In a major relief to NDTV, the Supreme Court today rejected the plea of the income tax department to permit them to proceed with the re-assessment notices against the channel in connection with the money laundering case.
The Apex Court allowed the appeal filed by the New Delhi Television Limited, an Indian company engaged in running television channels of various kinds, by holding that the notice issued to the assessee was time-barred as it was issued 4 years later though the notice disclosed all the reasons.
The assessee has various foreign subsidiaries mainly the subsidiary based in the United Kingdom (UK) named NDTV Network Plc., the U.K. The assessee submitted a return for the financial year 2007-08 i.e. assessment year 2008-09 declaring a loss. Under Section 148 of the Income Tax Act, 1961, the assessment officer issued the notice to NDTV on the ground of the escapement of income from assessment and proposing a substantial addition of Rs. 642 crores to its amount. The assessee appealed to quash the reassessment notice.
The division bench consisting of Justice L Nageshwara Rao and Justice Deepak Gupta ordered to quash the income tax reassessment notices issued by the Income Tax Department. The bench held that the notice issued to the assessee was time-barred as it was issued 4 years later though the notice disclosed all the reasons. It was also observed that the notices served to the assessee do not comply with the principles of natural justice since the department did not give a proper and adequate opportunity to reply to the allegations mentioned therein.
“The notice issued to the assessee and the supporting reasons did not invoke provisions of the second proviso of section 147 of the Act,” the bench said.
The court while clarifying said that it has not expressed any opinion on whether on facts of this case the revenue could take benefit of the 2nd proviso of Section 147 of the Income Tax Act, 1961.To Read the full text of the Judgment CLICK HERE