Image Courtesy:ndtv.com
The rat chase behind NDTV continues as the Finance Ministry wasted no time in issuing fresh notice in the NDTV Income Tax reassessment case. This was done shortly after the Supreme Court quashed the last reassessment notice issued by Income Tax Department for the year 2007-08, while still allowing issue of notice under another provision of the Act.
The notice was quashed in the apex court by a bench comprising of Justices L Nageswara Rao and Deepak Gupta on the grounds that the IT department failed to show “non-disclosure of facts” in its notice issued 4 years after the assessment year and hence it was deemed time barred by the court. However, the court clarified that it is not adjudicating on whether the IT department could take benefit of section 147 of the Income Tax Act in this case. The court said, “…the revenue may issue fresh notice taking benefit of the second proviso if otherwise permissible under law”.
According to the second proviso, the time bar of 4 years is not applicable to cases where “any income in relation to any asset located outside India has escaped assessment for any assessment year”. The case was decided in favour of NDTV, which went into appeal at the apex court against the said notice, since the notice is silent on whether it is invoking the second proviso on section 147 of the IT Act. The Court pointed out, “It is only while rejecting the objections of the assessee that reference has been made to the second proviso in the order of disposal of objections dated 23.11.2015”. The bench held that the assesee “should not be prejudiced or be taken by surprise. The uncontroverted fact is that in the notice dated 31.03.2015 there is no mention of any foreign entity”.
The court also noted that since the assessee has not gotten adequate opportunity to reply to the allegations which are now being put forth by the IT Department, the notice is deemed to be against the principles of natural justice. LiveLaw reported that the IT Department took the stand that NDTV had suppressed in the incomes it had raised in 2007-08 through foreign subsidiaries in Netherlands and United Kingdom. According to the department, the transactions with the foreign subsidiaries were “sham transactions with a view to get the undisclosed income.”
A statement issued by NDTV on its website reads, “The Supreme Court has refused to allow the Revenue Department to reopen an assessment that was decided years ago. Tax officials had sought this in 2015 alleging that NDTV had concealed facts and round tripped money. The court today has disallowed that. The Supreme Court has proved that the rule of law prevails above all else.”
The Revenue Department has however countered this statement by saying that the apex court not given a clean chit to NDTV and has rather endorsed the government’s view that there are reasons to believe that undisclosed income worth Rs. 405.09 crore has escaped assessment, The Business Today reported.
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