The Supreme Court has asked the Commissioner Central Income Tax Circle to respond to a plea by online news portal NewsClick challenging tax notices issued against it.
A bench comprising of Justice BV Nagarathna and Justice Augustine George Masih have issued notice to IT department and asked for their response within next 14 days.
The counsel for NewsClick told the Apex Court that it has been left helpless as they are unable to pay salaries to its employees as a result of the tax demands and pre-deposits.
A bench of Justices BV Nagarathna and Augustine George Masih listed the matter next after two weeks.
On December 13, the Delhi High court said no to the demand by Newsclick for seeking a stay on the income tax demand for replying on allegedly receiving predetermined foreign remittances from the Justice and Education Fund (JEF).
The Income Tax department had requested the Court that the portal has a “lot to answer for” in terms of its financial dealings.
The court in its order mentioned that the portal, in its appeal pending before the Commissioner of IT (appeals), fails to make out a prima facie case in its favour.
The Court added that the assessing officer (AO) in his finding reported that the transaction between the petitioner and the foreign entity was a form of “reverse engineering”.
On December 30, 2022,The income tax department had issued an assessment order against NewsClick, stating that thefunds received from the foreign entities in the form of remittances towards services were a modus operandi to introduce unexplained funds into the portal, which, it alleged, was acting in the nature of an agent of Judicial Educational Fund (JEF).
On November 29, an order was passed by the Division Bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna that the NewsClick has a lot to answer when it comes to its financial dealings as highlighted in the order passed by the assessing officer.
The Bench held that there was no prima facie case in NewsClick’s favour.
The Court has said that keeping in view the aforesaid findings,the Court view that the petitioner has not been able to make out a prima facie case in its favour. To put it mildly, the petitioner has a ‘lot to answer’ in the appeal… Accordingly, the writ petition is dismissed,” the Court ordered.
However, the Bench clarified that these observations are only in context of the writ proceedings and will not prejudice the parties at the appellate proceedings.
NewsClick approached the High Court challenging the orders dated November 3, 2023 and February 20, 2023 passed by the Income Tax department.