SEBI ex-chief Bhave gets tax notice; CBDT calls it ‘routine’

Weeks after he stepped down as chairman of the Securities & Exchange Board of India, C B Bhave has been issued a notice by the income-tax department to provide details of his tax returns for the 2009-10 assessment year.

Some observers saw sinister motives in the notice, coming as it does when Bhave has just retired as SEBI chief and is in the thick of allegations relating to the IPO scam of 2005-2006. But the I-T department was quick to clarify that it was a matter of routine, as Bhave's name was randomly picked by its computer.

At the same time, the tax authorities have also launched an enquiry into complaints against two current SEBI board members. But this probe is not related to the notice sent to Bhave.

The department said the notice to Bhave was not intended to harass or victimise him, nor was it acting upon any complaint against him. ''The tax proceedings in case of Bhave are routine and have no connection with any complaint or his tenure as SEBI chairman,'' the Central Board of Direct Taxes said in a statement.

About the enquiry on two existing members, it said necessary action was being taken according the law on the basis of a complaint received against them.

Bhave was appointed SEBI chairman in February 2008 for three years. There were widespread expectations that he would be given an extension, but in January, the government announced the appointment of U K Sinha as the new SEBI chairman.