Ruling in favour of NDTV, the Supreme Court on Friday rejected the Revenue Department plea to reopen an income assessment for the financial year 2007-08 in which the company was accused on money laundering.
The assessing officer had issued notices to NDTV on “the ground of escapement of income from assessment”. The apex court held that the notices were time barred and thereby unsustainable. The Bench of comprising of Justices L Nageshwar Rao and Deepak Gupta said that, “the notices and the reason given thereafter do not conform to the principles of natural justice”
The Income Tax Department held that the income raised by the company in the year 2007-08 was suppressed through foreign subsidiaries in Netherland and United Kingdom. The IT Department emphasised that the UK based subsidiary had issued convertible bonds to the tune of 100 million dollars which would not have been possible until it was guaranteed by NDTV, stating that these transactions were sham transactions. The Supreme Court in its judgment also noted that the Income Tax Department had not raised the issue of non disclosure of facts by NDTV before the High Court.
After the final assessment order regarding the returns of NDTV for the year 2007-08 was passed in the year 2012, in 2015 the revenue department sent the first notice to re-open the assessment but this notice did not give any reasons. When the assessee asked for reasons then they were supplied separately and on a later date. NDTV challenged the notice in Delhi High Court but the High Court order came in favour of the Income Tax Department. NDTV then challenged the Delhi High Court order in the Supreme Court.
-India Legal Bureau