have been asked by the finance ministry to complete pending disputes with the late Harshad Mehta, the stockbrokers who earned the ‘Big Bull’ sobriquet in the early 1990s before rattling the market he once ruled. The process, preparations for witch have begun, would finally decide the fate of thousands of crores of tax demand in limbo for years. It would also shrink the office of the Custodian, set up under a special Act of parliament to impound assets of parliament to impound assets of those accused in the 1992 securities scam .Prodded by the financial ministry, The Income Tax (I-T) Department has written to quasi-judicial body Income Tax Appellate Tribunal (ITAT), requesting them to have a dedicated bench that would expedite hearing on case against Mehta. “Request for early hearing and disposal have been made in the past, but now with the ministry demanding a quick disposal, a new request has been recently to the tribunal,” a senior official requesting anonymity told.

One of the main tax disputes expected to go before the tribunal relates to assessment year 1993-94 (that is, financial year 1992-93), involving a demand of over ₹7,374 crore – a predominant part of which is interest charged under various sections of the I_T Act. In early 2019, the tribunal scrapped more than ₹2000 crore of additions made by the tax office on the Mehta family partaking to AY 1992-093 (that is, FY 1991-92). Total income for the Ay 1993-94 was ₹2,016.04 crore, comprising capital gains, dividend and interest income, share trading profit, money and share market oversold positions, unexplained credit in bank account, et al. This reassessment order issued in 2016 for Ay 1993-94 has been challenged before the Commissioner of I-T Appeals, the first appellate authority,, by Jyoti Mehta, wife and legal heir of Harshad Mehta. “There have been appeals, cross appeals. It’s been festering for years. Can it go on and on? It’s high time to recover, refund and end the matter,” said another senior income tax official. In the summer of 1992 – the financial year for which the huge tax department – the Mehta were hounded by government agencies. Weeks after the scam broke on April 23, 1992, the CBI froze bank accounts of Mehta in mid-May. Around the same time, Their membership from the stock exchanges was cancelled. In early June later, the Custodian took charge. According to market circles, the Mehta are expecting substantial refunds from the department and are also looking forward to a closure of the tortuous disputes. Besides the tax feuds, multiple appeals filed by Mehta family members against freezing of assets, are pending before the Supreme Court S-ET

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