Delhi HC Upholds I-T Dept Reassessment, Attachment Notice To NDTV [Read Judgment]

In a major setback to NDTV, the Delhi High Court has upheld the Income Tax department’s notice proposing reassessment proceedings for period from 2008-09 and 2009-10, and provisional attachment of its assets saying there was reasonable apprehension that NDTV may liquidate its assets, thereby, thwarting the recovery of tax liability.“This court is of the view that a reasonable apprehension that NDTV may liquidate the assets thwarting the recovery of tax liability is not unwarranted,” said a bench of Justice S Ravindra Bhat and Justice Najmi Waziri.The court noted the AO’s (Assessing Officer) decision not to attach the bank accounts and other trade receivables of NDTV so as to ensure unhampered operation of its business.“This decision is in line with the judgment of the Bombay High Court in Gandhi Trading vs Assistant Commissioner of Income Tax and Others wherein the court held that the action taken under Section 281B must not hamper the business activities of the assesse and accordingly, attachment of bank accounts must be the last resort.“…this court is of the opinion that the impugned order under Section 281B does not suffer from any infirmities and is valid under the Act. The writ petition…has to therefore, fail. 58. In view of the foregoing analysis, both petitions have to be and are dismissed,” the bench said.The order of the court came on two petitions moved by NDTV against the decision of the I-T department for reassessment and attachment of its assets.The department had received complaints from NDTV’s shareholders.“This court is of opinion that the complex and circuitous structure of subsidiaries and the transactions entered therein are closely connected and provide a live link for the formation of the belief of the AO that there has been escapement of income in AY 2009-10 and for the previous assessment year, AY 2008-09 as well because the investments continued that year,” the bench said.The court further observed that, “it is clear from the above judicial pronouncements that the mere disclosure of a transaction at the time of the original assessment proceedings does not protect the assesse from a re-assessment under Section 147 if the AO has information that indicates that the transaction is sham or bogus”.“In the present case, NDTV has alleged that the details of the corporate guarantee issued by NDTV to NNPLC regarding the Step Up Coupon Bonds was intimated to the Revenue during the original assessment proceeding. This argument of NDTV falls flat in light of the judicial decisions mentioned above considering that the AO has reason to believe that this transaction is bogus. For these reasons, this court is of the view that the impugned reassessment notice is valid in law and can be sustained,” it said.Read the Judgment Here

Delhi HC Upholds I-T Dept Reassessment, Attachment Notice To NDTV [Read Judgment]

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