Supreme Court orders stay on Income Tax recovery from NewsClick till ITAT order
The Supreme Court on Friday ordered the Income Tax department not to recover the outstanding amount from NewsClick, till disposal of the news portal’s appeal filed before the Income Tax Appellate Tribunal (ITAT).
The Division Bench of Justice BV Nagarathna and Justice Nongmeikapam Kotiswar Singh passed the order on the grounds that approximately 30 percent of the income tax amount has been recovered from the new portal.
NewsClick had moved the Apex Court challenging a Delhi High Court order, which refused to stay further recovery of the remaining outstanding amount.
The instant Special Leave Petition (SLP) filed by the news portal claimed that the respondent-tax authorities, vide orders passed in February and November 2023, arbitrarily rejected its application for a stay of demand during the pendency of its appeal before the Commissioner of Income-Tax (Appeals) against the Assessment Order dated December 30, 2022.
These orders further directed NewsClick to pay 20 percent of the demand before applying afresh for a stay of demand during the pendency of its appeal before the Commissioner of Income Tax (Appeals).
The news portal approached the Income Tax Appellate Tribunal, which upheld the findings of the AO and refused to stay the income tax demand.
NewsClick then moved the Delhi High Court. However, the High Court rejected the writ petition on the grouds that it did not find any reason to interfere with the Appellate Tribunal’s order.
The petitioner then approached the Apex Court.
During the previous hearings, Senior Advocate Kapil Sibal questioned the reasoning given by the High Court in the impugned order and averred that the organisation was left with no money.
He said for one year, the news portal was not able to pay salaries and provident funds to its employees.
Senior Advocate Devadatt Kamat today submitted that the entire money in the bank has been taken out and a recovery of around 30 percent has been made.
The Division Bench disposed off the plea while modifying the High Court order in the aforesaid terms. It directed the ITAT to consider the appeal in accordance with law on its merits without being influenced by the observations of the High Court, which have been modified by the Apex Court.
Earlier on July 8, the Court had issued notice on the instant SLP.
The Delhi High Court had observed in its order that Newsclick’s plea of financial stringency based on its balance sheet inspired no confidence. It said as per the assessing officer, the news portal’s accounts were not properly maintained.
An SLP was filed against this order also. However, the same was withdrawn with the liberty to move the Income Tax Appellate Tribunal.