Thondamuthur AIADMK MLA and former minister SP Velumani. | Photo credit: PERIASAMY M
The Madras High Court on Tuesday (March 24, 2026) dismissed a plea filed by former AIADMK minister SP Velumani in 2023 challenging an assessment order issued against him by the Income Tax (IT) department in 2022 after it found that he had given ₹7 million in cash to SRS Mining for distribution in various assembly elections in Tamil Nadu206.
Justice C. Saravanan dismissed the plea, preferring a statutory appeal after AP Srinivas, standing counsel for the IT department, argued that the assessee should not have filed a suit against the order issued for the assessment year 2017-18 without availing the statutory remedy of approaching the first appellate authority under the Income Tax Act, 1961 Act.
Explaining the background of the case, the court’s standing counsel said that Mr. Velumani had filed an IT return on January 23, 2018, during his tenure as local administration minister in the AIADMK government, in which he had declared a total taxable income of just ₹4.92 crore, which included his salary of ₹4.448 crore, which is income from other sources. The returns were filed for the assessment year 2017-18.
However, a search and seizure operation conducted by IT sleuths at the premises related to businessman J. Sekar Reddy’s SRS Mining on 8 December 2016 led to the unearthing of incriminating materials which revealed that Mr. Velumani had given the private company ₹7 million in cash for distribution in constituencies where elections were held for all AIiance.MK partners.
Further, the IT sleuths recorded the affidavit of K. Srinivasal, who was then a director of JSR Infra Developers Private Limited, a related company, that the seized journal entries did relate to cash received by SRS Mining from Mr. Velumani for distribution to individual contestants and also for expenses in various constituencies where elections were held.
In response to a notice issued by the IT department seeking an explanation as to why ₹7 crore should not be added to his income for tax recovery along with penalties, Mr. Velumani feigned ignorance of any such money he had given to a private company and claimed that his income for 2017-18 was only ₹4.92 crore as his returns were declared in 2017.
However, after considering the seized materials and corroborating evidence, the Assessing Officer with ₹7 crore for unexplained expenses and pegged the total taxable income of Mr. Velumani at ₹7.04 crore for the assessment year 2017-18. He also decided to initiate criminal proceedings, which is why the former minister rushed to court with this proposal in 2023.
Published – 25 Mar 2026 0:34 IST
