MHC chief bench restrains Income Tax Department from passing any further orders pertaining to centralisation of the accounts of DMK Party and DMK Charitable Trust in connection with its investigation into Mr. Durai Murugan

MHC restrains Income Tax Department from passing any further orders pertaining to centralisation of the accounts of DMK Party and DMK Charitable Trust in connection with its investigation into Mr. Durai Murugan
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On 01.04.2019, a search and seizure was conducted in the premies belonging to Mr. Durai Murugan, General Secretary of the DMK party. While assessment proceedings was going on against Mr. Durai Murugan, in January 2021, the Income Tax Department wanted to centralise the assessment of the DMK Party and the DMK Charitable Trust and transfer the files of Mr. Durai Murugan, DMK and DMK Charitable Trust to one officer in the central circle. Challenging this centralisation order, the DMK and DMK Charitable Trust had filed writ petitions before the Hon’ble Madras High Court which came to be allowed by Hon’ble Justice C.S. Saravanan on 09.05.2025.

As against the said order, the Income Tax Department filed writ appeals which came up for hearing today before Hon’ble Chief Justice M.M. Shrivastava and Hon’ble Justice Arul Murugan. The Income Tax Department was represented by Additional Solicitor General Mr. ARL Sundaresan assisted by Mr. AP Srinivas, Standing Counsel who argued that the IT Department has the power to centralise cases in the interest of better coordination.

Per contra, Mr. P. Wilson, Senior Counsel assisted by Mr. Richardson Wilson, Advocate for the DMK party and DMK Charitable Trust contended that the procedure under section 127 of the IT Act was not followed for the centralisation which was passed in a hurried manner on the eve of the 2021 Assembly elections. He further contended that merely because the case of the secretary of an association is pending, the assessment of the association of persons can’t be centralised without reasons.

After hearing arguments on both sides, the Hon’ble Bench issued notice in the IT Deparments appeals and in the meanwhile restrained the IT department from finalising assessments / passing any orders in the cases pertaining to these assesses.