The Finance Ministry has now issued a fresh notice in the NDTV Income Tax assessment case after the SC on Friday quashed the news channels reassesment for allegedly round-tripping hundreds of crores of rupees from foreign sources.
Earlier, "The Supreme Court has today ruled in favour of NDTV in a tax case which baselessly accused the company of money-laundering while raising funds abroad in 2007 for its non-news businesses," said NDTV issued a statement on its website.
The Revenue department on the contrary said that the SC has not given a clean chit to the news channel. It also said that the SC has upheld the governments view that undisclosed income amounting to Rs 405 crore had escaped assessment.
"SC has giving it liberty to assess the same by resorting to another provision relating to foreign assets where the limitation is extended to 16 years," as reported by Business Today. A source close to the case also accused UPA government of failing to act in the limitation of four years.
On Friday, in a major relief to New Delhi Television Ltd (NDTV), the Supreme Court on Friday allowed its appeal to quash the notice issued by the Income Tax Department seeking reassessment of income assessment for the financial year 2007-08 for allegedly round-tripping hundreds of crores of rupees from foreign sources.
A bench comprising Justices L. Nageswara Rao and Deepak Gupta said, "We accordingly allow the appeal by holding that the notice issued to the assessee (NDTV) shows sufficient reasons to believe on the part of the assessing officer to reopen the assessment but since the revenue has failed to show non-disclosure of facts, the notice having been issued after a period of four years is required to be quashed."
However, the apex court clarified that though it quashed the 2015 notice on technical ground, it left it open for the revenue department to issue a fresh notice under pertinent IT provisions.
"The revenue department may issue a fresh notice taking benefit of the second proviso if otherwise permissible under law," said the apex court.
The assessing officer had issued notices to NDTV under Section 148 of the Income Tax Act on the ground of escaping income from assessment.
The apex court said that these notices were time-barred, hence unsustainable. NDTV had urged that no income was derived from the foreign entity and a loan cannot be termed to be an asset or an income and had submitted that the notice cannot be said to have been issued under the second provison.
Citing the 2015 notice, the apex court said, "There is no case set up in relation to the second proviso either in the notice or even in the reasons supplied on August 4, 2015 with regard to the notice.
"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 November 23, 2015."
The top court examined whether the revenue department can take the benefit of the extended period of limitation of six years for initiating proceedings under the first proviso Section 147 of the Act.
"This can only be done if the revenue can show that the assessee had failed to disclose fully and truly all the material facts necessary for its assessment," the top court noted.
The court said that in its view, NDTV was not guilty of nondisclosure of material facts. "We are clearly of the view that the notice and reasons given thereafter do not conform to the principles of natural justice and the assessee did not get a proper and adequate opportunity to reply to the allegations which are now being relied upon by the revenue," the apex court said.
